Q2 2024 Repligen Corp Earnings Call

Good day, ladies and gentlemen, and welcome to Repligen Corporation's second quarter of 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, then zero on your telephone keypad.

Operator: Second Quarter of 2024 Earnings Conference. All participants will be in listen-only mode.

Operator: Corporation, Second Quarter of 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, then zero on your telephone keypad. Please note that there will be a question-and-answer session following the company's formal remarks. In order to accommodate all individuals who wish to ask questions, there will be a limit of two questions at a time. Please note this event is being recorded.

Please note that there will be a question and answer session following the company's formal remarks.

Sondra S. Newman: In order to accommodate all individuals who wish to ask questions, there will be a limit of two questions at a time. Please note this event is being recorded. I would like now to turn the call over to your host, Sondra Newman, Head of Investor Relations for Repligen. Please go ahead.

Operator: I would like now to turn the call over to your host.

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

Sondra Newman: Thank you and welcome to our second quarter of 2024 report. On this call, we will cover business highlights and financial performance for the three and six month periods ending June 30th, 2024, and we will provide financial guidance for the year 2024. Joining us on the call today, our rep.

Sondra S. Newman: Puneet Souda, Conference Specialist. Please note that there will be a limit of two questions at a time. Please note, this event is being held. I would like now to turn the call over to Sondra Newman, Head of Investor Relations. Thank you, and welcome to our second quarter of 2024 report. On this call, we will cover business highlights and financial performance for the three and six month periods ending June 30, 2024, and we will provide financial guidance for the year 2024. Joining us on the call today are Repligen's current Chief Executive Officer, Tony Hunt, our Chief Commercial Officer, Olivier Loeillot, and our Chief Financial Officer, Jason Garland.

Speaker Change: Thank you and welcome to our second quarter of 2024 report. On this call we will cover business highlights and financial performance for the three and six month period ending June 30, 2024, and we will provide financial guidance for the year 2024.

Sondra Newman: Current Chief Executive Officer, Tony Hunt; our Chief Commercial Officer, Olivier Loeillot; and our Chief Financial Officer, Jason Garland. As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning risks related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K, and other current reports on Form 8-K, including the report that we are filing today, and other filings that we make with the Securities and Exchange Commission.

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

Unknown Executive: As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning risks related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K, and other current reports on Form 8-K, including the report that we are filing today and other filings that we make with the Securities and Exchange Commission. Today's comments reflect management's current views, which could change as a result of new information, future events, or otherwise. The company does not obligate or commit itself to update forward-looking statements, except as required by law.

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

Speaker Change: Additional information concerning risks related to our business is included in our quarterly reports on Form 10-Q , our annual report on Form 10-K , and other current reports on 8-K, including the report that we are filing today and other filings that we make with the Securities and Exchange Commission.

Sondra Newman: Today's comments reflect management's current views, which could change as a result of new information, future events, or otherwise. The company does not obligate or commit itself to update forward-looking statements, except as required by law. During this call, we are providing non-GAAP financial results and guidance, and, unless otherwise noted. Reconciliation of gaps to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Rep. website and on SEC.gov. Adjusted non-GAAP figures in today's report include the following. Base revenue and organic revenue, non-COVID and non-protein revenue, cost of sales, gross profit, and gross margin, operating expenses, including R&D and SG&A, income from operations and operating margin, other income, pre-tax income, tax provision, effective tax rate, net income, diluted earnings per share, as well as EBITDA, adjusted EBITDA, and adjusted EBITDA margins.

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

Sondra S. Newman: During this call, we are providing non-GAAP financial results and guidance unless otherwise noted. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Repligen's website and on sec.gov. Adjusted non-GAAP figures in today's report include the following, base revenue and organic revenue, non-COVID and non-proteins revenue, cost of sales, gross profit and gross margin, operating expenses, including R&D and FG&A, income from operations and operating margin, other income, pre-tax income, tax provision, effective tax rate, net income, diluted earnings per share, as well as EBITDA, adjusted EBITDA, and adjusted EBITDA margins.

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

Speaker Change: Adjusted non-GAP figures in today's report include the following.

Speaker Change: Base Revenue and Organic Revenue, Non-COVID and Non-Proteins Revenue.

Speaker Change: Cost of Sales, Gross Profit and Gross Margin

Speaker Change: Operating Expenses, including R&D and SG&A, Income from Operations and Operating Margin, Other Income, Pre-Tax Income.

Speaker Change: Tax Provision, Effective Tax Rate, Net Income, Diluted Earnings Per Share, as well as EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margins.

Sondra Newman: These adjusted financial measures should not be viewed as an alternative to GAT measures, but are intended to best reflect the performance of our ongoing operations.

Sondra S. Newman: These adjusted financial measures should not be viewed as an alternative to GAAP measures but are intended to best reflect the performance of our ongoing operation. Now, I'll turn the call over to Tony Hunt. Thank you, Sondra.

Speaker Change: These adjusted financial measures should not be viewed as an alternative to GAAP measures , but are intended to best reflect the performance of our ongoing operation. Now I'll turn the call over to Tony Hunt.

Tony Hunt: Now we'll turn the call over to Tony Hunt. Thank you, Sandra, and good morning, everyone, and welcome to our Q2 earnings call. As you saw on our press release this morning, we reported on an improving quarter for both revenues and orders, with orders pacing 2% above revenues for the second quarter. And 1% above revenues for the first half of the year. As outlined on our mayor earnings call, we were looking for continued momentum in Q2, and with the exception of seeing China demand decline further, and the known headwinds in proteins and COVID, we had a really good quarter.

Anthony J. Hunt: And good morning, everyone, and welcome to our Q2 earnings call. As you saw in our press release this morning, we reported on an improving quarter for both revenues and orders, with orders pacing 2% above revenues for the second quarter and 1% above revenues for the first half of the year. As outlined in our May earnings call, we were looking for continued momentum in Q2, and with the exception of seeing Chinese demand decline further and the known headwinds in proteins and COVID, we had a really good quarter.

Anthony J. Hunt: Thank you, Sondra, and good morning, everyone, and welcome to our Q2 earnings call. As you saw in our press release this morning, we reported on an improving quarter for both revenues and orders, with orders pacing 2% above revenues for the second quarter and 1% above revenues for the first half of the year.

Speaker Change: As outlined in our May earnings call, we were looking for continued momentum in Q2, and with the exception of seeing China demand decline further, and the known headwinds in proteins and COVID, we had a really good quarter.

Tony Hunt: We saw a positive Q2 in your-to-date sales and order performance in Pharma, and a healthy pickup in CDMO order activity. Sales and order momentum on consumables continued, and we saw a bounce back in equipment orders, both sequentially and year over year. And finally, our momentum in the new modality space continued, with first-half revenues and orders well above the same period in 2023.

Anthony J. Hunt: We saw a positive Q2 in year-to-date sales and order performance in pharma and a healthy pickup in CDMO order activity. The sales and order momentum on consumables continued, and we saw a bounce back in equipment orders, both sequentially and year-over-year.

Speaker Change: We saw a positive Q2 in year-to-date sales and order performance in pharma, and a healthy pickup in CDMO order activity.

Speaker Change: Sales and order momentum on consumables continued, and we saw a bounce back in equipment orders, both sequentially and year-over-year. And finally, our momentum in the new modality space continued, with first-top revenues and orders well above the same period in 2023.

Anthony J. Hunt: And finally, our momentum in the new modality space continued with first top revenues and orders well above the same period in 2023. We are narrowing revenue guidance within our range with the expectation that we will finish 2024 between $620 to $635 million, which lowers our midpoint by 1%. This is directly related to the demand drop off in China, where we saw a weak Q2, which is driving an additional $10 million decline versus our May call. We're also seeing increased headwinds coming from ATLAC.

Tony Hunt: We are narrowing revenue guidance within our range, with the expectation that we will finish 2024 between 620 to 635 million, which lowers our midpoint by 1%. This is directly related to the demand drop-off in China, where we saw a weak Q2, which is driving an additional 10 million decline versus our May call. We're also seeing increased headwinds coming from ethics, but overall, we're really happy with the progress we're seeing, including the strategic direction being reinforced for proteins with ending acquisition of 10-T Lab that we announced yesterday.

Speaker Change: We are narrowing revenue guidance within our range, with the expectation that we will finish 2024 between $620 to $635 million, which lowers our midpoint by 1%.

Speaker Change: This is directly related to the demand drop-off in China, where we saw a weak Q2, which is driving an additional $10 million decline versus our May call.

Anthony J. Hunt: But overall, we're really happy with the progress we're seeing, including the strategic direction being reinforced for proteins with the pending acquisition of TantiLab that we announced yesterday. So moving now to the big picture for the quarter and the first half of 2024, Farmer revenues in Q2 were up about 15% sequentially and 20% year-on-year.

Speaker Change: We're also seeing increased headwinds coming from Atlax.

Speaker Change: But overall, we're really happy with the progress we're seeing, including the strategic direction being reinforced for proteins with pending acquisition of TantiLab that we announced yesterday.

Tony Hunt: So moving now to the big picture on the quarter on the first half of 2024. Pharma revenues in Q2 were up about 15% sequentially and 20% year on year. Pharma orders were also strong, up 5% sequentially and 40% year on year. For CDMOs, while Q2 sales were down as anticipated, orders, as noted, came in strong, up by 20% plus both sequentially and year over year. Book to bill for CDMO was over 1.4% for the quarter and 1.1% for the first half of the year. This improvement was driven by an uptick in Tier 2 CDMO activity, which we view as an important turn for emerging biotech and the overall biologics market.

Speaker Change: So moving now to the big picture on the quarter on the first half of 2024.

Speaker Change: Farmer revenues in Q2 were up about 15% sequentially and 20% year-on-year.

Anthony J. Hunt: Former orders were also strong, up 5% sequentially and 40% year over year. For CDMOs, while Q2 sales were down as anticipated, orders, as noted earlier, came in strong, up by 20% plus, both sequentially and year over year. Book to bill for CDMOs was over 1.4 for the quarter and 1.1 for the first half of the year.

Speaker Change: Former orders were also strong, up 5% sequentially and 40% year-on-year.

Speaker Change: For CDMOs, while Q2 sales were down as anticipated, orders, as noted earlier, came in strong, up by 20% plus, both sequentially and year over year.

Speaker Change: Book to bill for CDMO was over $1.4 for the quarter and $1.1 for the first half of the year.

Anthony J. Hunt: This improvement was driven by an uptick in Tier 2 CDMO activity, which we view as an important turning point for emerging biotech and the overall biologics market. We look forward to seeing how this plays out later in the year and into 2025. Consumables maintained their momentum in Q2, with revenues of double digits versus Q1, orders in Q2 were up 30% versus the prior year and in line with our Q1 orders. With consumable orders up 20% in the first half of the year, we are confident that de-stocking is finally behind us. Moving to capital equipment

Speaker Change: This improvement was driven by an uptick in Tier 2 CDMO activity, which we view as an important turn for emerging biotech and the overall biologics market.

Tony Hunt: We look forward to seeing how this plays out later in the year and into 2025. Consumables maintain their momentum in Q2 with revenues of double digit versus Q1. Orders in Q2 were up 30% versus prior year and in line with our Q1 orders. With consumable orders of 20% in the first half of the year, we are confident that destocking is finally behind us. Moving to capital equipment, similar to CDMOs, equipment was light on revenue in the quarter. We did, however, see first half of equipment sales up close to 10% first of the first half of 2023.

Speaker Change: We look forward to seeing how this plays out later in the year and into 2025.

Speaker Change: Consumables maintained their momentum in Q2 with revenues up double digit versus Q1. Orders in Q2 were up 30% versus prior year and in line with our Q1 orders.

Speaker Change: With consumable orders up 20% in the first half of the year, we are confident that de-stocking is finally behind us.

Anthony J. Hunt: Similar to CDMOs, equipment was light on revenue in the quarter. However, we did, however, see first half equipment sales up close to 10% versus the first half of 2023. More importantly, equipment orders showed a very nice rebound, up 20% versus the last quarter and about 15% year-to-date on relatively easy costs. Supporting our order strength in H1 is the early success of our RS Systems product line, where we have seen important wins at strategic accounts in Q2, including first placements of our most recently launched RS 10 system.

Speaker Change: Moving to capital equipment. Similar to CDMOs, equipment was light on revenue in the quarter. We did, however, see first half equipment sales up close to 10% versus the first half of 2023.

Tony Hunt: More importantly, equipment orders showed a very nice rebound, up 20% versus last quarter and about 15% year-to-date on relatively easy comps. Supporting our orders strength in H1 is the early success of our RS systems product line, where we have seen important wins at strategic counseling Q2, including first placements of our most recently launched RS10 system. While the Q2 results are encouraging, there are still headlines in this part of the market. However, we still expect capital equipment orders to pick up further in the second half, but we have a very strong opportunity panel that we expect to convert to orders.

Speaker Change: More importantly, equipment orders showed a very nice rebound, up 20% versus the last quarter and about 15% year-to-date on relatively easy cops.

Speaker Change: Supporting our order strength in H1 is the early success of our RS Systems product line, where we have seen important wins at strategic accounts in Q2, including first placements of our most recently launched RS 10 system.

Anthony J. Hunt: While the Q2 results are encouraging, there are still headwinds in this part of the market. However, we still expect capital equipment orders to pick up further in the second half, as we have a very strong opportunity funnel that we expect to convert to orders. The new Modality customer base delivered mid-single-digit revenue growth in Q2 versus the same quarter in 2023. New modality orders were up more than 40% year-over-year, delivering a Q2 Book-to-Bill of 1.1.

Speaker Change: While the Q2 results are encouraging, there are still headwinds in this part of the market. However, we still expect capital equipment orders to pick up further in the second half as we have a very strong opportunity funnel that we expect to convert to orders.

Tony Hunt: The new modality customer base delivered mid-single digits revenue growth in Q2 versus the same quarter in 2023. New modality orders were up more than 40% year-over-year, delivering a Q2 book-to-bill of 1.1. First half of the year revenues were greater than 10%, and more importantly, orders were upgraded than 20% in the same period. This reflects the momentum we are seeing in this market and the strong portfolio fit for this customer base. Our regions continue to perform well, with the exception of China. China orders and sales were down again in Q2, and our expectation is that China revenues will now come in around 25 million in 2024, are about 10 million lower than we were anticipating at the time of our Q1 call.

Speaker Change: The new modality customer base delivered mid-single-digit revenue growth in Q2 versus the same quarter in 2023. New modality orders were up more than 40% year-over-year, delivering a Q2 book-to-bill of 1.1.

Anthony J. Hunt: First quarter revenues were up greater than 10%, and more importantly, orders were up greater than 20% in the same period. This reflects the momentum we are seeing in this market and the strong portfolio fit for this customer base. Our regions continue to perform well, with the exception of China.

Speaker Change: First half of the year revenues were up greater than 10% and more importantly orders were up greater than 20% in the same period. This reflects the momentum we are seeing in this market and the strong portfolio fit for this customer base.

Speaker Change: Our regions continue to perform well, with the exception of China.

Anthony J. Hunt: China orders and sales were down again in Q2, and our expectation is that China revenues will now come in around $25 million in 2024, or about $10 million lower than we were anticipating at the time of our Q1 call. Jason will cover more in his finance section on regional dynamics. So in summary, total Q2 revenues decreased 3% year-over-year, but we're up 4% if you exclude non-COVID and protein types. Sequentially, total Q2 revenues were up 2%.

Speaker Change: China orders and sales were down again in Q2, and our expectation is that China revenues will now come in around $25 million in 2024, or about $10 million lower than we were anticipating at the time of our Q1 call.

Tony Hunt: Jason will cover more in his finance section on regional dynamics.

Speaker Change: Jason will cover more in his finance section on regional dynamics.

Tony Hunt: So, in summary, total Q2 revenues decreased 3% year of a year, but were up 4% if you exclude non-COVID and proteins headwinds. Sequentially, total Q2 revenues were up 2%. We continue to see some lumpiness on a franchise level from course to quarter, but sales to the first half of 2024 support our view that our franchises are recovering. Further validating this view is orders performance in the quarter and first half. Total orders in Q2 were up 20% year of a year, and up 30% we exclude proteins. Sequentially, orders were up 5%.

Jason K. Garland: So in summary, total Q2 revenues decreased 3% year-over-year, but were up 4% if you exclude non-COVID and proteins headwinds.

Jason K. Garland: Sequentially, total Q2 revenues were up 2%.

Anthony J. Hunt: We continue to see some lumpiness on a franchise level from quarter to quarter. Sales through the first half of 2024 support our view that our franchises are recovering. Further validating this view is orders performance in the quarter and first half. Total orders in Q2 were up 20% year-over-year and up 30% if we exclude pro-2. Subsequently, orders were up 5%.

Jason K. Garland: We continue to see some lumpiness on a franchise level from quarter to quarter, but sales through the first half of 2024 support our view that our franchises are recovering.

Jason K. Garland: Further validating this view is ORDR's performance in the quarter and first half.

Jason K. Garland: Total orders in Q2 were up 20% year-over-year and up 30% if we exclude proteins. Sequentially, orders were up 5%.

Tony Hunt: Moving to our updated revenue guidance for 2024. As noted earlier, we are narrowing our guidance to a range of 620 to 635 million, reflecting the incremental headwinds from China and foreign exchange. We are encouraged that our businesses are performing and expected, and we achieved our revenue targets in the first half of the year. Order's health study supporting a first half book to build a 1.01 and higher and important market areas like CDMOs and humidities. Our opportunity funnel continues to strengthen as we move to the first half of the year. The funnel is up significantly versus the same period in 2023.

Anthony J. Hunt: Moving to our updated revenue guidance for 2024, as noted earlier, we are narrowing our guidance to a range of $620 to $635 million, reflecting the incremental headwinds from China and foreign exchange. We are encouraged that our businesses are performing as expected, and we achieved our revenue targets in the first half of the year. Orders Health Study, supporting a first-half book-to-bill of $1.01 and higher in important market areas like CDMOs and new modalities.

Jason K. Garland: Moving to our updated Revenue Guidance for 2024.

Jason K. Garland: As noted earlier, we are narrowing our guidance to a range of $620 to $635 million, reflecting the incremental headwinds from China and foreign exchange.

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

Speaker Change: orders health study supporting a first-half book to bill of 1.01 and higher in important market areas like CDMOs and new modalities

Anthony J. Hunt: Our opportunity funnel continues to strengthen as we move to the first half of the year. The funnel is up significantly versus the same period in 2023. Our healthy funnel was reflected in our orders performance for the quarter, and it's another way to support our view that the markets are more fully recovering as we move into the second half of 2024. With the positive uptick in orders and funneled strength, along with improving visibility, we expect the second half of the year revenue to be stronger versus the first half.

Speaker Change: Our opportunity funnel continues to strengthen as we move through the first half of the year.

Speaker Change: The funnel is up significantly versus the same period in 2023.

Tony Hunt: Our healthy funnel was reflected in our orders performance for the quarter and is another lens to support our view that the markets are more fully recovering as we move into the second half of 2024. With the positive uptick in orders and funneled strength, along with improving visibility, we expect the second half of the year revenue to be stronger versus first half. We also expect to see a return to robust revenue growth in the second half of the year, with non-COVID revenues projected to be up 11% versus same period in 2023. We expect Q4 to be an especially strong revenue quarter given the funnel and the known seasonality challenges associated with Q3.

Speaker Change: Our healthy funnel was reflected in our orders performance for the quarter and is another lens to support our view that the markets are more fully recovering as we move into the second half of 2024.

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

Anthony J. Hunt: We also expect to see a return to robust revenue growth in the second half of the year, with non-COVID revenues projected to be up 11% versus the same period in 2023. We expect Q4 to be an especially strong revenue quarter given the funnel and the known seasonality challenges associated with Q3. Based on these market trends and our healthy funnel, we believe we are finally seeing a turnaround in the markets, and we are excited about the momentum going into 2025, where we expect to continue to grow above market. I'll now hand the call over to Olivier to talk about franchise performance and the commercial efforts to develop a key account program. Thank you, Tony.

Speaker Change: We also expect to see a return to robust revenue growth in the second half of the year, with non-COVID revenues projected to be up 11% versus the same period in 2023.

Speaker Change: We expect Q4 to be an especially strong revenue quarter given the funnel and the known seasonality challenges associated with Q3.

Tony Hunt: Based on these market trends and our healthy funnel, we believe we are finally seeing the turnaround in the markets, and we are excited about the momentum going into 2025, where we expect to continue to grow above market.

Speaker Change: Based on these market trends and our healthy funnel, we believe we are finally seeing the turnaround in the markets and we are excited about the momentum going into 2025 where we expect to continue to grow above market.

Olivier Loeillot: I'll now hand the call over to Olivier to talk about franchise performance and the commercial efforts to develop the key account program. Thank you, Tony. Let me provide some quarterly highlights for each of our franchises. Starting with proteins, where the known headwinds of 32 million have not changed over the last six months, we are still expecting this franchise to deliver 67 to 72 million in revenue this year. While 2024 will be a down year for proteins, we are very optimistic about the solid rebound in 2025 based on the new protein array we launched with pure light in the map space and the impact of the tonki technology in new So, pending acquisition of Tanty is a strategically important technology play for the company.

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

Olivier Loeillot: Let me provide some quarterly highlights for each of our franchises. Starting with proteins, where the known headwinds of $32 million have not changed over the last six months, we are still expecting this franchise to deliver $67 to $72 million in revenues this year. While 2024 will be a down year for proteins, we are very optimistic about a solid rebound in 2025 based on the new protein A resin we launched with PureLight in the map space and the impact of the Tanti technology in new modality markets. The pending acquisition of Tanti is a strategically important technology play for the company. It allows us to combine Tonti's microporous bead technology with the affinity content from Avitide and our pre-packed Opus column.

Olivier Loeillot: Thank you, Tony.

Olivier: Let me provide some quarterly highlights for each of our franchises.

Olivier: Starting with proteins, where the known headwinds of $32 million have not changed over the last 6 months, we are still expecting this franchise to deliver $67 to $72 million in revenue this year.

Olivier: While 2024 will be a down year for proteins, we are very optimistic about a solid rebound in 2025 based on the new protein A resin we launched with PureLight in the map space and the impact of the Tanti technology in new modality markets.

Olivier: The pending acquisition of Tanti is a strategically important technology play for the company. It allows us to combine Tanti's microporous bead technology with the affinity content from Avitide and our pre-packed opus columns.

Olivier Loeillot: It allows us to combine Tanty's microporous speed technology with the affinity content from Avitide and our prepack Opus columns. Because we've already been working with Tanty's scientists for a couple of years, we expect to be able to launch our first resin under Tanty's Duo co-brand as soon as qualified. So, exciting times for this franchise as we build out a best-in-class affinity-reading portfolio to disrupt and take share in both map markets with pure light and new modality markets with Tanty. Our filtration franchise continues to perform well with revenues of mid-singer digits in Q2 and excluding COVID at almost 10% year to date.

Olivier Loeillot: Because we've already been working with Tonti's Scientist for a couple of years, we expect to be able to launch our first resin under Tonti's Duolocore brand as soon as Q4. So, exciting times for this franchise as we build out a best-in-class affinity rating portfolio to disrupt and take share in both MAP markets with PureLight and new modality markets with Tantive. Our filtration franchise continues to perform well, with revenues at mid-single digits in Q2 and, excluding COVID, at almost 10% year-to-date.

Speaker Change: Because we've already been working with Tonti's scientists for a couple of years, we expect to be able to launch our first resins under Tonti's Duolocore brand as soon as Q4.

Speaker Change: So, exciting times for this franchise, as we built out a best-in-class affinity rating portfolio to disrupt and take share in both MAP markets with PureLight and new modality markets with Tanti.

Speaker Change: Our filtration franchise continues to perform well, with revenues at mid-single digits in Q2 and excluding COVID at almost 10% year-to-date.

Olivier Loeillot: Total orders have also been robust, greater than 20% year to date. Strengths in the business is coming from ATS, Tanty's flagship cassettes and systems. Total ATS systems revenues were greater than 50% in the quarter and 40% for the first half of 2024. In Q2, we saw accelerating demand for Tanty's X, which was 30% year over year. The flagship cassette uptick is another sign that this talking is behind us as we have a broad customer base spanning CDMO and pharma. Finally, accessing systems at another strong quarter, where we continue to differentiate ourselves on systems with integration of CTEX flow analytics technology.

Olivier Loeillot: Total orders have also been robust, greater than 20% year to date. Strength in the business is coming from ATS, Tangenix, Flat Sheet Cassettes, and Systems. Total ETF system revenues were up greater than 50% in the quarter and 40% for the first half of 2024. In Q2, we saw accelerating demand for Tangenix, which was up 30% year over year. The flat sheet catheter peak is another sign that this talking is behind us as we have a broad customer base spanning CDMO and pharma. Finally, Artisans Systems had another strong quarter where we continue to differentiate ourselves on systems with the integration of CTEX flow analytics technology. Moving on,

Speaker Change: Total orders have also been robust, greater than 20% year-to-date.

Speaker Change: Strength in the business is coming from ATS, Tangenix, flat sheet cassettes, and systems.

Speaker Change: Total ETF system revenues were up greater than 50% in the quarter and 40% for the first half of 2024.

Speaker Change: In Q2, we saw accelerating demand for Tangenix, which was up 30% year-over-year. The flat-sheet catheter peak is another sign that this stocking is behind us, as we have a broad customer base spanning CDMO and pharma.

Speaker Change: Finally, Artisan Systems has another strong quarter where we continue to differentiate ourselves on systems with integration of CTEX Flow Analytics technology.

Olivier Loeillot: Moving to chromatography, while our total Chrome revenues were slightly down year on year, we saw sequential growth of about 10%. And the most significant piece of the franchise, our Opus portfolio, showed positive signs of recovery with revenues of high single digits in the quarter and mid-single digits for the first half of the year. Otherwise, we saw a significant increase in chromatography demand, greater than 50% in the quarter, nearly 20% sequentially, and a 15% year to date. For Opus, orders in the quarter and first half of the year have been robust, greater than 20% through the first six months of 2024, driven by strength in new modalities.

Olivier Loeillot: While our total Chrome revenues were slightly down year on year, we saw sequential growth of about 10%. And the most significant piece of the franchise, our Opus portfolio, showed positive signs of recovery with revenues up high single digits in the quarter and mid-single digits for the first half of the year. Otherwise, we saw a significant increase in chromatography demand, up greater than 50% in the quarter, nearly 20% sequentially, and up 15% year-to-date.

Speaker Change: Moving to chromatography.

Speaker Change: While our total Chrome revenues were slightly down year on year, we saw sequential growth of about 10%.

Speaker Change: And the most significant piece of the franchise, our Opus portfolio, showed positive signs of recovery with revenues up high single digits in the quarter and mid-single digits for the first half of the year.

Speaker Change: Otherwise, we saw a significant increase in chromatography demand, up greater than 50% in the quarter, nearly 20% sequentially, and up 15% year to date.

Olivier Loeillot: For Opus, orders in the quarter and first half of the year have been robust, up greater than 20% through the first six months of 2024, driven by strength in new modalities. On top of this, our Chrome systems had a strong quarter in terms of orders as we continue to see traction for our artisan product line in the field. Our analytics business had a nice pickup in revenues versus Q1 and was up mid-single digits year over year.

Speaker Change: For Opus, orders in the quarter and first half of the year have been robust, up greater than 20% through the first six months of 2024, driven by strength in new modalities.

Olivier Loeillot: On top of this, our Chrome systems had a strong quarter on orders as we continue to see traction for our arties in product line in the field. Our analytics business had a nice pickup in revenues versus Q1 and was a mid-singer digit year over year. We continued to focus our efforts on new modality adoption and promoting the flow technology as part of our Arties in system product offering.

Speaker Change: On top of this, our Chrome systems had a strong quarter on orders as we continue to see traction for our artisan product line in the field.

Speaker Change: Our analytics business had a nice pickup in revenues versus Q1 and was up mid-single digit year-over-year.

Olivier Loeillot: We continue to focus our efforts on new modality adoption and promoting the flow technology as part of our artisan system product offering. Finally, a big area of focus for me over the last nine months has been building out our tier count strategy for the company. I am delighted that our Peer Account Management team now covers 20 of our top accounts.

Speaker Change: We continue to focus our efforts on new modality adoption and promoting the flow technology as part of our artisan system product offering.

Olivier Loeillot: Finally, a bigger real focus for me over the last nine months was building out our key account strategy for the company. I am delighted that our key account management team now covers 20 of our top accounts. We are very happy about the impact it has already had in 2024 and believe it will be key to our growth in 2025 and beyond. We had numerous meetings with Thomas, the sweet team, to present our most recent innovations and broad product portfolio. The feedback is very positive, especially on the depth and breadth of what we now bring to the table.

Speaker Change: Finally, a big area of focus for me over the last nine months was building out our tier count strategy for the company.

Speaker Change: I am delighted that our Key Account Management team now covers 20 of our top accounts.

Olivier Loeillot: We are very happy about the impact it has already had in 2024 and believe it will be key to our growth in 2025 and beyond. We had numerous meetings with Pharma's C-suite team to present our most recent innovations and broad product portfolio. The feedback is very positive, especially on the depth and breadth of what we now bring to the table. The key for me as I move into the CEO role is to maintain the focus on innovation and the impact of disruptive technologies in our markets and make sure that we have increased visibility at a senior level across our customer base.

Speaker Change: We are very happy about the impact it has already had in 2024 and believe it will be key to our growth in 2025 and beyond.

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

Olivier Loeillot: A key for me as I move into the CEO role is to maintain the focus on innovation and impact of disruptive technologies in our markets and make sure that we have increased visibility at a senior level across our customer base. We expect this in combination with our final of opportunities that are moving from early to late stage clinical and commercial will be the catalyst for sustained long-term growth consistently above the market growth rate.

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

Olivier Loeillot: We expect this, in combination with our funnel of opportunities that are moving from early to late stage clinical and commercial, will be the catalyst for sustaining long-term growth consistently above the market growth rate. Now, I will turn it back to Tony to wrap up the business section.

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

Tony Hunt: Now, I will turn it back to Tony to wrap up the business section. Yeah, thanks, Olivier. So, in summary, we've completed a solid first half to 2024, with revenues right in line with our expectations and orders tracking ahead of revenues by one percent. We are encouraged by the continued strength we're seeing in pharma, consumables, and my capital equipment in Q2. There's still a lot of work to be done. We're excited about moving back into growth mode in the second half with projected non-COVID growth of 11 percent at midpoint to our guidance. We remain confident about 2025 as many of the one-time headlines facing refuge in here in 2024 will be behind us.

Speaker Change: Now, I will turn it back to Tony to wrap up the business section.

Anthony J. Hunt: So in summary, we've completed a solid first half to 2024 with revenues right in line with our expectations and orders tracking ahead of revenues by 1%. We are encouraged by the continued strength we're seeing in pharma, consumables, and new modalities, and by the positive uptick we saw in CDMOs and capital equipment in Q2. There's still a lot of work to be done, but we're excited about moving back into growth mode in the second half with projected non-COVID growth of 11% at the midpoint of our guidance.

Anthony J. Hunt: Thanks Olivier. So in summary, we've completed a solid first half to 2024 with revenues right in line with our expectations and orders tracking ahead of revenues by 1%.

Anthony J. Hunt: We are encouraged by the continued strength we're seeing in pharma, consumables, and new modalities, and by the positive uptick we saw in CDMOs and capital equipment in Q2.

Anthony J. Hunt: There's still a lot of work to be done, but we're excited about moving back into growth mode in the second half, with projected non-COVID growth of 11% at midpoint of our guidance.

Anthony J. Hunt: We remain confident about 2025, as many of the one-time headwinds facing Repligen here in 2024 will be behind us. On a personal note, I would like to thank our employees, customers, and investors for giving me such support over the last 10 years. It's been a brilliant experience.

Replicant: We remain confident about 2025 as many of the one-time headwinds facing Repligen here in 2024 will be behind us.

Tony Hunt: On a personal note, I would like to thank our employees, customers, and investors for giving these such supports over the last 10 years. It's been a brilliant experience.

Replicant: On a personal note, I would like to thank our employees, customers, and investors for giving me such support over the last 10 years. It's been a brilliant experience. When I look to the future, I'm very confident about the success of Repligen, and the company is in very capable hands with Olivier at the helm.

Tony Hunt: When I look to the future, I'm very confident about the success of Reppelogen, and the company is in very capable hands with Olivier at the helm.

Jason K. Garland: When I look to the future, I'm very confident about the success of Repligen, and the company is in very capable hands with Olivier at the helm. Now I'll hand it over to Jason for the financial update. Thank you, Tony. Good morning, everyone.

Jason Garland: Now, I'll hand it over to Jason for the financial update. Thanks, Tony. Good morning, everyone. Today, we reported our financial results for the second quarter of 2024 and updated our financial guidance for 2024. Revenue in the second quarter was approximately $3 million sequentially from the first quarter, as we delivered revenue of $154 million. This is a reported decline of 3 percent year over year, or down 5 percent on an organic basis. Recent acquisitions contribute 3 percent of our reported growth. In currency and COVID, created about the 2 percent headwind. Excluding proteins with the known headwind of approximately $8 million per quarter, our other franchises grew 3 percent.

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

Jason K. Garland: Today we reported our financial results for the second quarter of 2024 and updated our financial guidance for 2024. Revenue in the second quarter was up approximately $3 million sequentially from the first quarter, as we delivered revenue of $154 million. This is a reported decline of 3% year over year, or down 5% on an organic basis. Recent acquisitions contribute 3% of our reported growth in currency, and COVID created about a 2% headwind. Excluding proteins, with a known headwind of approximately $8 million per quarter, our other franchises grew 3%.

Jason K. Garland: Thank you, Tony, and good morning, everyone. Today, we reported our financial results for the second quarter of 2024 and updated our financial guidance for 2024.

Jason K. Garland: Revenue in the second quarter was up approximately $3 million sequentially from the first quarter as we delivered revenue of $154 million. This is a reported decline of 3% year-over-year, or down 5% on an organic basis.

Jason K. Garland: Recent acquisitions contribute 3% of our reported growth, and currency and COVID created about a 2% headwind. Excluding proteins, with a known headwind of approximately $8 million per quarter, our other franchises grew 3%.

Jason Garland: For the first half of 2024, we reported $305 million revenue in line with our expectations. First half revenues decreased 11 percent year over year, but we're up 5 percent if you exclude known COVID and protein headwind. Olivier shared color on our franchise performance.

Jason K. Garland: For the first half of 2024, we reported $305 million in revenue, in line with our expectations. First half revenues decreased 11% year over year, but we're up 5% if you exclude known COVID and protein headwinds. As Olivier shared color on our franchise performance, I'll provide more detail on the performance across our global region. In the second quarter of 2024, North America represented approximately 50% of our global business. While Europe represented 36%, Asia Pacific, and the rest of the world represented 14%.

Jason K. Garland: For the first half of 2024, we reported $305 million of revenue in line with our expectations. First half revenues decreased 11% year-over-year, but we're up 5% if you exclude known COVID and protein headwinds.

Jason Garland: I'll provide more detail in the performance across our global regions. In the second quarter of 2024, North America represented approximately 50 percent of our global business. While Europe represented 36 percent, an Asia-Pacific and the rest of the world represented 14 percent. Within Asia, China was down 38 percent versus the second quarter of 2023 and represented 4 percent of our total business in the quarter. North America grew year over year on strength across all franchises except protein, and Europe was down 3 percent, driven entirely by the decline in affinity ligand. All regions are up high single digits to low double digits on orders in the first half of 2024, with the exception of China.

Jason K. Garland: As Olivier shared color on our franchise performance, I'll provide more detail on the performance across our global regions.

Speaker Change: In the second quarter of 2024, North America represented approximately 50% of our global business.

Speaker Change: While Europe represented 36 percent.

Speaker Change: In Asia-Pacific and the rest of the world, represented 14%. Within Asia, China was down 38% versus the second quarter of 2023, and represented 4% of our total business in the quarter.

Jason K. Garland: Within Asia, China was down 38% versus the second quarter of 2023 and represented 4% of our total business in the quarter. North America grew year over year on strength across all franchises except protein, and Europe was down 3%, driven entirely by the decline in affinity ligands. All regions are up high single-digit to low double-digit on orders in the first half of 2024, with the exception of China. China was down more than 20% in the first half of the year and almost 30% when you compare the first half of 2024 to the second half of 2023. We have seen no signs of recovery and do not expect to see a turnaround in 2024.

Speaker Change: North America grew year-over-year on strength across all franchises except protein and Europe was down 3% driven entirely by the decline in affinity ligands.

Speaker Change: All regions are up high single-digit to low double-digit on orders in the first half of 2024, with the exception of China.

Jason Garland: China was down more than 20 percent in the first half of the year and almost 30 percent when you compare our first half of 2024 to the second half of 2023. We have seen no signs of recovery and do not expect to see a turnaround in 2024. Based on our first half performance, we now expect China to be approximately 4% of our worldwide sale versus our previous range of 5 to 6%, which essentially drives $10 million of our drop in revenue guidance. Second quarter, 2024, adjusted gross profit with $76 million, a $4 million decrease in year-over-year on $5 million of lower revenue.

Speaker Change: China was down more than 20% in the first half of the year and almost 30% when you compare our first half of 2024 to the second half of 2023. We have seen no signs of recovery and do not expect to see a turnaround in 2024.

Jason K. Garland: Based on our first half performance, we now expect China to be approximately 4% of our worldwide sales versus our previous range of 5 to 6%, which essentially drives $10 million of our drop in revenue guidance. Second quarter 2024 adjusted gross profit was $76 million, a $4 million decrease year over year on $5 million of lower revenue. With this, we delivered a 49.6 adjusted gross margin. This is down 60 basis points versus last year, driven by volume and incentive compensation headwinds, mostly offset by year-over-year productivity.

Speaker Change: Based on our first half performance, we now expect China to be approximately 4% of our worldwide sales versus our previous range of 5 to 6%, which essentially drives $10 million of our drop in revenue guidance.

Speaker Change: Second quarter 2024 adjusted gross profit was $76 million, a $4 million decrease in year over year on $5 million of lower revenue. With this, we delivered a 49.6% adjusted gross margin.

Jason Garland: With this, we delivered a $49.6 adjusted gross margin. This is down 60 basis points versus last year, driven by volume and incentive compensation headwind, mostly offset by year-over-year productivity. That said, it was sequentially of 100 basis points from the first quarter. First half of 2024, adjusted gross margin was 49.1% and remained consistent with achieving our 2024 total year guidance of 49 to 50%. Continuing through the P&L, our adjusted income from operations was $16 million in the second quarter, down approximately $14 million compared to prior year. The majority of this decline was driven by $9 million of incremental incentive compensation, and the remaining from volume and inflation, partially offset by some price improvement and productivity savings.

Speaker Change: This is down 60 basis points versus last year, driven by volume and incentive compensation headwinds, mostly offset by year-over-year productivity. That said, it was sequentially up 100 basis points from the first quarter.

Jason K. Garland: That said, it was sequentially up 100 basis points from the first quarter. First half of 2024 adjusted gross margin was 49.1% and remained consistent with achieving our 2024 total year guidance of 49 to 50%. Continuing through the P&L, our adjusted income from operations was $16 million in the second quarter, down approximately $14 million compared to the prior year.

Speaker Change: First half of 2024 adjusted gross margin was 49.1% and remained consistent with achieving our 2024 total year guidance of 49 to 50%.

Speaker Change: Continuing through the P&L, our adjusted income from operations was $16 million in the second quarter, down approximately $14 million compared to prior year. The majority of this decline was driven by $9 million of incremental incentive compensation.

Jason K. Garland: The majority of this decline was driven by $9 million of incremental incentive compensation, and the remaining from volume and inflation, partially offset by some price improvement and productivity savings. Sequentially, our adjusted operating expenses were down $1 million from the first quarter. So we are executing an estimated 7% further reduction of adjusted operating expenses in the second half versus the first half run rate. While this is a meaningful reduction, we have also increased our investment in the commercial team to add more critical key account resources.

Speaker Change: And the remaining from volume and inflation, partially offset by some price improvement and productivity saving.

Jason Garland: Sequentially, our adjusted operating expenses were down $1 million from the first quarter, so we were executing an estimated 7% further reduction of adjusted operating expenses in the second half versus the first half run rate. While this is a meaningful reduction, we have also increased our investments in the commercial teams to add more critical key account resources. We're also seeing that the impact of some of our cost reduction initiatives will move to later in the year. Therefore, we are updating our full year guidance to reflect an additional $3 million of adjusted operating expenses. Our second quarter of 2024 adjusted operating income margin improves sequentially by approximately 200 basis points to 10%.

Speaker Change: Sequentially, our adjusted operating expenses were down $1 million from the first quarter. We are executing an estimated 7% further reduction of adjusted operating expenses in the second half versus the first half run rate.

Speaker Change: While this is a meaningful reduction, we have also increased our investment in the commercial team to add more critical key account resources.

Speaker Change: We're also seeing that the impact of some of our cost reduction initiatives will move to later in the year. Therefore, we are updating our full year guidance to reflect an additional $3 million of adjusted operating expenses.

Jason K. Garland: We're also seeing that the impact of some of our cost-reduction initiatives will move to later in the year. Therefore, we are updating our full-year guidance to reflect an additional $3 million of adjusted operating expenses. Our second quarter 2024 Adjusted Operating Income Margin improved sequentially by approximately 200 basis points to 10%. On a year-over-year basis, Adjusted Operating Income margins are down roughly 8 percentage points, driven by the increase in incentive compensation noted earlier and lower volume, with some offset from year-over-year cost reduction initiatives.

Speaker Change: Our second quarter 2024 Adjusted Operating Income Margin improved sequentially by approximately 200 basis points to 10%.

Jason Garland: On a year-over-year basis, adjusted operating income margins are down roughly 8 percentage points, driven by the increase in incentive compensation noted earlier and lower volume, with some offset from year-over-year cost reduction initiatives. Our second quarter of 2024 adjusted even a margin rate was approximately 15%, which reflects the 5 percentage point drive from depreciation. With cost optimization and margin expansion remaining a priority, we expect to continue to execute programs and evaluate the need for future optimization and restructuring actions. That said, we incurred less than $1 million of restructuring charges in the second quarter. Adjusted net income for the quarter was $19 million, down $11 million versus last year.

Speaker Change: On a year-over-year basis, adjusted operating income margins are down roughly 8 percentage points driven by the increase in incentive compensation noted earlier and lower volume, with some offset from year-over-year cost reduction initiatives.

Jason K. Garland: Our second quarter 2024 Adjusted Evenum Margin rate was approximately 15%, which reflects a 5 percentage point drag from depreciation. With cost optimization and margin expansion remaining a priority, we expect to continue to execute programs and evaluate the need for future optimization and restructuring actions. That said, we incurred less than $1 million of restructuring charges in the second quarter. Adjusted net income for the quarter was $19 million, down $11 million versus last year.

Speaker Change: Our second quarter of 2024 adjusted EBITDA margin rate was approximately 15%, which reflects a 5 percentage point drag from depreciation.

Speaker Change: With cost optimization and margin expansion remaining a priority, we expect to continue to execute programs and evaluate the need for future optimization and restructuring actions.

Speaker Change: That said, we incurred less than $1 million of restructuring charges in the second quarter.

Speaker Change: Adjusted net income for the quarter was $19 million, down $11 million versus last year.

Jason K. Garland: This was driven by a $14 million drop in adjusted operating income offset by greater than $1 million of higher interest income net of interest expense from improved interest rates on our cash positions, and it includes approximately $1 million less adjusted tax provision. Our second quarter Adjusted Effective Tax Rate was 18.1%, which includes a discrete benefit from stock-based compensation. Given the first half run rate, we are updating our total year Adjusted Effective Tax Rate Outlook and expect it to be approximately 20% down from the prior guidance of 21%.

Jason Garland: This was driven by the $14 million drop in adjusted operating income, offset by greater than $1 million of higher interest income net of interest expense from improved interest rates on our cash position. And it includes approximately $1 million less adjusted tax revision. Our second quarter adjusted affected tax rate was 18.1%, which includes a discrete benefit from stock-based compensation. Given the first half run rate, we are updating our total year adjusted affected tax rate outlook and expected to be approximately 20% down from the prior guys of 21%. In addition, we believe that the continued strength of our cash balance and interest rates will allow us to increase our adjusted other income outlook by approximately $6 million.

Speaker Change: This was driven by the $14 million drop in adjusted operating income offset by greater than $1 million of higher interest income, net of interest expense, from improved interest rates on our cash position.

Speaker Change: And it includes approximately $1 million less adjusted tax provision.

Speaker Change: Our second quarter adjusted effective tax rate was 18.1%, which includes a discrete benefit from stock-based compensation.

Speaker Change: Given the first half run rate, we are updating our total year adjusted effective tax rate outlook and expect it to be approximately 20% down from the prior guidance of 21%.

Jason K. Garland: In addition, we believe that the continued strength of our cash balance and interest rates will allow us to increase our adjusted other income outlook by approximately $6 million. Adjusted fully diluted earnings per share for the second quarter was $0.33 compared to $0.53 in the same period in 2023.

Speaker Change: In addition, we believe that the continued strength of our cash balance and interest rates will allow us to increase our adjusted other income outlook by approximately $6 million.

Jason Garland: Adjusted fully diluted earnings per share for the second quarter was 33 cents compared to 53 cents in the same period in 2023. Finally, with a strong generation of cash flow from operations in the quarter, we increased our cash position to $809 million, up $29 million from the first quarter and up $58 million from the end of 2023.

Speaker Change: Adjusted fully diluted earnings per share for the second quarter was $0.33 compared to $0.53 in the same period in 2023.

Jason K. Garland: Finally, with a strong generation of cash flow from operations in the quarter, we increased our cash position to $809 million, up $29 million from the first quarter and up $58 million from the end of 2023. I'll now move to an update on our guidance for the full year of 2024. I'll speak to adjusted financial guidance, but please note that our GAAP and non-GAAP reconciliations for our 2024 guidance are included in the reconciliation tables in today's earnings press release.

Speaker Change: Finally, with a strong generation of cash flow from operations in the quarter, we increased our cash position to $809 million, up $29 million from the first quarter, and up $58 million from the end of 2023.

Jason Garland: On now move to an update on our guidance for the full year of 2024. I'll speak to adjusted financial guidance, but please note that our gap and non-gap reconciliation for our 2024 guidance are included in the reconciliation table and today's earnings press release. And for further clarity, our guidance is fully inclusive of the Flex5 system and met in no acquisitions we made in 2023, but excludes any impact from the pending acquisition of housing. That's highlighted earlier by Tony. We have updated our totally adjusted guidance ranges that we shared in February and April, while we're maintaining guidance within our range.

Speaker Change: I'll now move to an update on our guidance for the full year of 2024.

Speaker Change: I'll speak to adjusted financial guidance, but please note that our GAAP and non-GAAP reconciliations for our 2020 board guidance are included in the reconciliation tables in today's earnings press release.

Jason K. Garland: And for further clarity, our guidance is fully inclusive of the FlexBioSys and MetaNova acquisitions we made in 2023 but excludes any impact from the pending acquisition account. As highlighted earlier by Tony, we have updated our total year adjusted guidance ranges that we shared in February and April.

Speaker Change: And for further clarity, our guidance is fully inclusive of the FlexBioSys and MetaNova acquisitions we made in 2023, but excludes any impact from the pending acquisition of POMPI.

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

Jason K. Garland: While we are maintaining guidance within our range, we now expect total revenue in 2024 to be between $620 and $635 million. We expect year-over-year revenue growth in the second half of the year. At our guidance midpoint, we expect total revenue growth in the second half of 2024 to be eight percent year-over-year and non-COVID revenue growth to be 11 percent. Overall, for the full year, we expect two to five percent of growth for our non-COVID business, with M&A contributing approximately three percentage points of that growth.

Jason Garland: We now expect total revenue in 2024 to leave between $620 and $635 million. We expect year-to-year revenue growth in the second half of the year. At our guidance midpoint, we expect total revenue growth in the second half of 2024 to be 8% year-to-year and non-COVID revenue growth to be 11%. Overall, for the full year, we expect 2 to 5% of growth for our non-COVID business, with M&A contributing approximately 3% to that growth. We still expect to deliver adjusted growth margins in the range of 49 to 50%, essentially flat to 2023. We now expect our adjusted income from operations to be between $76 million to $81 million, or 12 to 13% adjusted operating margin rate, down $7 million and down 1% point from our prior guidance, respectively.

Anthony J. Hunt: While we are maintaining guidance within our range, we now expect total revenue in 2024 to be between $620 and $635 million.

Anthony J. Hunt: We expect year-over-year revenue growth in the second half of the year. At our guidance midpoint, we expect total revenue growth in the second half of 2024 to be 8% year-over-year and non-COVID revenue growth to be 11%.

Anthony J. Hunt: Overall, for the full year, we expect 2-5% of growth for our non-COVID business, with M&A contributing approximately 3 percentage points of that growth.

Jason K. Garland: We still expect to deliver adjusted gross margins in the range of 49 to 50%, essentially flat to 2023. We now expect our adjusted income from operations to be between $76 million and $81 million, or 12 to 13% adjusted operating margin, down $7 million and down one percentage point from our prior guidance, respectively. $4 million of the $7 million decline is coming from lower volumes associated with our revised revenue guidance, and the remaining $3 million is coming from the increase in adjusted operating expenses discussed earlier.

Anthony J. Hunt: We still expect to deliver adjusted gross margins in the range of 49-50%, essentially class of 2023.

Anthony J. Hunt: We now expect our adjusted income from operations to be between $76 million to $81 million, or 12-13% adjusted operating margin rate, down $7 million and down 1 percentage point from our prior guidance, respectively.

Jason Garland: $4 million of the $7 million decline is coming from lower volumes associated with our revised revenue guidance. And the remaining $3 million is coming from the increase in adjusted operating expenses discussed earlier. With a first half adjusted operating margin of 9%, we expect to be able to reach to 12 to 13% through both volume leverage and from further operating expense cost reduction in the second half. Adjusted EBITDA margins are now expected to be in the range of 17 to 18% for the year, reflective of the exclusion of roughly 500 basis points going to fixed appreciation costs from capacity expansions we have made.

Anthony J. Hunt: $4 million of the $7 million decline is coming from lower volumes associated with our revised revenue guidance, and the remaining $3 million is coming from the increase in adjusted operating expenses discussed earlier.

Jason K. Garland: With a first half adjusted operating margin of 9%, we expect to be able to reach 12 to 13% through both volume leverage and further operating expense cost reduction in the second half. Adjusted EBITDA margins are now expected to be in the range of 17 to 18% for the year, reflective of the exclusion of roughly 500 basis points of fixed depreciation costs from capacity expansions we have made.

Anthony J. Hunt: With a first half adjusted operating margin of 9%, we expect to be able to reach the 12-13% through both volume leverage and from further operating expense cost reductions in the second half.

Anthony J. Hunt: Adjusted EBITDA margins are now expected to be in the range of 17 to 18 percent for the year, reflective of the exclusion of roughly 500 basis points of fixed depreciation costs from capacity expansions we have made.

Jason Garland: As discussed earlier, we expect our adjusted other incomes to now be approximately $24 million, and our 2024 adjusted effective tax rate is now expected to be an estimated 20%. With these improvements in adjusted other income and adjusted effective tax rate, we're able to offset the adjusted operating income reduction, and we are holding our guidance for adjusted net income at $80 to $84 million in our adjusted diluted earnings per share of $1.42 to $1.49.

Operator: As discussed earlier, we expect our adjusted other income to now be approximately $24 million, and our 2024 adjusted effective tax rate is now expected to be an estimated 20%. With these improvements in adjusted other income and adjusted effective tax rate, we were able to offset the adjusted operating income reduction, and we are holding our guidance for adjusted net income at $80 to $84 million and adjusted diluted earnings per share of $1.42 to $1.49.

Anthony J. Hunt: As discussed earlier, we expect our adjusted other incomes to now be approximately $24 million, and our 2024 adjusted effective tax rate is now expected to be an estimated 20%.

Anthony J. Hunt: With these improvements in adjusted other income and adjusted effective tax rate, we were able to offset the adjusted operating income reduction, and we are holding our guidance for adjusted net income at $80 to $84 million, and our adjusted diluted earnings per share of $1.42 to $1.49.

Jason Garland: Closing, we are encouraged by the momentum we are seeing in the market coming out of the second quarter. We believe that our focus on key accounts, delivering on innovation, continuing to acquire differentiated technologies like Tante, and executing on our revenue and profitability goal sets us up well for a successful exit to the year and into 2025.

Operator: In closing, we are encouraged by the momentum we are seeing in the market coming out of the second quarter. We believe that our focus on key accounts, delivering on innovation, continuing to acquire differentiated technologies like Tonti, and executing on our revenue and profitability goals sets us up well for a successful exit this year and into 2025. And with that, I'll turn the call back to the operator to open the lines for questions. We will now begin the question and answer session. Press the star, then one.

Anthony J. Hunt: In closing, we are encouraged by the momentum we are seeing in the market coming out of the second quarter. We believe that our focus on key accounts...

Anthony J. Hunt: Delivering on innovation, continuing to acquire differentiated technologies like Tonti, and executing on our revenue and profitability goals sets us up well for a successful exit to the year and into 2025.

Operator: And with that, I'll turn the call back to the operator to open the lines for questions. We will now begin the question and answer session. To ask a question, you may press stars in one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star, then two. We ask that you limit yourselves to one question and one follow-up only. At this time, we will pause momentarily to assemble our roster.

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

Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then 2.

Operator: Speakerphone. Please pick up your handset. At any time, if you have been addressed and you would like to withdraw your request, please press star. We ask that you limit yourselves to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Rachel Vetsdahl of J.P. Morgan. Let's go ahead. Perfect. Good morning, you guys.

Speaker Change: We ask that you limit yourselves to one question and one follow-up only. At this time, we will pause momentarily to assemble our roster.

Rachel Vettstahl: The first question comes from Rachel Vettstahl of JP Morgan.

Speaker Change: The first question comes from Rachel Vetsdahl of J.P. Morgan.

Rachel Vettstahl: Please go ahead. Perfect.

Unknown Executive: Thanks so much for taking the questions. So, my first question is just about the order book. It's great to see some of this continued progress on the order intake, especially within the CDMO customers. You've been vocal about some of that lumpiness that you had been seeing on the CDMO side, and today you called out a book-to-bill of over 1.4, and I believe you said order growth of over 20% within CDMOs as well.

Rachel Vettstahl: Good morning, you guys. Thanks so much for taking the question. My first question is just around the order book. It's great to see some of this continued progress on the order intake, especially within the CDMO customers. You've been vocal about some of that lumpiness that you had been seeing on the CDMO side. And today you called out a book-to-bill of over 1.4. And I believe you said order growth of over 20% within CDMO as well. So can you unpack for us what really drove that strength in the CDMO market and how durable do you think some of this strength is.

Speaker Change: Please go ahead.

Rachel Marie Vatnsdal Olson: Perfect. Good morning, you guys. Thanks so much for taking the questions.

Rachel Marie Vatnsdal Olson: So my first question is just around the order book. It's great to see some of this continued progress on the order intake, especially within the CDMO customers. You've been vocal about some of that lumpiness that you had been seeing on the CDMO side, and today you called out a book-to-bill of over 1.4, and I believe you said order growth of over 20% within CDMOs as well.

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

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

Rachel Vettstahl: And then within those CDMOs, are there any areas that are rebounding faster, whether that's consumables or equipment or certain modalities as well?

Tony Hunt: Now, thanks, Rachel. Now look, in general, I think the music cover book to bill over the last four quarters within very consistent as a company. It's been around one, not a little higher than one. I think the average over the last four quarters being 1.04. So I think we've shown some consistent results.

Unknown Executive: In general, I think when we look at our book to bill over the last four quarters, we've been very consistent as a company. It's been around one, not a little higher than one. I think the average over the last four quarters has been 1.04.

Rachel Marie Vatnsdal Olson: Thanks, Rachel.

Speaker Change: In general, I think when we look at our book to build over the last four quarters, we've been very consistent as a company.

Speaker Change: It's been around 1, not a little higher than 1. I think the average over the last 4 quarters has been 1.04, so I think we've shown some consistent results. We talked at the end of last year about having the first quarter.

Tony Hunt: We talked about the last year about having the first quarter in 2023, where we actually saw a really strong CDMO activity that was in Q4. And that came from our top 10 CDMOs. So there was really strong order quarter in Q4 last year. We had a lawyer quarter in Q1, where we had a couple of the large top 10 CDMOs were down on their ordering pattern.

Unknown Executive: So I think we've shown some consistent results. Great. And then just a nice follow-up.

Speaker Change: In 2023, where we actually saw really strong CBO activity, that was in Q4.

Speaker Change: That came from our top 10 CDMOs. So they were really strong quarter to quarter in Q4 of last year. We had a lighter quarter in Q1 where we had a couple of the large top 10 CDMOs.

Tony Hunt: First of all, we've seen in the past in Q2 was a little different in Q2. The first time we saw the tier two CDMOs come back. If you look at the last six quarters, the tier two CDMOs have been flat. Basically, we were in the same amount for after quarter, but not seeing any uptick. So it's really encouraging that the growth we saw in CDMOs in Q2 did come from the tier two CDMOs. So if you look at it, two of the last three quarters have been very encouraging for CDMOs to keep what's been like.

Speaker Change: We're down on their ordering pattern versus what we've seen in the past. In Q2 it was a little different. In Q2, the first time we saw...

Speaker Change: The Tier-2 CDMOs come back. If you look at the last six quarters, the Tier-2 CDMOs have been flat. Basically we were at the same amount quarter after quarter, but not seeing any uptick. So it was really encouraging that the growth we saw in CDMOs in Q2 did come from the Tier-2 CDMOs.

Speaker Change: So, if you look at it...

Speaker Change: You know, two of the last three quarters have been very encouraging for seeing what's been like. I think the next couple of quarters will tell us a lot.

Tony Hunt: I think the next couple of quarters will tell us a lot. And just as in the side, the strength we saw in CDMOs come from the smaller CDMOs. We also saw a similar pattern in the form of biotext space. So again, another kind of encouraging sign that the long tail of accounts that we have and everybody else has in the industry is beginning to show some light.

Joseph Zimmers-Fyde: And just as an aside...

Joseph Zimmers-Fyde: You know, the strength we saw in CDMOs come from the smaller CDMOs. We also saw a similar pattern in the pharma biotech space. So again, another kind of encouraging sign that the long tail of accounts that we have and everybody else has in the industry is beginning to show some light.

Rachel Vettstahl: Great, and then just when I follow up for seasonality, you'd call out to seasonality in the prepared remarks for three Q.

Unknown Executive: For seasonality, you called out some seasonality in your prepared remarks for 3Q, and we've heard some varying comments on seasonality across your peers that have reported so far. So could you walk us through what you guys are assuming in terms of sequential revenue growth into 3Q and then sequential revenue growth into 4Q as well? And then more broadly, can you just remind us what you consider normal seasonality throughout the year for Repligen? Thank you.

Speaker Change: Great. And then just a nice follow-up. For seasonality, you'd called out some seasonality in the prepared remarks for 3Q. I mean, we've heard some varying comments on seasonality across your peers that have reported so far.

Rachel Vettstahl: I mean, for some very in common from seasonality across your peers that have reported so far, so could you walk us through what are you guys assuming in terms of sequential revenue growth into three Q and then sequential revenue growth into four Q as well?

Speaker Change: So, can you walk us through, what are you guys assuming in terms of sequential revenue growth into 3Q and then sequential revenue growth into 4Q as well? And then, more broadly, can you just remind us, what do you consider normal seasonality throughout the year for Repligen?

Tony Hunt: And then, more broadly, can you just remind us what you consider normal seasonality throughout the year for Repligen? Thank you. Yeah, so maybe the last part of your question, this seasonality, seasonality for Repligen and for our industry tends to be, you know, strong Q2, strong, very strong Q4, lighter starts in the year with Q3 being the latest quarter. No, that's been weird for the last few years, but if you look at it over the course of 10, 15, 20 years, I don't think there's anyone in the industry and by-products you wouldn't tell you that Q3 is typically the lighter quarter.

Unknown Executive: Yeah, so maybe the last part of your question, seasonality. The seasonality for Repligen and for our industry tends to be, you know, strong Q2, strong, very strong Q4, lighter starts of the year with Q3 being the lightest quarter. Now that's been weird for the last few years, but if you look at it over the course of 10, 15, 20 years, I don't think there's anyone in the industry in bioprocessing that wouldn't tell you that Q3 is typically the lighter quarter.

Speaker Change: Yeah, so maybe the last part of your question, this seasonality...

Speaker Change: Seasonality for

Speaker Change: For Repligen and for our industry, tends to be, you know, strong Q2, strong, very strong Q4, lighter start to the year with Q3 being the lightest quarter.

Speaker Change: Unknown Speaker Being weird for the last few years, but if you look at it over the course of...

Speaker Change: I don't think there's anyone in the industry in bioprocessing that wouldn't tell you that Q3 is typically the lighter quarter. I think we're back to more of a normal year. If you look at our performance this year, first half of the year, you know,

Tony Hunt: I think we're back to more of a normal year. If you look at performance this year, first half of the year, you know, ex-climate, ex-protein, you know, we have this protein segment, we're up 4% on revenue. If you go into the second half of the year, we're calling the second half of the year as 11% growth ex-climate for Repligen. And even without COVID, we're going to be up 8% of our midpoint. So I think that's a really positive life for us. And we do expect Q4 to be a very strong quarter. We have a strong final.

Unknown Executive: I think we're back to more of a normal year. If you look at our performance this year, first half of the year, ex-COVID, ex-proteins, where we have this protein headwind, we're up 4% in revenue. If you go into the second half of the year, we're calling the second half of the year 11% of ex-COVID for Repligen, and even without COVID, we're going to be up 8% from our midpoint. So I think that's a really positive [inaudible] The next question is from Dan Arias. Please go ahead.

Speaker Change: We're up 4% on revenue, if you go into the second half of the year, we're calling the second half of the year as 11% of ex-COVID for Repligen.

Speaker Change: And even without COVID, we're going to be up 8% of our midpoint. So I think that's a really positive...

Speaker Change: Slide for us, and we do expect Q4 to be a very strong quarter. We have a strong funnel, we have a lot of orders that came in in Q2 that are going to ship out in Q4, so we're definitely heavily weighted towards Q4 versus Q3.

Tony Hunt: We have a lot of orders that came in in Q2 that are going to ship out in Q4, so we're definitely heavily weighted towards Q4 versus Q3.

Dan Arias: The next question comes from Dan Arias of Stefel. Good morning, guys. Thanks for the questions. Tony, new modality orders up 40%. That's pretty solid.

Speaker Change: The next question comes from Dan Arias of Steve

Unknown Executive: Good morning, guys. Thanks for the questions. Tony, new modality orders are up 40%. That's pretty solid. Do you think that that says something about where the industry is in terms of improvement, or is there a sensitivity to individual projects or customers that kind of makes it less of a broad-based comment? And then relatedly, do you have, at this point, a telogene therapy growth forecast for the year? Yeah, we haven't put a cell and gene therapy forecast in place for the year.

Speaker Change: Please go ahead.

Daniel Anthony Arias: Good morning guys, thanks for the questions. Tony, new modality order is up 40% that's pretty solid. Do you think that says something about where the industry is in terms of improvement or is there a sensitivity to individual projects or customers that kind of makes it less of a broad-based comment?

Dan Arias: Do you think that that says something about where the industry is in terms of improvement? Or is there a sensitivity to individual projects or customers that kind of makes it less of a broad-based comment?

Tony Hunt: And then, relatedly, do you have at this point, do you have like a delinegean therapy growth forecast for the year? Yeah, we haven't put a saline gene therapy forecast in place for the year. I jump down, and you might remember we've turned, you know, we've moved saline gene therapy into a new modality. But the solid saline gene therapy mRNA, exosomes, everything that you would put in new modalities is what we're capturing. Overall, when we talk about the growth and so, you know, when we look at last year, this year, I would say the biggest strength perhaps has been our top 2025 accounts.

Speaker Change: And then relatedly, do you have, at this point, do you have like a cell and gene therapy growth forecast for the year?

Unknown Executive: I'm jumping down, and you might remember we turned the, you know, we moved cell and gene therapy into a new modality. [inaudible] Last year and this year, I would say the biggest strength for us has been our top 2025 accounts. It really hasn't been the long tail of cell and gene therapy and new modality accounts. It's really been the top 2025 we've been scaling. And, you know, that's what we saw in Q1.

Speaker Change: Yeah, we haven't put a cell and gene therapy forecast in place for the year. I'm jumping down and you might remember we turned the, you know, we've moved cell and gene therapy into a new modality.

Speaker Change: Bucket so it's spell, gene therapy, mRNA, exosomes, everything that you would put in new modalities is what we're capturing overall and when we talk about about the growth and so you know when we look at

Speaker Change: Last year and this year, I would say the biggest strength for us has been our top 2025 accounts.

Tony Hunt: It really has something the long tail of saline gene therapy and new modality accounts. It's really been the top 2025 group being scaling. And, you know, that's what we saw. Thank you, one. That's what we saw in Q2. Having it built to build, that slightly above 1.1 was very encouraging for this space. But the growth is coming from, you know, late stage commercial.

Speaker Change: It really hasn't been the long tail of cell and gene therapy and new modality cancer. It's really been the top 20-25 we've been scaling.

Speaker Change: And, you know, that's what we saw in Q1, that's what we saw in Q2. Having it built to build, that slightly above 1.1 was very encouraging for this space.

Unknown Executive: That's what we saw in Q2. Having a built-to-build that's slightly above 1.1 was very encouraging for this space. But the growth is coming from, you know, late-stage commercial. And I'm not sure, Olivier, if you want to add anything to that.

Speaker Change: But the growth is coming from late stage commercial, and I'm not sure, Olivier, if you want to add anything to that.

Olivier Loeillot: And I'm not sure on the day if you want to add anything to that. Daniel, we will obviously be benefiting from the late date and commercial break from the moving forward, and I think you might share the fact that when you were more than 10% and then you all were more than 20%, so we really had great faction on the similarities across the board right now then.

Olivier Loeillot: Yeah, no, we are obviously benefiting from those late-stage and commercial drugs moving forward. And as Tony mentioned, our drug tax revenue was up more than 10%, and the orders were up more than 20%. So we really have great traction on these new modalities across the board right now. Okay, helpful. And then maybe Jason.

Olivier: We are obviously benefiting from the late-stage and commercial growth moving forward. As Tony mentioned, our first-half revenue was up more than 10% and the order was up more than 20%. So we really have great traction on these new modalities across the board right now.

Jason Garland: Okay, couple, and then maybe Jason, you know, generally speaking, when it comes to forecasting, do you feel like predictability? The ability is getting better here. I mean, these stockings run its course; small and mid biotech are no longer in the free fall. So, you know, obviously we'll have to see how the back half shaked out, but come to fall. We're all going to be trying to dial in 2025. So I'm just kind of curious whether you're more optimistic that as you start to talk about 2025 and the outlook there, the air bars around that outlook for next year should be tighter. Visibility can be better and so therefore.

Speaker Change: Okay, helpful. And then maybe Jason, you know, generally speaking, when it comes to forecasting, do you feel like predictability is getting better here? I mean, destockings run its course.

Unknown Executive: You know, generally speaking, when it comes to forecasting, do you feel like predictability is getting better here? I mean, these stockings have run their course. Small and Mid Biotech is no longer in freefall. So, you know, obviously, we'll have to see how the back half shakes out, but come the fall, we're all gonna be trying to dial in 2025. And so I'm just kind of curious whether you're more optimistic that as you start to talk about 2025 and the outlook there, that the error bars around that outlook for next year should be tighter, visibility can be better, and so, therefore.

Speaker Change: Small and mid biotech are no longer in free fall, so, you know, obviously we'll have to see how the back half shakes out, but come the fall, we're all going to be trying to dial in 2025.

Speaker Change: And so I'm just kind of curious whether you're more optimistic that as you start to talk about 2025 and the outlook there, that the error bars around that outlook for next year should be tighter, visibility can be better, and so therefore

Jason Garland: You know, I guess the idea would be that an initial forecast just has a better chance of being the one that you finish with. Yeah, look at me as we continue to see more of the green shoots and the positive signs that that gives us. Again, an overall higher confidence in what we're seeing in the market. You know, we've also talked about the growth in our funnel, right, in our opportunity pipeline, and then also as we've kind of normalized back to a more traditional backlog, right, going into a quarter and going into the year. So I think all of those elements help give us, you know, better visibility, and certainly we'll have more of that as we exit 24 and go in the next year.

Unknown Executive: You know, I guess the idea would be that an initial forecast just has a better chance of being the one that you. Yeah, look, I mean, as we continue to see more of the green shoots and the positive signs, that gives us just, again, an overall, I'll say, higher confidence in what we're seeing in the market.

Speaker Change: You know, I guess the idea would be that an initial forecast just has a better chance of being the one that you finish with.

Speaker Change: Yeah, look, I mean, as we continue to see more of the green shoots and the positive signs, that gives us just, again, an overall, I'll say, higher confidence in what we're seeing in the market.

Unknown Executive: You know, we've also talked about the growth in our funnel, right, in our opportunity pipeline. And then also as we've kind of normalized back to a more traditional backlog, right, going into a quarter and going into the year. So I think all of those elements help give us, you know, better visibility, and certainly we'll have more of that as we exit 24 and go into next year. The next question. Jacob Johnson of Stevens.

Speaker Change: We've also talked about the growth in our funnel, right, in our opportunity pipeline. And then also as we've kind of normalized back to a more traditional backlog, right, going into a quarter and going into the year. So I think all of those.

Speaker Change: Elements help give us, you know, better visibility and certainly we'll have more of that as we exit 24 and go into next year.

Jacob Johnson: The next question comes from Jacob Johnson of Stevens. Please go ahead. Hey, thanks.

Operator: Please go ahead. Hey, thanks. Good morning.

Speaker Change: The next question comes from Jacob Johnson of Stevens. Please go ahead.

Unknown Executive: And Tony, congrats on a great run. On China, you know, we've heard kind of muted commentary around that end market, but you guys kind of called out incremental pressures. Can you just unpack what you're seeing there?

Jacob Johnson: Good morning, and Tony, congrats on a great run on China. You know, we've heard kind of muted commentary around that end market, but you guys kind of called out incremental pressures. Can you just unpack what you're seeing there. And then I'm just curious on China, given this will be 4% of your business this year, much smaller exposure than previously. Does that change your strategy around that end market?

Jacob K. Johnson: Hey, thanks. Good morning. And Tony, congrats on a great run. On China, you know, we've heard kind of muted commentary around that ed market, but you guys kind of called out incremental pressures. Can you just unpack what you're seeing there? And then I'm just curious...

Jacob K. Johnson: On China, given this will be 4% of your business this year, much smaller exposure than previously, does that change your strategy around that end market?

Tony Hunt: Can you take a look at how it takes the question? I think we've been really further deterioration in order that we went through to to.

Unknown Executive: And then I'm just curious, on China, given this will be 4% of your business this year, a much smaller exposure than previously, does that change your strategy around that end market? I'll take this question. I think we've seen further further deceleration in the order that we went through Q2. And the forecast from our team is pretty soft for the second half of this year, which is why we've decided to reduce our guidance expectation by 10 million. And this is really coming from China.

Speaker Change: Thank you for taking the time to answer these questions.

Speaker Change: I think we need further detailoration in order that we went through Q2.

Tony Hunt: And then finally, the podcast from our team is pretty talk for the second half of this year, which is why we decided to reuse our guidance. The expectations by 10 million, and this is really coming from China, so we've been making some action down there.

Speaker Change: And finally, the forecast from our team is pretty soft for the second half of this year, which is why we've decided to reduce our guidance expectation by 10 million, and this is really coming from China. So we've taken some action down there. We've even decided to right-size the team in the region, and we are now looking like we will land probably around 25 million in 2024. So it's a significant drop for us this year versus last year for sure.

Tony Hunt: We've even decided to write a team in the region, and we are now looking like we've been done probably around 25 years in 2024. So it's a significant role for each of us is that to ensure.

Olivier Loeillot: So we've taken some action down there. We've even decided to right-size the team in the region. And we are now looking like we will land probably around 25 million in 2024. So it's a significant drop for us this year versus last year for sure. Okay.

Jason Garland: Okay, got it, and then maybe just Jason on margins and kind of pacing in the back half of this year. We talked about I think another 7% to come out and into H. Can you just help us on the timing of that between 3Q and 4Q as we're thinking about modeling office in the back half. Yeah, that's fine.

Unknown Executive: And then maybe just, Jason, on margins and kind of pacing in the back half of this year, you talked about, I think, another 7% to come out in 2H. Can you just help us on the timing of that between 3Q and 4Q as we're thinking about modeling op-eds in the back half? Yeah, definitely. Look, I mean, for margins, you know, we've been continuing to drive the optimization and cost-saving activities that we've talked about, right, our RPS programs, but consolidations, you know, very diligent on our spending. So you saw some of that improvement already in the second quarter versus the first quarter.

Speaker Change: Okay, got it. And then maybe just, Jason, on margins and kind of pacing in the back half of this year, you talked about I think another 7% to come out in 2H. Can you just help us on the timing of that between 3Q and 4Q as we're thinking about modeling OpEx in the back half?

Jason Garland: Look, I mean, for margins, you know, we've been continuing to drive the optimization cost-epping activities that we've talked about, right? Our RPS programs, like consolidation, you know, are very diligent on our spending. So you saw some of that improvement already, right? And let's second quarter versus the first quarter, we went up in both gross margins and then also the operating margins. You know, gross margin is already tracking, you know, at the total year guide and to Q and expect that to kind of stay there, maybe a little higher in the fourth quarter as that, you know, goes more the higher the range that we've given, maybe slightly above.

Jason K. Garland: Yeah, definitely. Look, I mean, for margins, you know, we've been continuing to drive the optimization and cost-saving activities that we've talked about, right? Our RPS programs, like consolidations, you know, very diligent on our spending. So you saw...

Unknown Executive: We went up in both gross margin and then also the operating margins, you know, gross margin is already tracking, you know, at the total year guide and to queue and expect that to kind of stay there. Maybe a little higher in the fourth quarter because that goes more of the high end of the range that we've given, maybe slightly above and then, you know, as we continue to take. and see the benefits of the actions that we've taken that are already in flight at the operating expense level. Then again, we kind of see that step again in the third quarter.

Speaker Change: Some of that improvement already right in the second quarter versus the first quarter We went up in both gross margin and then also the operating margins You know gross margin is was already is already tracking. You know at the at the total year guide and in 2Q

Speaker Change: and expect that to kind of stay there maybe a little higher in the fourth quarter is that you know goes more the high end of the range that we've given maybe slightly above.

Jason Garland: And then, you know, as we continue to take actions and see the benefits of the actions that we've taken that are already in flight for at the operating expense level, then again, we kind of see that step again in the third quarter. And then fourth quarter, again, when you look at the overall, God, we've given from a revenue profile. That's where you'll really see a bit higher leverage that you get into the fourth quarter. So, you know, step up in three and then a bit more in the fourth quarter. And that'll give us two around that 12 to 13% margin for the year.

Speaker Change: And then, you know, as we continue to take, um...

Speaker Change: Actions and see the benefits of the actions that we've taken that are already in flight at the operating expense level.

Speaker Change: Then, again, we kind of see that stuff again in...

Unknown Executive: And then the fourth quarter again, when you look at the overall guide we've given from a revenue perspective, that's where you'll really see a bit higher leverage that you get into the fourth quarter. So, you know, step up in three and then a bit more in the fourth quarter, and that'll get us to around that twelve to thirteen percent margin for the year. And again, that's really driven by the volume improvement as well as the volume leverage to get with that as well as the operating expense reduction. So continue to execute. The next question. Puneet Souda of Leerink Partners Go ahead.

Speaker Change: in third quarter.

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

Speaker Change: Step up in three, and then a bit more in the fourth quarter. And that'll get us to around that 12 to...

Jason Garland: You know, and again, that that's really driven by both volume improvement as well as the volume leverage to get with that, as well as operating expense reduction. So continue to execute.

Speaker Change: 13% off margin for the year, you know, and again, that's really driven by the volume improvement as well as the volume leverage you get with that as well as the operating expense reduction. So continue to execute.

Puneet Souda: The next question comes from Punizuda of LeeRink Partners. Please do a hand. Yeah, I got, I got, thanks for my questions.

Speaker Change: The next question comes from Puneet Souda of Leerink Partners.

Unknown Executive: Yeah, guys, thanks for my questions and Olivier, congrats, great to have you on board, and Tony, it's been truly a pleasure working with you over the years. So my first question is on CDMOs. Tony, can you tell me a little bit more about what is driving the growth behind the CDMOs? You pointed out growth in tier twos. Is it biotech funding? Is it modality-specific?

Speaker Change: Please go ahead.

Puneet Souda: And Olivia, congrats; great to have you on board. And Tony, it's been truly a pleasure working with you over the years. So my first question is on CDMOs. Can you, Tony, can you tell a little bit more about what is driving the growth behind the CDMOs? You pointed out growth in Tier 2s. Is it biotech funding? Is it modality specific? We continue to hear about some facilities being underutilized and rationalization going on in facilities. So just want to understand the dynamics here. And how much of this is maybe the new modality is running through CDMOs and maybe the DMD drug picking up.

Puneet Souda: Yeah, hi guys, thanks for my questions and Olivier, congrats, great to have you on board and Tony, it's been truly a pleasure working with you over the years.

Puneet Souda: So my first question is on CDMOs. Tony, can you tell a little bit more about what is driving the growth behind CDMOs?

Speaker Change: The CDMOs. You pointed out growth in Tier 2s.

Speaker Change: Is it biotech funding? Is it modality specific?

Unknown Executive: We continue to hear about some facilities being underutilized and rationalization going on in facilities, so I just want to understand the dynamics here and how much of this is maybe the new modalities running through CDMOs and maybe the DMD drug picking up. Yeah, so on the CDMOs, I would say it's early days, right, so two out of the last three quarters have looked good. One quarter was the, you know, our top 10 CDMOs showing real order growth. And we're talking about orders here because revenue has been really light from the CDMO space. And then obviously, in Q2, it was more Tier 2.

Speaker Change: We continue to hear about some facilities being underutilized and rationalization going on in facilities, so just want to understand the dynamics here, and how much of this is maybe the new modalities running through CDMOs and maybe the DMD drug picking up.

Tony Hunt: Yeah, so on the CDMOs, I would say that early days, right? So we two out of the last three quarters looked good. One quarter was the, you know, the our top 10 PDMOs showing real order growth. And we're talking about orders here because revenues being really light from the CDMO space. And then obviously Q2, it was more the Tier 2s. So we're really encouraged that the Tier 2s have bounced back. We think we think it's a combination, honestly, of these talking finally being over, where a lot of the CDMOs either had inventory on hand or had a lower number of projects still are coming through.

Speaker Change: Yeah, so on the CDMOs, I would say that early days, right, so two out of the last three quarters were good. One quarter was the...

Speaker Change: You know, our top 10 PDMOs showing real order growth, and we're talking about orders here because revenue has been really light.

Unknown Executive: So we're really encouraged that the Tier 2s have bounced back. We think it's a combination, honestly, of destocking finally being over, where a lot of the CDMOs either had inventory on hand or had a lower number of projects that were coming through. So there's been a pickup in projects, there's been a pickup in activity, and we think that's encouraging. But obviously, we need to see a few more quarters of that as we go through the second half of the year. Okay, that's helpful.

Speaker Change: from the CDMO space. And then obviously, G2 was more the tier 2. So we're really encouraged that the tier 2s have bounced back. We think it's a combination, honestly, of destocking finally being over where a lot of the CDMOs...

Speaker Change: either had inventory on hand or had a lower number of projects that were coming through. So there's been pick-up in projects, there's been a pick-up in activity, and we think that's encouraging. But obviously we need to see a few more quarters of that as we go through the second half of the year.

Tony Hunt: So the speed to pick up in projects has been a pick up in activity. And we think that's encouraging. But obviously we need to see a few more quarters of that as we go to the second half of the year.

Puneet Souda: Okay, that's helpful.

Unknown Executive: And then, you know, one of the questions we continue to get frequently is 2025. Could you maybe elaborate on a jumping off point from the fourth quarter? And is it fair to say with the guidance now lower to flat for this year? Is, you know, low teens to mid teens, the right way to think about it versus the 15% long term, 15 to 20% long term growth that you had outlined previously? Yeah, a good question, Puneet.

Tony Hunt: And then, you know, one of the questions we continue to get frequently is a 2025. It may be elaborate at jumping off point from the fourth quarter. And is it fair to say with the guidance now lower to flat for this year is, you know, low teams to mid teams the right way to think about it versus the 15% long-term, 15 to 20% long-term growth that you had outlined, you know, previously.

Speaker Change: Okay, that's helpful. And then, you know, one of the questions we continue to get frequently is 2025. Could you maybe elaborate a jumping off point from the fourth quarter? And is it fair to say with the guidance now lower to flat for this year? Is, you know, low teens to mid teens, the right way to think about it versus the 15% long term, 15 to 20% long term growth that you had outlined, you know, previously? Unknown Speaker

Unknown Executive: You know, I'll say the following, right? We're going to wait until the end of the year to talk about 2025. That said, in the second half of 2024, we're going to be up 11% ex-COVID. So I think that's very encouraging. We think our forecasts or guidance that we've put in place for the year, for the second half of the year, are very achievable. We fully expect that when we get into 2025, we're going to go above market. And so we'll wait until we get to the end of the year, and we'll give a lot more commentary on 2025.

Tony Hunt: Yeah, the question Puneet, you know, I'll say the following: we're going to wait until the end of the year to talk about 2025. That said, second half of 2024, we're going to be 11% ex-coded, so I think that's very encouraging. We think our forecast for guidance that we've put in place for the year of the second half of the year is very achievable. We fully expect that we get students 2025. We're going to grow above market, and so we'll wait until we get to end of the year, and we'll give a lot more commentary on 2025.

Speaker Change: Yeah, good question, Puneet. You know, I'll say the following, right? We're going to wait until the end of the year to talk about 2025. That said, second half of 2024, we're going to be up 11% ex-COVID, so I think that's very encouraging. We take part.

Speaker Change: Our forecast, our guidance that we put in place for the year, for the second half of the year, is very achievable. We fully expect that when we get into 2025, we are going to go above market.

Speaker Change: And so we'll wait until we get to end of the year and we'll give a lot more commentary on 2025, but obviously very encouraged by kind of how we've performed in the first half of the year. You can see where we're going in the second half of the year. Next year we're confident of being above market growth.

Tony Hunt: But obviously, very encouraged by kind of how we formed the first half of the year, see where we're going in the second half of the year. Next year, we're confident about being above market growth.

Justin Bowers: So the next question comes from Justin Bowers of Deutsche Bank. Please, go ahead. Hi, good morning, everyone. So all questions one on the opportunity funnel and then one more strategic. But could you talk about the funnel a little bit and how that's changed throughout the year and, you know, maybe how things are based and into Q and early into three Q. Yeah, so I'm going to continue to strengthen. I mean, I'll keep it for us for the basically finally we have significantly year over year, where we have give all that. And it's also increasing financially from what I want to do, but also the total funnel also keeps on increasing.

Unknown Executive: But obviously, very encouraged by kind of how we've performed in the first half of the year, you can see where we're going in the second half of the year. And next year, we're confident of being above market growth. This call is from Justin Bowers of Deutsche Bank. Please go ahead. Hi, good morning, everyone.

Unknown Executive: So two questions, one on the opportunity funnel, and then one more strategic. Could you talk about the funnel a little bit and how that's changed throughout the year and maybe how things pace in 2Q and early into 3Q? Fantastic. Yeah, so the funnel continues to strengthen. I mean, our 50-plus probability funnel is really up significantly year over year. We're really happy about that.

Speaker Change: Hi, good morning, everyone. So, two questions, one on the Opportunity Funnel and then one more strategic. But could you talk about the funnel a little bit and how that's changed throughout the year and, you know, maybe how things paced in 2Q and early into 3Q?

Unknown Executive: But it's also increasing sequentially from 0.01, 0.02, and the total funnel also keeps on increasing. So we are really happy about that. With some of the newcomers we had joining the team as well, we've got much more discipline in quantifying and accounting for those leads, which is giving us also much more visibility. Okay, and then in terms of strategy, you've You just made this acquisition for the resin beads, and you had the partnership with PuroLite a couple years ago.

Speaker Change: Yeah, so the funnel continues to strengthen. I mean, our 50-plus probability funnel is really up significantly year over year. We're really happy about that. But it's also increasing sequentially from 0.01 to 0.02, but also the total funnel also keeps on increasing. So we are really happy about that. With some of the newcomers we had joining the team as well, we've got much more discipline in quantifying and accounting for those leads, which is even so much more busy, busy, busy, busy, busy, you know.

Justin Bowers: So we're really happy about that. Some of the new commas we had joining the team as well. We've got much more DC planning, quantity buying, and policy for those days, which is getting out so much more.

Tony Hunt: Okay, and then in terms of strategy, you've, you've just made this acquisition for the resin beads, and you've had the partnership with Pure Pure Light a couple of years ago. Can you can you talk about, you know, how you're approaching that market and some high level thoughts on the opportunity there and how that can contribute to growth over the next three to five years. Yeah, so I'll start and I'll end it over to the very first some additional comments. So nothing's changed in terms of our interaction with pure light equal now or going forward because we do it is that our partnership with pure light is very much on the map side and we're fully committed to that.

Speaker Change: Okay, and then, in terms of strategy, you've, you've, um,

Speaker Change: You just made this acquisition for the resin beads and

Unknown Executive: Can you talk about, you know, how you're approaching that market and some high-level thoughts on the opportunity there and how that can contribute to growth over the next three to five? Yeah, a solid start.

Speaker Change: You've had the partnership with PuroLite a couple years ago. Can you can you talk about you know how you're approaching that market and some high-level thoughts on the opportunity there and how that can contribute to growth over the next three to five years?

Unknown Executive: And I'll hand it over to Olivier for some additional comments. So nothing's changed in terms of our interaction with Pure Light Ecolab now or going forward because the way we do it is that our partnership with Pure Light is very much on the map side, and we're fully committed to that, and we've been launching products. In fact, in Q2, we launched a brand new Protein A resin that is high caustic, high capacity, and also protease resistant.

Speaker Change: Yeah, so I'll start and I'll hand it over to Olivier for some additional comments. So, nothing's changed in terms of our, um...

Speaker Change: Interaction with Pure Light Ecolab now or going forward because the way we do it is our partnership with Pure Light

Olivier: It's very much on the NAP side, and we're fully committed to that, and we've been launching products. In fact, in Q2, we launched...

Olivier Loeillot: And we've been launching products; in fact, in Q2, we launched a brand new protein, a recipe that is high cost. High capacity and also a proteate resistance. So it's a unique protein, a link and present that's being launched, and we're very hopeful about how that's going to do a marketplace. One of the things that we tried to do when we did the other time deal was, I was really going to be our way of moving in and in a deeper way into the new modality space. The challenge in the new modality space is that the majority of molecules in new dollars are very large molecules; they're like viruses or they're nucleic acids, they're viral vectors.

Speaker Change: A brand new Protein A resin that is high caustic, high capacity, and also protease resistant. So it's a unique Protein A lignin resin that's being launched and we're very hopeful about how that's going to do in the marketplace.

Unknown Executive: So it's a unique Protein A lignin resin that's being launched, and we're very hopeful about how that's going to do in the marketplace. One of the things that we tried to do when we did the Avatide deal was Avatide was really going to be our way of moving in, in a deeper way, into the new modality space. The challenge in the new modality space is that the majority of molecules in new modalities are very large molecules. They're like viruses, they're nucleic acids, they're viral vectors.

Speaker Change: One of the things that we tried to do when we did the Avatar deal was, Avatar was really going to be our way of moving in, in a deeper way, into the humanity space.

Speaker Change: The challenge in the new modality space is that the majority of molecules in new modalities are very large molecules, they're like viruses, they're nucleic acids, they're viral vectors. It requires a very unique...

Unknown Executive: It requires a very unique base feed structure. So the typical agarose feeds that customers use, or even suppliers use, usually do not address the need for higher capacity and higher throughput that's required in this space. So a lot of times, people look at membranes, but then membranes have pretty low capacity. So when we started working with Tansy, we realized that Tansy technology is the perfect combination of our Avatide content with the base feed that gives you the attributes that I just spoke about. So, early days. Very, Very hopeful that this combination is really going to unlock the power of AvaTide. But without that, you can't get there.

Olivier Loeillot: It requires a very unique space feed structure, so the typical augurose feed that customers use or even suppliers use usually do not address the need for higher capacity and higher to put that's required in the space. So a lot of times, people look at memories, but then memories of pretty low capacity. So when we started working with Tancy, we realized that the Tancy technology is the perfect combination of our advertised content with the base feed that gives you the attributes that I just spoke about. So early days, very... Very hopeful that this combination is really going to unlock the power of advertising, but without tapping, you can't get there.

Speaker Change: base feed structure. So the typical agarose

Speaker Change: Feeds that customers use, or even suppliers use.

Speaker Change: Usually do not address the need for higher capacity and higher throughput that's required in this space. So a lot of times people look at membranes, but then membranes have pretty low capacity.

Speaker Change: So, when we started working with Tansy, we realized that the Tansy technology is the perfect combination of our avatar content with the base feed that gives you the attributes that I just spoke about. So, early days, very, um...

Speaker Change: I'm very hopeful that this combination is really going to unlock the power.

Speaker Change: [inaudible]

Unknown Executive: So it's the two together that will be disruptive in the industry. I'm not sure, Olivier, if you want to add to that. No, no, no.

Olivier Loeillot: So it's the two together that will be disruptive at the industry. I'm not sure if you want to add to that.

Olivier Loeillot: No, no, we just had, like you said, the new modalities require new purification solutions that do not exist yet, but also customization is very important because within those new modalities, every product requires a kind of very different technology. And every type operating is very good because within three months, we can develop a new ligand, and within six months now, we can have a full rating or partial focus. So very excited about that.

Olivier Loeillot: I would just add, like you said, yeah, the new modalities require new purification solutions that do not exist yet. But also, customization is very important because within those new modalities, every product requires a kind of very different technology. And our AvaTide offering is very good because, within three months, we can develop a new ligand. And within six months, we can now have a full raisin operational for customers. So we're very excited about that opportunity here. Matt Larew of William Blair

Speaker Change: But also customization is very important because within those new modalities, every product requires a kind of very different technology.

Matt Larew: The next question comes from Matt Larew of William Blair. Please come ahead. Hi, good morning. There was substantial capacity added throughout COVID by you and others in the industry. And I think there was a perception in the venture community that because of the right size and of pipelines and the funding environment, perhaps there would be a change politically and very positive market forces in terms of the ability to pass through inflation, working with sole sources, etc. So this curious now is you sort of emerge past destocking what your sort of initial take is on the market forces going forward.

Speaker Change: The next question comes from Matt Larew of William Blair. Please go ahead.

Operator: .. Hi, good morning.

Matthew Richard Larew: Thank you. Thank you.

Matthew Richard Larew: Hi, good morning.

Unknown Executive: There was substantial capacity added throughout COVID by you and others in the industry, and I think there was a perception in the investor community that, because of the right size of pipelines and the funding environment, perhaps there would be a change that would historically have been very positive market forces in terms of the ability to pass through inflation, working with sole sources, etc. So I'm just curious now as you sort of emerge past that destock.

Matthew Richard Larew: There was substantial capacity added throughout COVID by you and others in the industry, and I think there was a

Matthew Richard Larew: Perception in the investor community that because of the right sizing of pipelines and the funding environment, perhaps there would be a change that would historically have been very positive market forces in terms of the ability to pass through inflation.

Speaker Change: Working with sole sources, etc. So I'm just curious now as you sort of emerge past destocking, what your sort of initial take is on, you know, the market forces going forward. Again, whether that's on pricing, multisource versus single source, your own competitive position, etc.

Unknown Executive: What your sort of initial take is on the market forces going forward, again, whether that's pricing, multisource versus single source, your own competitive position, etc. [inaudible] Within the bioprocess product portfolio, there are a lot of different situations.

Matt Larew: Again, whether that's on pricing, multi-source versus single source, your own competitive position, etc.

Tony Hunt: Matt Larew, I think we're in the bio process product portfolio; there are a lot of different situations. I mean, and what I think is very unique about is, without innovation, when you look at the different product line work into, we don't have that much competition because of the innovative factors we're bringing to the table here. So capacity having capacity available in progress. In fact, it's a real great opportunity because that will enable us to support our customer growing demand in the next few years. Then obviously, if you look at some specific area, I would probably mention the single use industry; it's going to be much more capacity available today, and probably this will generate the more competitive five between the key actors in the field.

Speaker Change: I think we...

Speaker Change: Within the bioprofit product portfolio, there are a lot of different situations. I mean, and what I think Repligen is very unique about is with our innovation, when you look at the different product lines we are into, we don't have that much competition because of the innovative factors we're bringing to the table here. So, capacity, having capacity available in products, in fact, seems to be a really great opportunity because that will enable us to support our customer growing demand in the next few years.

Unknown Executive: I mean, and what I think Repligen is very unique about is our innovation. When you look at the different product lines we are into, we don't have that much competition because of the innovative factors we're bringing to the table here. So, capacity, having capacity available in products, in fact, seems to be a really great opportunity because that will enable us to support our customers' growing demand in the next few years.

Unknown Executive: Then, obviously, if you look at some specific areas, and I would probably mention the single-use industry, there isn't much more capacity available today, and probably this will generate a more competitive fight between the key actors in the field. But really, again, innovation is of essence for Repligen, and thanks to that, we are likely to be having that renewable capacity from this great performance point. Okay, thanks.

Speaker Change: Then, obviously, if you look at some specific areas, and I would probably mention the single-use industry, there is definitely much more capacity available today, and probably this will generate a more competitive fight between the key actors in the field. But really, again, innovation is our patent for Epigen, and thanks to that, we are likely to be having that available capacity from this great opportunity for us.

Tony Hunt: But really, again, innovation is okay for the general thanks to that, so we are like, you're having that really good capacity for the agreeable importance.

Matt Larew: Okay, thanks.

Unknown Executive: And then just maybe one more follow-up on the CDMO side. You referenced earlier, broadly, sort of equipment versus consumables, just kind of curious, as a PDMO. [inaudible] Transcripts provided by Transcription Outsourcing, LLC. Transcribed by https://otter.ai. Yeah, maybe I'll start on it.

Matt Larew: And then just want to follow up on the CDMO side. You referenced earlier broadly, sort of equipment versus consumables, just kind of curious as a CDMO strength brought into tier two is what you're seeing in terms of equipment versus consumables and if that's perhaps indicative of new projects being started versus perhaps old projects being turned on. Any additional call there would be helpful. Yeah, maybe I'll start on it. I think on the CDMO front. When we look at capital equipment, and we look at the orders that came in for capital equipment because we had a lighter order on revenue for capital equipment, a YouTuber orders were strong, but it definitely spanned CDMOs and spam farmer.

Speaker Change: Okay, thanks. And then just one more follow-up on the CDMO side. You referenced earlier, broadly, sort of equipment versus consumables. Just kind of curious,

Speaker Change: As the CDMO strength broadened to Tier 2s, what you're seeing in terms of equipment for consumables, and if that's perhaps indicative of new projects being started versus perhaps old projects being turned on, any additional call out there would be helpful.

Unknown Executive: I think on the CDMO front. We look at capital equipment, and we look at the orders that came in for capital equipment, because we had a lighter order on revenue for capital equipment in Q2, but orders were strong. But it definitely spanned CDMOs and spanned pharma. I don't think there was a particular weighting towards CDMOs in the quarter versus pharma. I think it was just across the board.

Speaker Change: Yeah, maybe I'll start on it. I think on the CDMO front,

Speaker Change: When we look at capital equipment, when we look at the orders that came in for capital equipment, because we had a lighter order on revenue for capital equipment in Q2, but orders were strong.

Tony Hunt: I don't think there was a particular weighting towards CDMO in the quarter versus farm; I think it was just cross the board. And I think it reflects pretty the competitiveness of our as product language, the partisan product line. And it's something that we've been very focused on. No, I don't think there's anything to draw in terms of whether, you know, capital equipment was stronger in TDMO versus Marline. Just think we had a healthy, uptick in orders for the RS portfolio in the quarter. Just give it some of the commentary in your prepared remarks on improving funnel and orders relative to, you know, what you talked about in Q1.

Speaker Change: But it definitely spammed CMOs and spammed Barnard.

Speaker Change: I don't think there was a particular weighting towards CDMOs in the order versus pharma. I think it was just across the board. And I think it reflects really the competitiveness of our RS product line, which is the artisan product line. And it's something that we've been very focused on.

Unknown Executive: And I think it really reflects the competitiveness of our RS product line, which is the artisan product line. And it's something that we've been very focused on. So I don't think there's anything to draw in terms of whether, you know, capital equipment was stronger in TD Mall versus Pharma. I just think we had a healthy uptick in orders for the RS portfolio in the quarter. Olivier, I'm not sure if you want to add to that. [inaudible] Our next question comes from Conor McNamara of RBC. Please go ahead.

Speaker Change: So I don't think there's anything to draw in terms of whether capital equipment was stronger in TD Mall versus Pharma. I just think we had a healthy uptick in orders for the RS portfolio in the quarter. Olivier, I'm not sure if you want to add to that.

Olivier: Thank you. Bye.

Speaker Change: Our next question comes from Conor McNamara of RBC Capital Markets. Please go ahead.

Unknown Executive: Just given some of the commentary in your prepared remark on improving funnel and orders relative to, you know, what you talked about in Q1, why did the non-China revenue guide not increase? Because everything sounds like that, you know, the funnel is definitely improving. So how did that flow through to a guidance increase on the non-China business? Yeah, so good question, Conor.

Conor Noel McNamara: Just give us some of the commentary in your prepared remark on improving funnel and orders relative to, you know, what you talked about in Q1. Why did the non-China revenue guide not increase? Because everything sounds like that, you know, the funnel is definitely improving. So how did that flow through to a guidance increase on the non-China business?

Tony Hunt: Why did the non-China revenue guide not increase? Because everything sounds like it, you know, the funnel is definitely improved, so either that flow through to a guidance increase on the non-China business. Yeah, so good question, Conor. I look when you look at our guidance, you're right, the guidance, so 1% drop off midpoint is really coming from China. We think we put, honestly, the light guidance in place at the beginning of the year; everything is holding. We believe we'll be in the range that we have outlined today. The only drop off really is going to China.

Unknown Executive: I look when you look at our guidance, you're right, the guidance, So the 1% drop off midpoint is really coming from China. We think we put, honestly, the right guidance in place at the beginning of the year. Everything is holding.

Conor Noel McNamara: Good question, Conor. When you look at our guidance, you're right. The guidance for

Speaker Change: So 1% drop off midpoint is really coming from China.

Speaker Change: We think we put, honestly, the right guidance in place at the beginning of the year. Everything is holding. We believe we'll be in the range that we have outlined today. The only drop-off, really, is coming from China. We expect by the end of the year we're going to be in that range.

Unknown Executive: We believe we'll be in the range that we have outlined today. The only drop-off, really, is coming from China. We expect by the end of the year, we're going to be in that range. We're showing consistency from quarter to quarter, which I think is very encouraging. And we're showing, Conor, 11% growth ex-COVID in the second half of the year. I think that's really encouraging. Great.

Tony Hunt: We expect, by the end of the year, we're going to be in that range. You know, we're showing consistency from quarter to quarter, which I think is very encouraging, and we're showing Conor 11% growth X COVID in the second half of the year. I think that's really encouraging.

Speaker Change: We're showing consistency from quarter to quarter, which I think is very encouraging. And we're showing, Conor, 11% growth ex-COVID in the second half of the year. I think that's really encouraging.

Tony Hunt: Great. Thanks, Tony.

Unknown Executive: And then just, can you comment at all on the intra-quarter progression and activity, and, if you can, any, you know, what progress you're seeing so far in July? So, Interquarter Progress Conor in Q2 or Interquarter Progress Q3? Q2 and how July's stacking up so far. Yeah, so Q2, I think was, as you know, when we reported out in April. At the end of April, we had a solid April, and then I think June was a little stronger, was stronger than May, but there was nothing, they were all pretty consistent with June definitely being stronger than the first two months. Um, and then July and August, call it a start.

Tony Hunt: And then just be coming at all on the intra-quarter progression and activity. And if you can, any, you know, what progress you're seeing so far in July. So the intra-quarter progress Conor Q2 or intra-quarter progress Q3. You asked Q2, and then how July's that going up so far? So Q2, I think was, as you know, when we reported out in the end of April, we had a solid April. And then I think June was a little stronger, with stronger than May, but there was nothing. They were all pretty consistent with June being definitely stronger than the first two months.

Conor: So the Interquarter Progress Conor in Q2 or Interquarter Progress Q3?

Speaker Change: Q2 and how July's stacking up so far. Yeah, so Q2 I think was, as you know, when we reported out in

Speaker Change: At the end of April , we had a solid April , and then I think June was a little stronger than May, but there was nothing, they were all pretty consistent with June definitely being stronger than the first two months.

Unknown Executive: I mean, we're still in the early days of the quarter, and, uh, typically, this is, uh, one of the later quarters, just simply because of seasonality, and most of Europe is on vacation for at least the month of August. Our next question comes from Dan Leonard of UBS. Please go ahead. Thank you very much.

Tony Hunt: And then July, opposite college start, and we were still, you know, early days of the quarter. And typically, this is one of the layer of borders, just simply because of seasonality and most of Europe's on vacation for at least month of August.

Speaker Change: And then July , August is how it starts. I mean, we're still, you know, early days of the quarter, and typically, this is one of the later quarters, just simply because of seasonality, and most of Europe's on vacation for at least the month of August .

Dan Leonard: Our next question comes from Dan Leonard of UBS.

Speaker Change: Our next question comes from Dan Leonard of UBS. Please go ahead.

Dan Leonard: Please go ahead. Thank you very much. I have a follow-up question on sales phasing in the second half of the year. Can you clarify: you expect Q3 revenue to be down sequentially and also lower than Q1 revenue? Is that correct?

Unknown Executive: I have a follow-up question on sales phasing in the second half of the year. Can you clarify? You expect Q3 revenue to be down sequentially and also lower than Q1. No, we're not saying that it's going to be lower than Q1 revenue; we're thinking it's in that range of Q1 to Q2. So it's definitely in that one, that's the 155 range. That's probably where we'll see it. I got it.

Daniel Louis Leonard: Thank you very much. I have a follow-up question on sales phasing in the second half of the year. Can you clarify, you expect Q3 revenue to be down sequentially and also lower than Q1 revenue, is that correct?

Tony Hunt: No, we're not saying that it's going to be lower than Q1 revenue. We're thinking it's in that range of Q1 to Q2. It's over there. It's definitely in that one; that's the one 155 range. That's probably where we see it.

Speaker Change: No, we're not saying that it's going to be lower than Q1, we're thinking it's in that range of Q1 to Q2.

Speaker Change: So it's definitely in that 150-155 range. That's probably where we see it.

Tony Hunt: Got it. And then Tony, can you clarify what is the order growth assumption in Q3 sequentially, order growth assumption required to hit that fourth quarter ramp? Yeah, there's no like our order assumption is the second half of the year order assumption. So the order assumption is 4% order of growth. And then the second half of the year to hit them in points of order guidance. So it's 5% revenue growth in the second half of the year to get to the point where it is.

Unknown Executive: And then, Tony, can you clarify what the order growth assumption in Q3, the sequential order growth assumption required to hit that fourth quarter ramp? Yeah, there's no, like our order growth assumption is the second half of the year order growth assumption. So the order assumption is 4% order growth in the second half of the year to hit the midpoint of our guidance. And it's 5% revenue growth in the second half of the year to hit the midpoint of our guidance. Thank you.

Speaker Change: Our order assumption is the 2nd half of the year order assumption, so the order assumption is 4% order growth in the 2nd half of the year to hit the midpoint of our guidance, and it's 5% revenue growth in the 2nd half of the year to hit the midpoint of our guidance.

Paul Knight: Thank you.

Speaker Change: Thank you.

Paul Knight: The next question comes from Paul Knight of KeyBank. Please go ahead. Yeah, could you talk to what portion of revenue, what percent of revenue is from? I would say new modalities, but I think the definition more would be where you really have limited competition, such as Opus, VPE, ATF, Adventide. What's your kind of percentage range on that, Olivier or Tony? Yeah, so Paul, I would say on new modalities, it's about 20% of our revenue that is coming from new modalities. Obviously, you know, we've had a good first half of the year. The growth is coming from the top 20, 20, 25 accounts.

Unknown Executive: The next question is from Paul Knight of KeyBank. Could you talk to me about what portion of revenue, what percent of revenue is from new modalities, but I think the definition more would be where you really have limited competition, such as Opus, VPE, ATF, Aventide, what's your kind of percentage range on that, Olivier or Tony? Yeah, so Paul, I would say on new modalities. It's about 20% of our revenue is coming from new modalities.

Speaker Change: The next question comes from Paul Knight of KeyBank. Please go ahead.

Paul Richard Knight: I could you talk to what portion of revenue, what percent of revenue is from

Speaker Change: I would say new modalities, but I think the definition more would be...

Speaker Change: Where you really have limited competition, such as Opus, VPE, ATF, Abbottide, what's your kind of percentage range on that, Olivier or Tony?

Unknown Executive: Obviously, you know, we've had a good first half of the year. The growth is coming from the top 2025 accounts. I think it's really hard to bundle all the other product lines that we have that we would say are somewhat unique to Repligen. In general, if you take away our business management space, everything else is somewhat unique and independent. So hard to put a number on it.

Speaker Change: Yeah, so, Paul, I would say on, uh...

Speaker Change: On new modalities, it's about 20% of our revenue is coming from new modalities. Obviously, we've had a good first half of the year. The growth is coming from the top 20, 25 accounts. I think it's really hard to bundle all the other product lines that we have that we would say are somewhat unique to Repligen.

Olivier Loeillot: I think it's really hard to bundle all the other product lines that we have that we would say are somewhat unique to religion. In general, you know, if you take outside our management space, everything else is somewhat unique and independent. So hard to put a number on it, but I would say in the second half of the year, the 11% growth that's coded is probably a good proxy for all those businesses are all growing in the second half of the year.

Speaker Change: In general, you know, if you take

Speaker Change: Outside our business management space, everything else is somewhat unique and independent.

Unknown Executive: But I would say for the second half of the year, the 11% growth ex COVID is probably a good proxy for how those businesses are all growing in the second half of the year. And then the last question on my side would be, under the account management structure that you've implemented, Olivier, how much of the growth we're seeing is coming from that? Or I guess a better way to think about it, as we think about 11% growth, how much of that is coming from, you know, this effectiveness of the sales, Transcribed by https://otter.ai, A half, a quarter, can you talk to that? I'll add to my soul.

Speaker Change: So, hard to put a number on it, but I would say in the second half of the year, the 11% growth ex-COVID is probably a good proxy for how those businesses are all growing in the second half of the year.

Olivier Loeillot: And then the last question on my side would be under the account management structure that you implemented. Olivier, how much of the growth we're seeing is coming from that, or I guess a better way to think about it as we think about 11% growth. How much of that is coming from, you know, this effectiveness of the sales change? Is it a half a quarter? Can you talk to that? Thanks.

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

Speaker Change: As we think about 11% growth, how much of that is coming from, you know, this effectiveness of the sales change?

Speaker Change: A half, a quarter, can you talk to that? Thanks.

Olivier Loeillot: Now, actually, so it's still a little bit early data, you know, as we really put in place organization about the year ago. So we are really off to a very great start. And it's like a department both from the sale and all the product is really great.

Unknown Executive: Still a little bit early days, as you know, as we really put in place that organization about a year ago or so. We are really off to a very great start. In fact, the performance both from the sales and order point of view is really great. And so far, we really want to see how 2024 plays out. And then we will be able to give more details probably by 2025. But, yes, the traction we're getting from the CSOM team is absolutely phenomenal right now. The next question is from Matt Hewitt of Craig Hallam Capital Group. Please go ahead.

Olivier: I'll have to be so...

Olivier: It's still a little bit early days, as you know, as we really put in place that organization about a year ago or so. We are really off to a very great start.

Olivier: And in fact, the performance both from a sales and order point of view is really great. But so far, we really want to see how 2024 plays out. And then we will be able to give more details probably by 2025. But yes, the traction we're getting from those KF Town team is absolutely excellent right now.

Olivier Loeillot: So far, we really want to see how 2024 plays out, and then we will be able to give more details probably by 2025. But yes, the traction we're getting from the key to the team is absolutely a final like nine.

Matt Hewitt: The next question comes from Matt Hewitt of Craig Holland Capital Group. Please go ahead. Good morning, and thank you for taking the questions.

Speaker Change: The next question comes from Matt Hewitt of Craig Hallam Capital Group.

Unknown Executive: Good morning, and thank you for taking the questions. Maybe first up on a high level, some of your peers have talked about or have noted a lag from the improving funding environment to orders and purchases. Yet, you spoke of a pretty strong book to bill, a strong order flow. Are you maybe, you know, seeing earlier progress with, you know, because of the funding? Or is there a chance that you could even see an acceleration?

Matt Hewitt: Maybe first up on the on a high level view some of your peers have talked about or have noted a lag from the improving funding environment to the orders and purchases. Yet you spoke to a pretty strong book to build a strong order flow. Are you maybe, you know, seeing earlier progress with, you know, because of the funding, or is there a chance that you could see an excel preparation, even in some of the ordering patterns that you've already seen here in Q2? I think that I think the commentary from our peers is consistent with our plots and feelings as well.

Olivier: Please.

Speaker Change: Let's go ahead.

Speaker Change: Good morning and thank you for taking the questions. Maybe first up on a high level view, some of your peers have talked about or have noted a lag from the improving funding environment to the orders and purchases.

Speaker Change: yet you spoke to a pretty strong book-to-bill,

Speaker Change: Maybe, you know, seeing earlier progress with, you know, because of the funding, or is there a chance that you could see an acceleration even in some of the ordering patterns that you've already seen here in Q2?

Unknown Executive: In some of the ordering patterns that you've already seen here in Q2, I think the commentary from our peers is consistent with our thoughts and feelings as well. There definitely is a lag from improving biotech funding to orders. There's no doubt about it.

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

Tony Hunt: There's definitely a lag from improving biotech funding to orders. There's no doubt about it. So when we look at our, you know, Q2 and rightfully pointing out that our book to bell was higher than what others have seen, I think it's it's more around the consistency that we've been able to put into. You know how we perform as a company over the last quarter, so that we've been around that 1.1.0, 1.04; I think it's the average. We've a lot, as Olivier said earlier, we have a lot of unique products in our portfolio, so I think that helps a little bit.

Unknown Executive: So when we look at our, you know, Q2, and rightfully point out that our book-to-bill is higher than what others have seen, I think it's more around the consistency that we've been able to put into, you know, how we perform as a company over the last four quarters. But we feel like this is the turning point in the markets, and we expect, you know, as we move into this, you know, high single-digit overall growth, low double-digit ex-COVID, that that's a real positive sign as we exit 2024 and move into 2025. I got it.

Speaker Change: So, when we look at our, you know, Q2, and rightfully we're pointing out that our book to bill is higher than what others have seen.

Speaker Change: I think it's more around the consistency that we've been able to put into how we perform as a company over the last four quarters so far. We've been around that 1.0, 1.04 I think is the average.

Speaker Change: We have a lot of, as Olivier said earlier, we have a lot of unique products in our portfolio, so I think that helps a little bit. We also probably didn't have as much of the

Tony Hunt: We also probably didn't have as much of the. You know, de-stocking to deal with as some of the other players in the industry, so I think that's also positive for us. But we feel like this is being the turning point in the markets. And we expect, you know, as we move into this, you know, high single digit overall growth, the low double digit X COVID, but that's a real positive sign as we exit 2024. Got it.

Speaker Change: You know, de-stocking to deal with as some of the other players in the industry, so I think that's also positive for us.

Speaker Change: We feel like this is being the turning point in the markets, and we expect, you know, as we move into this, you know, high single-digit overall growth, low double-digit ex-COVID, that that's a real positive sign as we exit 2024 and move into 2025.

Unknown Executive: And then maybe separately, you're implementing another 7% cost reduction here in the second half. Is there any risk that the markets come back faster than you're forecasting or anticipating and you kind of get caught a little flat-footed? From a headcount perspective, I think this is the third cost optimization that you've implemented here in the past year or so. And I'm just wondering if there's any risk that if the markets come back quickly, you might not be able to adapt faster.

Jason Garland: And then maybe separately, you're implementing another 7% cost reduction here in the second half. Is there any risk that the markets come back faster than you, you know, you're forecasting or anticipating, and you kind of get caught a little flat-footed from a head count perspective. I think this is what the third cost optimization that you've implemented here in the past year or so, and I'm just wondering if there's any risk that if the markets come back quickly, you might not be able to adapt fast enough. I think where we feel like we're well, you know, I'll say set up to execute a lot of the cost savings that we'll continue to fall through in the second half have been continuing to be more on the operating expense side, certainly at the factory level.

Speaker Change: Got it. And then maybe separately, you're implementing another 7% cost reduction here in the second half.

Speaker Change #100: Is there any risk that the markets come back faster than you're forecasting or anticipating and you kind of get caught a little flat-footed? From a headcount perspective, I think this is, what, the third cost optimization.

Speaker Change #100: that you've implemented here in the past year or so. And I'm just wondering if there's any risk that if the markets come back quickly, you might not be able to adapt fast enough.

Unknown Executive: I think we're, we're, we feel like we're, well, you know, I'll say set up to execute a lot of the cost savings that will continue to fall through in the second half of then continue to then in flight and happen to be more on the operating expense side, certainly at the factory level. We have that capacity to grow here in the second half and be established to go into 25. So I don't really see that as a risk for us.

Speaker Change #101: I think we're, we're, we feel like we're, we're well, you know, I'll say set up to execute a lot of the

Speaker Change #102: The cost savings that will continue to fall through in the second half have been continuing to be in flight and happen to be more on the operating expense side.

Jason Garland: We have that capacity to grow here in the second half and be established to go into 25. So I don't really see that as a risk for us. We've been managing this very closely and have good line site. I wouldn't think about it as cost reduction, so it's more like we are now in a load where we put a lot more focus on productivity and, you know, in sourcing because of all the deals we've done over the last nine or 10 years that gives us opportunities to reduce internal costs. So it's kind of a bigger picture of cost reduction, but there's a lot of positive things going on internally in the company that are more productivity related in sourcing related, you know, just looking at supplier management.

Speaker Change #102: Certainly at the factory level, you know, we have that capacity to grow here in the second half and be established to go into 25. So I don't really see that as a risk for us. We've been managing this very closely.

Unknown Executive: We've been managing this very closely and have good line of sight. And Matt, I wouldn't, I wouldn't think about it as cost reductions as most people do. It's more like we are now in a mode where we put a lot more focus on productivity and, you know, sourcing because of all the deals we've done over the last nine or 10 years that give us opportunities to reduce internal costs. So it's kind of a bigger picture of cost reduction, but there are a lot of positive things going on internally in the company that are more productivity-related in sourcing-related, you know, just looking at supplier management, all of those things help towards an improving margin profile for the company. Matt Stanton of Jeffries.

Speaker Change #102: And Matt, I wouldn't think about it as cost reduction to its most.

Matt: It's more like we are now in a mode where...

Matt: We've put a lot more focus on productivity.

Matt: And, you know, in sourcing, because of all the deals we've done over the last nine or ten years, that gives us opportunities to...

Matt: Reduce internal costs. So it's kind of a bigger picture of cost reduction, but there's a lot of

Matt: Positive things going on internally in the company that are more productivity-related, insourcing-related. You know, just looking at supplier management. All of those things help towards an improving margin profile for the company.

Jason Garland: All of those things help towards improving margin profile for the company.

Matt Stanton: from Matt Stanton of Jeffries. Please, go ahead. Okay, thanks. We'd be for one for Tony, Olivier. I want to ask the question that was talked about a little bit earlier. You talked about your ability to drive above market growth here in the back after the year in 25. I guess the question is, what is, you know, market growth? How do we think about the growth algorithm for the industry going forward? Clearly, Matt has made a big driver, commercial volumes and modalities scaling up. I think finding a little better, but China's tough. There's an ongoing debate on yield improvements pricing.

Matt: Our next question comes from Matt Stanton of Jeffries. Please go ahead.

Unknown Executive: Please go ahead. Hey, thanks. Maybe for one for Tony or Olivier, I want to ask a question that was talked about a little bit earlier. You talked about your ability to drive above market growth here in the back half of the year in 2025. I guess the question is, what is, you know, market growth? How do we think about the growth algorithm for the industry going forward? Clearly, MADs remain a big driver, commercial volumes, new modalities scaling up, biotech funding a little better, but China is tough.

Matthew Jay Stanton: Hey, thanks. Maybe for one for Tony or Olivier, I want to ask a question that was talked about a little bit earlier. You talked about your ability to drive above market growth here in the back half of the year in 25, I guess.

Speaker Change #105: The question is, what is, you know, market growth? How do we think about the growth algorithm for the industry going forward? Clearly, MADS remained a big driver, commercial volumes, new modalities scaling up.

Unknown Executive: There's an ongoing debate on yield improvements and pricing. There are a lot of moving pieces, but if you had to package it up, how do we think about, kind of, Market Growth going forward? Should it be at pre-COVID levels?

Speaker Change #106: and they're all talking about biotech funding a little better, but China's tough. There's an ongoing debate on yield improvements, pricing. There's a lot of moving pieces, but if you had to package it up, how do we think about kind of

Matt Stanton: There's a lot of moving people.

Tony Hunt: But if you had to package it up, how do we think about kind of market growth going forward? Should it be at, you know, call pre-COVID levels? I guess it's less about replicability to outgrow the market and really what is the market growth you're outgrowing. Thanks. Yeah, the way I look at it is, you can see the progress that everybody in bioprocessing that's made, especially in Q2. So, you know, as our peers reported out over the last week to 10 days, I think there's a lot more green shoots now than there were 12 months ago.

Unknown Executive: I guess it's less about Repligen's ability to outgrow the market and really what the market growth is for you. Yeah, the way I look at it is, you can see the progress that everybody in bioprocessing has made, especially in Q2. So, you know, as our peers reported out over the last week to 10 days, I think there are a lot more green shoots now than there were 12 months ago.

Speaker Change #107: Market Growth Going Forward. Should it be at pre-COVID levels? I guess it's less about Repligen's ability to outgrow the market and really what is the market growth you're outgrowing. Thanks.

Speaker Change #108: Yeah, the way I look at it is, um, you,

Speaker Change #109: You can see the progress that everybody in bioprocessing has made, especially in Q2. So, you know, as our peers reported out over the last week to 10 days, I think there's a lot more green shoots.

Unknown Executive: And yeah, we need to, you know, it needs to be determined a little bit what overall market growth is going to be as we go forward. We're not the market leaders, so it's kind of hard for me to tell you that all market growth is going to be X percent in 2025. I think what we do know is historically, you know, 8 to 12 percent has been a really good proxy over the course of 5, 10, 15 years to represent what the market and bioprocess is. So whether the, you know, whether the overall market growth next year is at the low end of that, or the medium end of that, remains to be seen. And we'll see, you know, when it happens.

Tony Hunt: And yeah, we need to, you know, it needs to be determined a little bit, but overall market growth is going to be as we go forward. We're not the market leaders, so it's kind of hard for me to tell you that old market growth is going to be X percent in 2025. I think what we do know is, historically, 8 to 12 percent has been a really good proxy, whether the course of 5, 10, 15 years to represent market in bioprocesses. So whether the overall market growth next year is at the no end of that.

Speaker Change #109: Now that it was 12 months ago, and yeah, we need to, you know, it needs to be determined a little bit what overall market growth is going to be as we go forward. We're not the market leaders, so it's kind of hard for me to tell you that all market growth is going to be X percent in 2025.

Speaker Change #110: I think what we do know is historically, you know, H12% has been a really good proxy over the course of 5, 10, 15 years to represent what market and bioprocesses.

Speaker Change #110: So whether the, you know, whether the overall market growth next year is at the low end of that, medium end of that, it's, you know, that remains to be seen and we'll see, you know, when

Tony Hunt: Meeting at the best, you know, that remains to be seen and we'll see, you know, when the bigger players report out at the end of the year or actually beginning the next year on what they see as overall market growth. But it's definitely going to be better in 2024, and I think we're trying to get the right direction for everyone.

Unknown Executive: The bigger players will report out at the end of the year or actually at the beginning of next year on what they see as overall market growth, but it's definitely going to be better than 2024. And I think we're turning in the right direction for everyone. What could you talk about putting on potential incremental margins as the top line comes back and we return to double digits next year? Transcripts provided by Transcription Outsourcing, LLC.

Speaker Change #110: The bigger players report out at the end of the year, or actually beginning of next year on what they see as overall market growth, but it's definitely going to be better than 2024, and I think we're trending in the right direction for everyone.

Jason Garland: Thanks, that's helpful.

Jason Garland: And Jason, maybe one, you know, on margins, you're updated guide and prior to the mid-deemed operating margins in the back half of the year. Any more color you can provide if you think about it being off point for 25, you know, understand a lot, depend on where top line lands, you know, next year, but in terms of cost of type efficiency, something a little bit of spending is coming back in on the commercial side. Can you talk a little bit about kind of what's in your control for 25 and what's tied to the top line and any finer point you could talk to put on, you know, potential incremental margins as the top line.

Jason K. Garland: Thanks, that's helpful. And Jason, maybe one, you know, on margins, your updated guide implies kind of mid-teens operating margins in the back half of the year.

Jason K. Garland: Any more color you can provide as we think about it being off point for...

Jason K. Garland: 25, you know, understand a lot will depend on where.

Jason K. Garland: Top Line Lens

Speaker Change #111: No next year, but in terms of cost outside efficiency, sounds like a little bit of spending is coming back in on the commercial side.

Speaker Change #112: Do you want to talk a little bit about kind of...

Speaker Change #112: [inaudible]

Jason Garland: It comes back return to double digit next year. I think the second half incremental here are pretty healthy. So any finer point you can put on as you think about incremental for 25. Thanks. Yeah, well, certainly, you know, we're not ready to convince you are our full guide on our guide on 25, but I go back to Tony's point about we've got a bigger picture effort on how we continue to manage costs and drive efficiency. You know, each and every day into that will certainly be a tail on course as we go into 25. Also, certainly as you look at the profile of profitability through.

Speaker Change #113: Second half incrementals here are pretty healthy so any finer point you can put on as we think about incrementals for 2025. Thanks

Unknown Executive: Yeah, well, certainly, you know, we're not ready to issue our full guide on our guide to on 25. But But I go back to Tony's point about how we've got a bigger picture effort on how we, you know, continue to manage costs and drive efficiency, you know, each and every day. And so that will certainly be a tailwind course as we go into 25.

Speaker Change #114: Yeah, well, certainly, you know, we're not ready to issue our full guide on our guide on 25, but but I go back to Tony's

Anthony J. Hunt: Point of that, we've got a bigger picture after it.

Speaker Change #115: on how we, you know, continue to manage cost and drive efficiency.

Speaker Change #115: You know, each and every day, and so that will certainly be a tailwind course as we go into 25.

Speaker Change #115: Also, certainly, as you look at the profile profitability through...

Jason Garland: You know, as we've gone from first quarter to second quarter and that's a role in third quarter, but that gives us a good jump off point as well as we go into the 2025 and again, you know, with the framework by which will ultimately guide on 25 will be. You know, continuing to drive gross margin improvement and then getting more, you know, leverage if you will on top line growth out pasting our products, and that's what we really see it fall through at the operating margin level. So I think we're positioning ourselves well, and more comments as we get into the beginning here.

Unknown Executive: Also, certainly, as you look at the profile of profitability through, you know, as we've gone from first quarter to second quarter and as we've grown third to fourth, that gives us a good jumping off point as well as we go into 2025. And again, the framework by which we'll, you know, ultimately guide on 25 will be, you know, continuing to drive gross margin improvement and then getting more, you know, leverage, if you will, on top line growth, outpacing our effects.

Speaker Change #115: You know, as we've gone from first quarter to second quarter, and as we roll in third to fourth.

Speaker Change #115: But that gives us a good jump-off point as well as we go into...

Speaker Change #115: for 2025. And again, the...

Speaker Change #115: You know, the framework by which we'll, you know, ultimately guide on 25 will be.

Speaker Change #115: You know, continuing to drive gross margin improvement, and then getting more, you know, leverage, if you will, on top line growth, outpacing our OPEX. And that's where we'll really see it fall through at the operating margin level. So I think we're positioning ourselves well and more incumbents as we get into the beginning of the year.

Operator: Our next.

Tom Deborsy: Next question comes from Tom Deborsy of Neffron Research. Please go ahead. Hi guys, I'll keep this short because I'm going to be very over, but just if you can remind me of your visibility, but just in terms of, you know, my recollection has been, you typically have pretty strong visibility on a six month basis in terms of more firm orders. And so, you know, there's been some questions. You know, around, you know, I guess weakness is key to moving to Q4. So, just, you know, can you just comment a little bit more about that specific visibility that you have kind of, you know, through the end of this year.

Unknown Executive: And that's where we really see it fall through at the operating margin level. So I think we're positioning ourselves well, and more comments as we get into the beginning of the year. This is from Tom DeBorsey of Nefron. Hi guys, I'll keep this short because I know you're running over, but just if you could remind me of your visibility.

Speaker Change #115: Our next question comes from Tom DiBorsi of Nefron Research. Please go ahead.

Tom DiBorsi: Hi guys, I'll keep this short because I know you're running over, but just, if you could remind me on your visibility.

Unknown Executive: Unknown Speaker My recollection is that you typically have pretty strong visibility on a six-month basis in terms of more firm orders. And so, you know, there's been some questions around, you know, I guess weakness in Q3 moving to Q4, so just, you know, can you just comment a little bit more about that specific visibility that you have? [inaudible] Before COVID, most of the bioprocessing companies had about three to four months of backlog in hand. And then during COVID, it jumped up to about 10 months for each of the bioprocessing companies, so it changed the picture completely.

Tom DiBorsi: Just in terms of, you know, my recollection is that you typically have pretty strong visibility on a six-month basis in terms of more firm orders. And so, you know, there's been some questions around

Speaker Change #117: You know, I guess, weakness in Q3, moving to Q4, and so, just, you know, can you just comment a little bit more about that specific visibility that you have, kind of, you know, through the edge of this year?

Olivier Loeillot: Now, Olivier, here, yeah, I mean, it could be for Kobe. Most of the bioprofitting company had about three to four months of backlog in hand. And then during Kobe, this jump up to about 10 months before each of the bioprofitting company, so it changed the picture completely. Well, one of the reasons why it would be good to have been like, is there very much behind one out from the last two years, because we went back to probably a typical three to four months backlog in our hand. So, when you think about it, when you're about three to four months of backlog, you typically answer in the quarter, having about 60, 65% of quarter to cube.

Speaker Change #117: [inaudible]

Speaker Change #118: This has been a presentation of the Center for Economic Co-operation and Development and the Center for Economic Co-operation and Development.

Speaker Change #119: Most of the bioprocessing companies had about three to four months of backlog in hand. And then during COVID, this jumped up to about 10 months for each of the bioprocessing companies. So it changed the picture completely. Well, one of the reasons why all of this book-to-bill had been like, they're very much behind one after the last three of these, because we went back to probably a typical three to four months of backlog in our hands. So when you think about it, when you have about three to four months of backlog, you typically enter in the quarter having about 60-65% of your quarter secured, meaning you need to collect about one-third of your quarter in the quarter. And then the rest you have in your backlog is typically sitting in the next quarter, and then a little bit.

Unknown Executive: Well, one of the reasons why all of these book-to-bill conversions have been like, they're very much behind one now for the last three of these because we went back to probably a typical three to four months of backlog in our hands. So when you think about it, when you have about three to four months of backlog, you typically enter the quarter having about 60-65% of your quarter secured, meaning you need to collect about one third of your quarter in the quarter, and then the rest you have in your backlog is typically sitting in the next quarter and then a little bit in the second quarter and beyond. But yeah, typically three to four months of backlog and 60-65% of the quarter secured when you enter the new quarter. Great Thank you. The next was Subbu Nambi of Guggenheim Securities. Please go ahead.

Olivier Loeillot: Meaning, you need to collect about one sort of your water in the water. And then the right way, you have in your back, you think sitting in the next quarter and then a little bit in the second quarter. But, yeah, typically it's with four months of backlog and 60, 65% of the quarter, because we're not really doing a new quarter. Great, thank you.

Speaker Change #119: in the second quarter and beyond. But yeah, typically three to four months of backlog and 60, 65% of the quarter ticked away when you enter into the new quarter.

Speaker Change #120: Great, thank you.

Subu Nambi: The next question comes from Subu Nambi of Guggenheim Insecurities. Please go ahead. Yeah, thank you guys for taking my question. Actually, an extension to Tom's question on this. Where would you say you have the best? Is it what they can have? Would it be, no, would it be medium versus farmer, or would it be customer sizes? Do you repeat those hard to hear? Is there you asking if the second part of the year is going to be more driven by CDMO versus farmer? It was hard to hear. So, the support gives you the confidence on the second half trends.

Speaker Change #120: The next question comes from Subu Nambi of Guggenheim Securities. Please go ahead.

Unknown Executive: Thank you guys for taking my question, actually an extension to Tom's question on this. Where would you say you have the best visibility for the second half? Would it be, you know, would it be CDMO versus pharma, or would it be customers? To repeat, it was hard to hear. Are you asking if the second half of the year is going to be more driven by CDMO versus pharma? Um, I was hard to hear.

Unknown Attendee: Yeah, thank you guys for taking my question. Actually, an extension to Tom's question on visibility. Where would you say you have the best visibility for second half? Would it be, you know, would it be CDMA versus Pharma or would it be customer sizes?

Speaker Change #122: To repeat, I was hard to hear. Are you asking if the second half of the year is going to be more driven by CDMO versus pharma?

Unknown Executive: So the support gives you confidence about the second half trends. Would you say you have a better handle on CDMOs or pharma biotech or the customer side? Yeah, I would say that.

Speaker Change #123: So the support gives you the confidence on the second half trends. Would you say you have a better handle on CDMOs or pharma, biotech or customer side?

Subu Nambi: Would you say you have a better handle on CDMOs, the more farmer-wide or customer sizes? Yeah, I would say that farmers being a real strength for us through the first half of the year. So, I expect that we continue for the second half of the year. Consumables are being really strong. First half of the year, again, I expect consumables to stay strong. Same thing on new modalities. I think you're right; wild cards are a little bit, you know, how much we see of the consistency from CDMOs and how much capital equipment comes back. But we would expect capital equipment to be stronger in the second half of the year given that customer's tends to purchase in late Q3 going into Q4.

Unknown Executive: You know, pharma has been a real strength for us through the first half of the year, so I expect that that will continue for the second half of the year. Consumables have been really strong the first half of the year. Again, I expect consumables to stay strong. Same thing with new modalities.

Speaker Change #124: Yeah, I would say that, um...

Speaker Change #125: Pharma has been a real strength for us through the first half of the year, so I expect that that will continue for the second half of the year. Consumables have been really strong the first half of the year. Again, I expect consumables to stay strong.

Unknown Executive: I think you're right, wildcards a little bit. You know, how much we see of the consistency from CDMOs and how much capital equipment comes back. But we would expect capital equipment to be stronger in the second half of the year, given that customers tend to purchase in late Q3 going into Q4. So, you know, I think for us, the more important piece is for us to get to the midpoint of guidance. We need 4% order growth and 5% revenue growth. I think that's achievable.

Speaker Change #125: Same thing on new modalities, I think you're right, wildcards a little bit, you know, how much we see of the consistency from CDMOs and how much capital equipment comes back, but we would expect capital equipment to be stronger in the second half of the year given that.

Speaker Change #128: Customers tend to purchase in late Q3 going into Q4, so you know I think for us the more important piece is for us to get midpoint of guidance. We need 4% order growth, 5% revenue growth. I think that's achievable.

Subu Nambi: So, you know, I think for us, the more important piece is for us to get the midpoint of guidance when you 4% or 5% revenue growth. I think that's achievable. Thank you, guys.

Unknown Executive: Goddard. Super helpful. Thank you, guys. And this concludes our question and answer session. Back over to Mr. Great, thanks guys for joining us, and last time for me to say this, but we'll see you guys back in November, and obviously Olivier will be leading the conversation then. So look forward to listening in on the progress that Repligen will be making as we go through the year. Thank you for attending today's presentation.

Speaker Change #126: Got it. Super helpful. Thank you, guys.

This concludes our question and answer session.

I would like to turn the conference back over to Mr. Tony Hunt for any closing remarks. Great. Thanks, guys, for joining us, and last time for me to say those, but we'll see you guys back in November.

Speaker Change #127: This concludes our question and answer session. I would like to turn the conference back over to Mr. Tony Hunt for any closing remarks.

Speaker Change #127: Thanks.

Anthony J. Hunt: Great, thanks guys for joining us and last time for me to say this, but we'll see you guys back in November .

And obviously, Olivier will be meeting the conversations that I'm so looking forward to listening in on the progress of what this will be making as we go to the air.

Speaker Change #129: Obviously, Olivier will be leading the conversation, but I'm still looking forward to listening in on the progress that Repligen will be making as we go through the year.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change #130: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.