Q3 2024 Qiagen NV Earnings Call

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Ladies and gentlemen, thank you for standing by I am Katy your call operator, welcome and thank you for joining Qiagen.

Operator 2: Ladies and gentlemen, thank you for standing by. I am Katie, your call operator. Welcome, and thank you for joining QIAGEN's Q3 2024 Earnings Conference Call Webcast. At this time, all participants are in listen-only mode. Please be advised that this call is being recorded at QIAGEN's request, and will be made available on their Internet site. The prepared remarks will be followed by a question-and-answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. At this time, I'd like to introduce your host, John Gilardi, Vice President, Head of Corporate Communications and Investor Relations at QIAGEN. Please go ahead.

Q3, 'twenty 'twenty four earnings conference call webcast.

At this time all participants are in a listen only mode. Please be advised that this call is being recorded at qiagen to request it.

Available on their Internet site.

Speaker Change: The prepared remarks will be followed by a question and answer session. If you would like to ask a question you May Press Star followed by one on your Touchtone telephone. Please press the star key followed by zero for operator assistance at this time I'd like to introduce your host John Guardi, Vice President head of corporate Communications and Investor Relations at Qiagen. Please go ahead.

John Guardi: So thank you operator, and thank you to all of you for joining us for our quarterly results call. We're pleased to have you with us and appreciate your interest in Qiagen.

John Gilardi: Thank you, operator, and thank you to all of you for joining us for our quarterly results call. We're pleased to have you with us and appreciate your interest in QIAGEN. This call is being webcast live and will be archived in the IR section of our website. You can also find a copy of the quarterly results, press release, and a presentation on our website. Now, I'd like to remind everyone that we will be discussing forward-looking statements on this call. Actual results may differ materially from those projected in any statement that we make. The factors that could cause our actual results to differ materially are discussed in our most recent Form 20-F on file with the SEC and also available on our website. In addition, we will be referring to certain financial measures not prepared following generally accepted accounting principles, or GAAP.

This call is being webcast live will be archived in the IR section of our website. You can also find a copy of the quarterly results press release and a presentation on our website.

John Guardi: I'd like to remind everyone that we will be discussing forward looking statements on this call actual results may differ materially from those projected in any statements that we make the factors that could cause our actual results to differ materially are discussed in our most recent form 20-F on file with the SEC and also available on our website. In addition, we will be referring.

Speaker Change: Certain financial measures not prepared following generally accepted accounting principles or GAAP. We believe these non cat measures provide useful information to investors you can find a reconciliation in our release all references to EPS refer to diluted EPS, So Terry Bernard our Chief Executive Officer enrolling attackers are.

John Gilardi: We believe these non-GAAP measures provide useful information to investors. You can find a reconciliation in our release. All references to EPS refer to diluted EPS. Thierry Bernard, our Chief Executive Officer, and Roland Sackers, our Chief Financial Officer, will start with some remarks on the key initiatives for the quarter, followed by a Q&A session. With that, let me hand over the call to Thierry.

Speaker Change: Chief Financial Officer, we will start with some remarks on the key initiatives for the quarter, followed by a Q&A session with that let me hand over to the call to Terry.

Terry Bernard: Thank you, Joe and Hello, and good morning, good afternoon already been good evening, depending on when you are in the world and thanking all right and thank you for joining us I'm very pleased to share that our teams have once again exceeded our targets and delivered another solid quarter of results.

Thierry Bernard: Thank you, John. Hello, good morning, good afternoon, or even good evening, depending on when you are in the world, thank you for joining us. I'm very pleased to share that our teams have once again exceeded our targets and delivered another solid quarter of results. Thanks to our heavily recurring revenues, which represent over 85% of our sales, we are very well on track to achieve our goals for 2024 in this still challenging macro environment. I want here to recognize the impact of our outstanding QIAGENers. Before we get into the performance of Q3, let me take a moment to celebrate some truly remarkable achievements. 2024 is another year where our QIAGEN customers were awarded Nobel Prizes for their invaluable contribution to advancing science and improving healthcare. This is a real testament to the impact of our customers on our daily lives.

Speaker Change: Well, we're a heavy the recurring revenues, which represent over 85% of I would say is we are very well on track to achieve our goals for 2024 in this steel.

Speaker Change: LNG macro environment.

Speaker Change: I want to recognize the impact of our outstanding notes.

Speaker Change: But before we get into the performance of Guar for free let me take a moment to celebrate some truly remarkable achievement.

Speaker Change: Two fold in in 'twenty four.

Speaker Change: He is another year, where our customers were awarded Nobel prices for their invaluable contributions to advancing science and improving health care.

Speaker Change: This is a real testament to the impact of our customers on our daily lives.

Thierry Bernard: As we celebrate our 40th anniversary in 2024, we are more committed than ever to delivering the highest quality product that will support future Nobel Prize winners in helping to make improvement in life possible. Now let me highlight our key messages for Q3. First and foremost, we exceeded our outlook for sales and adjusted earnings in Q3. We delivered $502 million of sales in Q3, representing 6% growth at constant exchange rate. This exceeded the outlook for at least $495 million at CER. Growth excluding the NeuMoDx franchise was also 6% CER. To be noted, we saw a 10% growth in our Diagnostic Solutions product group. Consumables and related revenues grew 8% CER over Q3 2023 and contributed 89% to our sales. We continue to see cautious customer spending on instruments, those sales declined 9% CER.

Speaker Change: As we celebrate our 14th anniversary in 2024, we are more committed than ever to delivering the highest quality product that we'd shreveport future Nobel Prize windows in helping to make improvement in life placebo.

Speaker Change: So now let me highlight our key message is for Q3.

Speaker Change: First and fore and foremost we exceeded our outlook for sales and adjusted earnings in the third quarter.

Speaker Change: We delivered $502 million upsells in the third quarter, representing 6% growth at constant exchange rates.

Speaker Change: This exceeded the outlook for at least $495 million at C E O.

Speaker Change: Growth, excluding the pneumonia franchise was also 6% CER.

Speaker Change: To be noted we saw a 10% growth in our diagnostic solutions product group.

Speaker Change: Consumables and related revenues grew 8% C E. R. Over Q3 of two 420 free and contributed 89% to ourselves.

Speaker Change: We continue to see cautious customer spending on instrument and Doe says declined 9% C. R.

Speaker Change: Adjusted diluted EPS were <unk> 57 cents and the results at constant exchange rates with 58 cents.

Thierry Bernard: Adjusted diluted EPS were $0.57, and results at constant exchange rates were $0.58, and this was $0.03 above our outlook for at least $0.55. Second key message, we achieved several important product launches and key milestones. This positions QIAGEN strongly for future growth as we set our ambitions towards delivering on our 2028 commitments. As a first highlight, QIAstat had a very strong quarter with 40% CER sales growth driven by increasing demand worldwide and more than 150 placements of instruments in Q3. We have now received four FDA clearances for QIAstat panels, and this includes the announcements just this week of the clearance for the meningitis encephalitis panel. Let me here express my appreciation to our QIAstat team for this tremendous accomplishment, but we are not done yet on our menu expansion plan.

Speaker Change: And this was <unk> <unk> above our outlook for at least 55 cents.

Speaker Change: Second key message.

Speaker Change: We achieved several important product launches and key milestones.

Speaker Change: This positions us strongly for future growth as we said our ambitions towards delivering on our 2028 commitments.

Speaker Change: As the first highlight.

Speaker Change: Okay, Yes that had a very strong quarter with 40% CER sales growth driven by increasing demand worldwide.

Speaker Change: And more than 150 placement.

Speaker Change: <unk> instruments in the fourth quarter.

Speaker Change: We have now received four FDA clearances for carriers that panics.

Speaker Change: And this includes the announcements just this week.

Speaker Change: Clear runs for the meningitis encephalitis panel.

Speaker Change: Let me hear express my appreciation to our team for this tremendous accomplishment.

Speaker Change: But we are not done yet on that where our menu expansion plans.

In September we also received new approvals in Europe.

Thierry Bernard: In September, we also received new approval in Europe under the new IVDR regulations for the QIAstat instrument, along with the respiratory and GI, gastrointestinal, panels. Across QIAGEN, we now have over 80% of our regulated products transferred to this new and more rigorous regulatory framework. Building on the success in syndromic testing, we are also expanding the ecosystem for QIAstat into precision medicine. QIAstat is the only syndromic system endorsed by pharmaceutical companies, and we have signed a number of pharma collaborations to use this technology in precision medicine application. Most recently, we announced collaboration with AstraZeneca and Eli Lilly. The goal is to provide QIAstat tests to help guide treatment decisions for various chronic diseases with AstraZeneca, and also a new test for Eli Lilly for use in diagnosis of Alzheimer's disease. If we move now to the QIAcuity digital PCR system, we also have seen significant progress.

The new IBD or regulations for the chaos that instrument, along with the respiratory and Gi gastrointestinal pundits.

Speaker Change: But cross Guy Yeah, Jim.

We now have over 80% of our rig of our regulated product transfer to this new and more rigorous regulatory framework.

Speaker Change: Building on the success in Syndromic testing, we are also expanding the ecosystem for care you start into precision medicine.

Speaker Change: Okay I'll start.

As the only he's the only syndromic system endorsed by pharmaceutical companies and.

Speaker Change: And we have signed a number of pharma collaboration to use this technology in precision medicine application.

Speaker Change: Most recently, we announced collaboration with Astrazeneca and Eli Lilly.

The goal is to provide guidance that test to help guide treatment decisions for values chronic diseases with Astrazeneca and also a new test for Eli Lilly for using diagnosis of Alzheimer disease.

Speaker Change: If we move now to the cash equity digital PCR system. We also have seen significant progress.

Thierry Bernard: A key development was the addition of 100 new validated assays to support our customers in areas such as cancer research, inherited genetic disorders, and infectious disease surveillance. We can now offer well over 2,400 different high-quality assays developed specifically for digital PCR that are accessible to our customers through our online GeneGlobe portal. Another key development in digital PCR was creating a version of QIAcuity for clinical applications. The first placements have been made after the FDA approval in September of QIAcuityDx, a four-plate version designed specifically for clinical customers and with an initial focus on oncology. QIAcuityDx offers many capabilities that make it a better solution for customers against qPCR or next-generation sequencing. It is very well suited for monitoring cancer progression and supporting clinical decision-making in a very meaningful way. Now we continue to build out the application portfolio for QIAcuityDx.

Speaker Change: A key development was the addition of 100, new validated assays to support that with customers in areas such as cancer research inherited genetic disorders.

In fixtures disease civilians.

Speaker Change: We can now for well over 2004 hundred different high quality assays developed specifically for digital PCR that are accessible to our customers through our online gene Globe Portola.

Keith: So no there Keith you broke 19 digital PCR was creating a version of cash equity for clinical applications.

Speaker Change: First placements have been made after the FDA approval in September of <unk> diagnostic or fault played really shouldn't designed specifically for clinical customers and with an initial focus on oncology.

Speaker Change: Okay, Yeah accretive diagnostic offers many capabilities that make it a better solution for customers against Q P. C. R O a next generation sequencing.

Speaker Change: It is very well suited for monitoring cancer progression and she brought in clinical decision, making in a very meaningful way.

Speaker Change: And now we continue to build out the application portfolio for carriers with your diagnostic.

Thierry Bernard: Turning now to the third key message, we again delivered a significant improvement in profitability and free cash flow. Our adjusted operating income margin improved by 3% to 29.6% of sales from Q3 2023. This came from a combination of factors, including efficiency gains across the business, as well as the decision in June to discontinue the NeuMoDx system by 2025. In terms of free cash flow, here we saw a 73% increase to $364 million in the first nine months of 2024. Last, we are reaffirming our full year 2024 outlook for net sales, and we are increasing our target for adjusted EPS. The net sales outlook continues to be at least $1.985 billion at constant exchange rates.

Turning now to the fifth key message, we again delivered a significant improvement in profitability and free cash flow.

Speaker Change: Our adjusted operating income margin improved by 3% to 29, 6% of sales from the first quarter of 2023.

Speaker Change: This came from a combination of factors, including defense efficiency gains across the business as well as the decision in June to discontinue the new module system by 2025.

Speaker Change: In terms of free cash flow here, we saw a 73% increased to $364 million in the first nine months of two forgone in 'twenty four.

Speaker Change: Thus, we are reaffirming our full year 'twenty for outlook for net sales and we are increasing our target for adjusted EPS.

Speaker Change: The net sales outlook continues to be at least 1 billion $985 at constant exchange rates.

Thierry Bernard: This takes into consideration the solid base business performance to date in 2024, as well as the reduced sales expectation for NeuMoDx, and those are tracking as we had expected for 2024. We have increased our adjusted EPS target to at least $2.19 from the prior outlook, which was $2.16, also at CER. Last, I would also here like to mention a change in our executive committee. Jonathan Sheldon, our head of our QIAGEN Digital Insights business, has stepped down from this role. Let me express our appreciation to Jonathan for his many important contributions to developing our bioinformatic business, and we wish him all the best in his future endeavors.

Speaker Change: This takes into consideration the solid base business performance to date in 2024.

Speaker Change: Well as the reduced sales expectations for <unk>.

Speaker Change: And those are tracking as we had expected for 'twenty four.

Speaker Change: We have increased our adjusted EPS target to at least $2.19 from the prior outlook, which was $2 16 also at CER.

Speaker Change: Last I would also here like to mention a change in our executive Committee.

Speaker Change: That doesn't sell down our head of our Qiagen digital insight business.

Speaker Change: He has stepped down from his role.

Speaker Change: Let me express our appreciation to Jonathan for his many important contributions to developing our bioinformatics business and we wish him all the best in his future endeavors.

Those of you who hadn't at our capital market day in New York had the chance to meet Dominique Jones from I will call. You didn't did you enjoyed inside team and I'm looking forward to working with him and the rest of the <unk> team.

Thierry Bernard: Those of you who attended our Capital Market day in New York had the chance to meet Dominic Jones from our QIAGEN Digital Insights team, and I'm looking forward to working with him and the rest of the QDI team. As a quick summary, our teams are committed to delivering on the goals for 2024 in a challenging macro environment. Doing so will position QIAGEN for further profitable growth in 2025 and put us on a course to achieve our midterm targets for 2028. I would like now to hand over to Roland for a review of our financial results.

Speaker Change: So as a quick summary.

Speaker Change: Our teams are committed to delivering on the goals for 2024.

Speaker Change: Challenging micro environment.

Speaker Change: Doing so will position <unk> for further profitable growth in 2025 and put us on a course to achieve our midterm targets for 2028.

Speaker Change: I would like now to hand over to hold on for a review of our financial results.

Speaker Change: Thank you Terry.

Roland Sackers: Thank you, Thierry. Hello, everyone. Thank you as well for me for joining our call. We are pleased to report strong financial results for Q3. Let me give you four key figures to highlight that performance. A 3 percentage point improvement in the adjusted operating income margin to 29.6%. An 18% increase in adjusted operating income. An 11% rise in adjusted net income compared to the same period last year. A 73% increase in free cash flow for the first nine months of 2024 to $364 million. Looking ahead, we are confident in our ability to achieve our full-year targets. We have reaffirmed our outlook for net sales of at least $1.985 billion at CER, we increased the adjusted EPS target to at least $2.19 at CER. This is up $0.09 from the outlook we gave in January.

Speaker Change: Hello, everyone. Thank you Isabella for me and for joining our call. We are pleased to report strong financial results for the third quarter.

Speaker Change: Let me give you four key figures two highlights that performance.

Speaker Change: A three percentage point improvement is that just a poetic income margin to 29, 6%.

And 18% increase in adjusted operating income.

Speaker Change: And then 11% rise in adjusted net income compared to the same period last year.

Roland Sackers: Let me now give you some additional insights into our results and sales trends from the quarter. In terms of sales, we saw higher sales in the Sample Technologies, Diagnostic Solutions, and PCR product group over Q3 2023, while sales in Genomics and NGS group were unchanged. In Sample Technologies, we saw 1% CER growth over the year growth quarter, driven by demand for consumables, in particular, kits used on our instruments and automation systems. This growth trend is coming from the launch of upgraded systems, in particular, QIAcube Connect and EZ2 Connect. We are preparing for important new system launches in 2025 and 2026, and we expect these to drive further growth. In Diagnostic Solutions, sales rose 10% CER and were led by the strong growth in the QuantiFERON TB test, which marked the sixth consecutive quarter of sales above $100 million.

Roland Sackers: QIAstat-Dx sales grew at a dynamic 40% CER pace, thanks to significant double-digit sales gains in consumables and also double-digit growth in instrument sales. We are seeing growth across all regions and are on track to exceed the 2024 sales goal for over $100 million in revenues and also deliver on our target for over 600 new system placements for the year. In the PCR product group, we saw double-digit CER growth in various consumable kits. This was especially the case for consumables used on the QIAcuity digital PCR system, where consumable sales grew at a very strong double-digit pace. We are on track for an overall double-digit sales growth in 2024 over 2023. Like others, we continue to see cautious spending by customers on new instruments.

This was especially the case for consumables used other kind of acuity digital PCR system, where consumable sales grew at a very strong double digit pace and we are on track for an overall double digit sales cough in 'twenty for over 23.

Speaker Change: But like others, we continue to see cautious spending by customers on new instruments.

Speaker Change: It's the same time customer interest is strong and we are confident in future growth opportunities as the life Sciences and also increasingly in clinical Heska, Mr. Weitz launch of psychiatry with TD ex Russia.

Roland Sackers: At the same time, customer interest is strong, and we are confident in future growth opportunities in the life sciences and also increasingly in clinical healthcare with the recent launch of the QIAcuityDx version. In the Genomics/NGS product group, sales were unchanged in Q3 2024 over the year ago period. We saw improving trends for sales of universal kits that are used to prepare samples for processing on sequencers. Sales in the QIAGEN Digital Insights business declined at a low single-digit CER rate. This was due mainly to the transition of customers, particularly in the pharma industry, from longer-term license agreements to software-as-a-service, or SaaS, subscription contracts. We saw good growth in our clinical business, and the midterm growth trends are clearly in favor of QDI, given the growing levels for genomic data being generated by our customers.

Speaker Change: Is the genomics and Jess product group sales were unchanged in the third quarter of 24 or was a year ago period.

Speaker Change: We saw improving trends for sales of your divisor kits that I use to prepare samples for processing on secret sauce.

Speaker Change: Since it's a digitally.

Speaker Change: Inside business declined at a low single digit CR rate. This was due mainly to the transition of customers, particularly the pharma industry from a longer term license agreements to software as a surface or SaaS subscription contracts.

Speaker Change: But we saw good cough in our clinical business. That's the midterm growth trends are clearly in favor of QD I, given the growing levels for genomic data being generated by our customers.

Speaker Change: In light of such potential we are planning to host a virtual deep dive event for you in December to share more perspectives on the Q dye business.

Roland Sackers: In light of that potential, we are planning to host a virtual deep dive event for you in December to share more perspectives on the QDI business. Further information will be announced soon about this online event. Let's now move to results for the regions. We are investing to strengthen our international presence, and this was reflected in results for the quarter. In the Europe, Middle East, Africa region, sales rose 8% CER. The top performing countries included France and Italy, and we are seeing the contributions from our expansion initiatives in the Middle East. In the Americas, sales rose 6% CER over Q3 of 2023, with solid growth in consumables that more than offset lower instrument sales in light of the cautious spending environment. In the Asia Pacific Japan region, sales were down 2% CER in Q3.

Speaker Change: So all of that information will be announced soon about this online event.

Speaker Change: Let's now move to results for the reasons, we are investing to strengthen our international presence.

Speaker Change: Zest plus reflected in our results for the quarter.

Speaker Change: The Europe Middle East Africa region sales rose, 8% CER.

Speaker Change: Top performing countries, including France, and Italy, and we are seeing the contributions from our expansion initiatives in the middle East.

Speaker Change: It's the Americas sales rose, 6% C out what was the third quarter of 'twenty, three with solid Crawford consumables set more than offset lower instrument sales in light of the cautious spending environment.

Speaker Change: In the Asia Pacific, Japan region sales were down 2% CER in the third quarter.

Speaker Change: China continued to decline at a high single digit CR, where it was a year group here yet.

Roland Sackers: China continued to decline at a high single-digit CER rate over the year ago period. The challenging market conditions continue in China, and we are cautious in predicting a path to recovery. It's important to note that China only made up about 5% of our sales in Q3. The rest of this region delivered single-digit CER growth thanks to our business expansion in Australia, Japan, India, and Singapore. Let's now review the rest of the income statement for Q3. As I mentioned earlier, adjusted operating income rose 18% to $149 million. Key contributors to the improved operating margin were across all lines, in the adjusted cost margin, as well as lower levels of R&D investments and SG&A costs as a share of sales over the year ago period. The outcome was the adjusted operating income margin increasing three percentage points to 29.6% of sales.

Speaker Change: The challenging market conditions continue in China, and we are cautious in predicting a path to recovery.

Speaker Change: However, it's important to note that China only made up about 5% of all sales for the third quarter.

Roland Sackers: These results underscore our commitment to solid, profitable growth, while also freeing up resources to reinvest into targeted growth opportunities. The adjusted gross margin was 66.5% for the quarter and an increase of 40 basis points from Q3 2023. The biggest contributor was QIAstat-Dx, which had a favorable impact on the consumable product mix, and we also had benefits from higher production capacity utilization. Additional contributions came from the Sample Technologies consumables business and QIAcuity Digital PCR. R&D investments were 8.9% of sales, down about 1 percentage point from the year ago period. In particular, the stop of R&D project in NeuMoDx has been driving this decrease. Sales and marketing expenses declined about 1.2 percentage points, and this was mainly due to effective cost management through our efficiency programs. At the same time, we are stepping up targeted investments into our pillars.

Speaker Change: Additional contributions came from the south to technology consumables business and chaos that digital Pcr.

Speaker Change: D investments of about eight 9% of sales down about one percentage point from the year ago period.

Speaker Change: Particulars of stop off are the projects in northern boutiques has been driving this decrease.

Speaker Change: Sales and marketing expenses declined about one two percentage points and this was mainly due to effective cost management through our efficiency programs.

Speaker Change: At the same time, we are stepping up targeted investments into our pillars.

Roland Sackers: General and administrative expenses were steady at 5.9% of sales, as we maintain a high level of IT and cybersecurity investments combined with efficiency gains. Regarding the restructuring costs for NeuMoDx and related projects, we continue to expect total charges of approximately $400 million and for about 75% to be non-cash. The bulk of this charge came in the Q2 results with a pre-tax charge of about $350 million, of which 80% involved non-cash items. We incurred about $60 million of additional charges in the Q3 and expect about $20 to $25 million for the Q4. Some remaining charges may come in the H1 2025 as we complete the program. As for adjusted EPS, reported results were $0.57, while results at constant exchange rates were $0.58 and $0.03 ahead of the outlook for at least $0.55.

Speaker Change: G&A general and administrative expenses were steady at five 9% upset S will maintain a high level of I T and cyber security investments combined with efficiency gains.

Speaker Change: Hey, guiding the restructuring costs for non boutiques and related projects. We continue to expect total charges of approximately $400 million and four about 75% to be noncash.

Speaker Change: The bulk of this charge came in the second quarter results was a pre tax charge of about $350 million of which 80% above noncash items.

Speaker Change: We incurred about $60 million of additional charges in the third quarter and expect about $20 million to $25 million for the fourth quarter. Some remaining charges may come in the first half of 'twenty five as we complete the program.

Speaker Change: As for adjusted EPS reported results for 57 cents, while results at Cod snack exchange rates were 58 cents and three cents ahead of the outlook for at least 55 sets.

Roland Sackers: This confirmation of solid profitable growth enabled us to raise the full-year outlook by $0.03. The adjusted tax rate was 20% and above the estimate for about 19%, while the average number of diluted shares at $224 million was in line with our expectations. Turning to cash flow. We are pleased to see continued improvements in our results for the Q3. Operating cash flow for the first nine months of the year increased by an impressive 56% to $482 million over the same period in 2023. This is even after absorbing payments related to restructuring decisions. We have seen a steady improvement in working capital, which has decreased by about $198 million and stood at 6.4% of total assets at the end of the Q3, and down from 9.8% at the end of 2023.

Speaker Change: This confirmation of solid profitable growth and enabled us to raise the full year outlook by three cents.

Speaker Change: The adjusted tax rate was 20% and adopt the estimate for about 19%, whereas the average number of diluted shares at 224 billion was in line with our expectations.

Speaker Change: Turning to cash flow, we are pleased to see continued improvements in our results for the third quarter.

Speaker Change: Operating cash flow for the first nine months of the year increased by an impressive 56% to $482 million or the same period in 23 does this even after absorbing payments related to restructuring decisions we.

Speaker Change: We have seen a steady improvement in working capital, which has decreased by about $198 million and stood at six 4% of total that's it that's the end of the third quarter of died down for night, but 8% at the end of 'twenty three.

Roland Sackers: Accounts receivable have also fallen by about 10% since the end of 2023 and stood at 55.5 days at the end of September. Another contributing factor to the improved cash flow was a reduction this year in inventories by about $80 million since the end of 2023. Free cash flow for the first nine months of 2024 grew at a faster pace than operating cash flow, rising 73% to $364 million compared to the same period in 2023. This is particularly impressive given the increase in CapEx levels. This primarily went towards software development and in particular, the upgrade of our SAP system. We are on track for a solid cash flow trend in 2024, and even after including the charges related to the NeuMoDx decision.

Speaker Change: Accounts receivable have also fallen by about 10% since the end of 'twenty three it stood at $55 five days at the end of September.

Speaker Change: And that is a contributing factor to the improved cash flow vasa deduction. This year inventories by about $80 million since the end of 'twenty three free cash flow for the first nine months of 'twenty four grew at a faster pace said operating cash flow was <unk> 73 per cent to see about 64 million.

Speaker Change: Compared to the same period in 'twenty three.

Speaker Change: This particular impressive given the increasing capex levels.

Speaker Change: This primarily went to what software development and in particular, the upgrade of our ERP system.

Speaker Change: So we are on track for solid cash flow trends in 'twenty, four and even after including the charges related to the normal X decision.

Speaker Change: As for financing, we raised about $5 billion in September who's the issuance of a new net share settled convertible bond due in 'twenty, one with a two 5% coupon.

Roland Sackers: As for our financing, we raised about $500 million in September through the issuance of a new net share convertible bond due in 2031 with a 2.5% coupon. This successful offering received robust demand, reflecting investor confidence in our future growth prospects. The proceeds will be used to support our strategic growth initiatives and also to repay upcoming debt obligations. We have $500 million in convertible notes reaching maturity in Q1. We also expect to repay another $500 million in 2025 due to an early redemption option for convertible notes reaching maturity in 2027. With that, I would now like to hand back to Thierry.

Speaker Change: This successful offering received robust demand, reflecting investor confidence in our future growth prospects.

Speaker Change: Proceeds will be used to support our strategic growth initiatives at <unk>.

Speaker Change: Also to repay upcoming debt obligations.

Speaker Change: We have $5 billion in convertible notes, reaching maturity in the fourth quarter. We also expect to repeat another $5 billion and 25 due to an early redemption option for convertible notes, reaching maturity in 27, we said I would now like to hand back to tell you.

Speaker Change: Thanks, a lot for all and now let me take a moment to discuss with all of you are more progress our teams have made across our portfolio.

Thierry Bernard: Thanks a lot, Roland. Now let me take a moment to discuss with all of you more progress our teams have made across our world portfolio. First on Sample Technologies, and Roland alluded to it. We are expanding our portfolio of state-of-the-art applications in many areas, and this includes liquid biopsy. QIAGEN is a top provider of liquid biopsy samples prep solutions, and we are the only provider of all three key technologies: circulating tumor DNA, cell-free DNA, and exosomes. Our portfolio has been invaluable for many years to customers. At the start, to those in research studying various types of cancer and other diseases, and increasingly today, to commercial labs across the world offering liquid biopsy tests. Those labs are many of the major names that you would recognize as the leaders in this field.

Speaker Change: First on the sample technology in auto are you did you did and we are expanding our portfolio of state of your off application as many areas and this includes liquid biopsy.

Speaker Change: Okay, Yeah, Jamie as a top provider of liquid biopsy sample prep solutions and we are the only provider of all three key technologies.

Speaker Change: She had <unk> two more G&A.

Speaker Change: Cell free DNA and Exosomes.

Speaker Change: Our portfolio has been invaluable for many years to customers.

Speaker Change: At the stop two doors in research studying various type of cancer.

Speaker Change: And those are diseases and increasingly to date to commercial labs across the world offering liquid biopsy test.

Speaker Change: Those labs are many of the major names that you would recognize as the leaders in this field.

Thierry Bernard: We continue to solidify our leadership in this area by expanding our portfolio for urine samples and moving beyond the initial focus on blood samples. In our pre-analytics joint venture with Becton Dickinson, we recently launched the PAXgene Urine Liquid Biopsy Set. This new kit addresses critical needs on how to collect, process, and store DNA from urine samples for analysis. Key applications in both research and clinical healthcare include detection of markers for minimal residual disease analysis to monitor treatment response and even to identify therapeutic targets. We continue to innovate in this area to help advance the use of liquid biopsy, in particular to improve precision medicine and make it easier to tailor and monitor treatments to get better outcomes for patients around the world.

Speaker Change: We continue to solidify our leadership in this area by expanding our portfolio for urine samples and moving beyond the initial focus on blood centers.

Speaker Change: In our pre analytics joint venture with Becton Dickinson, We recently launched the Pax Jean urine liquid biopsy set.

Speaker Change: These new address these critical needs on the how to collect process and store DNA from urine samples for analysis.

Speaker Change: Key applications in both research and clinical healthcare include detection of markers for minimal residual disease analysis to monitor treatment response, and even to identified few rapidly targets.

Speaker Change: We continue to innovate in this area to help advance the use of liquid biopsy in particular to improve precision medicine and make it easier to tailor and monitor treatment to get better outcomes for patients around the world.

Speaker Change: If we move now to quantify them.

Thierry Bernard: If we move now to QuantiFERON, our test for latent TB detection continues to be a key contributor in the global fight against tuberculosis. Tuberculosis is on the rise, and once again has overtaken COVID-19 as the world's leading infectious disease killer. This is according to the WHO Global Tuberculosis Report for 2024 that was just released a few weeks ago in October. The report showed 8.2 million people were newly diagnosed with TB, tuberculosis, in 2023, and this represents the highest number of tuberculosis cases recorded by the WHO since it began monitoring in 1995. It also marked a significant increase from the 7.5 million new TB cases reported the year before in 2022. This shows once again the impact of limited testing during the pandemic.

Speaker Change: Our test for latent TB detection continues to be a key contributor in the global fight against you broke your losses.

Speaker Change: She broke you know she is on the rise.

Speaker Change: And once again.

Speaker Change: As overtaken COVID-19, as the world's leading infectious disease killer.

Speaker Change: This is according to the WHI Global tuberculosis report for 2024 that was just released a few weeks ago in October.

Speaker Change: The report showed 8.2 million people with newly diagnosed with TB tuberculosis. In Q4, then in 'twenty three and these represent the highest number of tuberculosis cases recorded by the WH shows since it began monitoring in 1995.

Speaker Change: It also marks a significant increase from the 7.5 million New TB cases reported to you before in 2022.

Speaker Change: This shows once again.

Speaker Change: The impact of limited testing during the pandemic.

Speaker Change: We live our rates once again, I wouldnt knowledge and resources to meet the resilience of the worlds most deadly infectious disease by hosting the global GB Summit in London in October our fifth annual event with invited expense, reaching more than 10000.

Thierry Bernard: We leveraged once again our knowledge and resources amid the resurgence of the world's most deadly infectious disease by hosting the Global TB Summit in London in October, our fifth annual event, with invited experts reaching more than 10,000 participants across a hybrid conference of in-person and virtual sessions. Latent TB detection is essential. One in four people worldwide is estimated to be positive, one in four, and create the new waves of active TB cases. Given that skin tests still make up well over 50% of the market for annual latent TB testing globally or in the US or Europe, the growth potential for QuantiFERON remains very substantial. To further accelerate conversion from skin tests to our QuantiFERON latent TB test, we are already involved in national screening programs in more than 15 countries around the world.

Speaker Change: Participants across your hybrid conference of in person and virtual sessions.

Speaker Change: Latent TB detection is essential.

Speaker Change: One in four people worldwide is estimated to be positive one in four and create the new waves of active TB cases.

Speaker Change: Given that skin test didn't make up well over 50% of the market for annual latent TB testing.

Speaker Change: Globally or in the U S.

Speaker Change: For Europe, the growth potential for quantity of all remains very substantial.

Speaker Change: To further accelerate conversion from skin test to our quantity latent TB test.

Speaker Change: We are already involved in national screening programs in more than 15 countries around the world.

Speaker Change: We are now clearly on track two.

Thierry Bernard: We are now clearly on track to exceed our target for at least $450 million of sales in 2024, and further conversion from the skin test as well as overall market growth is set to drive midterm growth. We are also creating a new relay of growth with the QuantiFERON test for detection of Lyme disease with our partner DiaSorin. We are awaiting a decision from the FDA and getting ready for the 2025 testing season. Across the QIAGEN portfolio, you can see that our company has never been better positioned, and we are working to strengthen our competitive edge. Now back to Roland with the details on our outlook for the year.

Speaker Change: We exceeded our target for at least $450 million upsells into further in 'twenty four.

Speaker Change: And for the conversion from the skin test.

Speaker Change: As overall market growth is set to drive midterm growth.

Speaker Change: We are also creating a new relay of growth with the quantity of tests for the detection of Lyme disease with our partner there sorry.

Speaker Change: We are awaiting a decision from G H D a.

Speaker Change: And getting ready for the 2025 testing season.

Speaker Change: So across the Qiagen portfolio, you can see that our company has never been positioned better positioned than we are working to strengthen our competitive edge and now were back to our long read the details on our outlook for the year.

Speaker Change: Thank you tell you.

Roland Sackers: Thank you, Thierry. Let me now provide more perspectives on our updated outlook for 2024 and also on the Q4. We have reaffirmed our outlook for full-year net sales of at least $1.985 billion at CER, taking into consideration the solid growth in our base business and reduced sales from NeuMoDx after the decision to discontinue the system. For the Q4, we have set an outlook for a net sales of at least $520 million at CER, an increase of about 2% CER from $509 million in Q1 2023. This includes a headwind of about 1 percentage point from the NeuMoDx decision. In effect, underlying 3% CER growth over the Q4 2023, leaving the H2 2024 with a growth rate of 4% to 5%.

Speaker Change: Let me now provide more perspectives on our updated outlook for 'twenty four it also in the fourth quarter.

Speaker Change: We have reaffirmed the outlook for full year net sales of at least 1.985 billion U S dollars at sea all taken into consideration as a solid Crawford our base business and reduced sales for Nordics. After the decision to discontinue the system.

Speaker Change: For the fourth quarter, we have set an outlook for net sales of at least $520 million at sea up an increase of about 2% CR from $509 billion in the first quarter of 'twenty slate threat to three <unk>.

Speaker Change: This includes a headwind of about one percentage point from the northern border ex decision.

Speaker Change: So in effect under lags he percent C. I go for the first quarter of 'twenty three leaving the second half of 'twenty, four with a growth rate of 4% to 5%.

Speaker Change: This confirms our expected acceleration in year on year growth rates for the second half of 'twenty four compared to results in the first half of this year.

Roland Sackers: This confirms our expected acceleration in year-on-year growth rates for H2 2024 compared to results in H1 of this year. On adjusted EPS, our updated outlook for the year is for at least $2.19 at CER and another upgrade based on the significant improvements in profitability. Remember that this compares to an outlook at the start of the year for adjusted EPS for at least $2.10 CER as we double down on our commitment to solid profitable growth. Adjusted EPS for Q4 are expected to be at least $0.60 per share, also at CER, compared to $0.55 in Q4 2023, another good improvement. As for the impact on currencies, based on recent movements, we do not expect any change from what we announced at the end of Q2.

Speaker Change: And adjusted earnings per share our updated outlook for the year is for at least $2.19 at CER and another upgrade based on the significant improvements in profitability.

Speaker Change: Remember that this compares to an outlook for this it's good outlook at the start of the year for adjusted EPS for at least $2.10 C. A S V double down on our commitment to solid profitable growth.

Speaker Change: Adjusted earnings per share for the fourth quarter I expect it to be at least 60 cents per share also at CER compared to 55 cents in the fourth quarter of 'twenty, three so and that was a good improvement.

Speaker Change: As far as the impact on currencies based on recent movements, we do not expect any change from what we announced at the end of the second quarter, we are expecting that Russ impact on full year net sales of about one percentage pod and then the adverse impact of about two cents per share and adjusted EPS results.

Roland Sackers: We are expecting an adverse impact on full-year net sales of about 1 percentage point and an adverse impact of about $0.02 per share on adjusted EPS results. I would like to now hand back to Thierry.

Speaker Change: Like to now adds back to treat.

Thierry Bernard: Thanks a lot, Roland. We are coming to the end of our call, so let me summarize our key messages for today and then we'll move into the Q&A session. First, we had a very solid performance for Q3 that exceeded our outlook on net sales and also on adjusted earnings. Despite the quite challenging macro environment and cautious spending among customers on instruments, our heavily recurring revenues at over 85% of sales continues to deliver solid growth. We were especially pleased with the performance of our Sample Technologies, Diagnostic Solutions, and PCR product groups. We also saw the innovation power and commitment to efficiency in our teams through a steady number of new product launches with an improved adjusted operating income margin at 29.6%.

Speaker Change: Thanks, a lot Carlo we are coming to the end of our call. So let me summarize our key messages for today and then we'll move into the Q&A Fisher.

Speaker Change: First we had a very solid performance for the third quarter that exceeded our outlook on net sales and also on adjusted earnings.

Speaker Change: Despite the quite challenging macro environment and cautious spending among customers on instruments, our heavily recurring revenues at over 80, 585% of sales continues to deliver solid growth.

Speaker Change: We were especially pleased with the performance of our sample technologies diagnostic solution and PCR product groups.

Speaker Change: We also saw the innovation power and commitment to efficiency and our teams through a steady number of new product launches with an improved adjusted operating income margin at 29, 6%.

Speaker Change: It is fair to say that <unk> is delivering on its targets on sales is delivering on profitability delivering on cash flow generation and on product development.

Thierry Bernard: It is fair to say that QIAGEN is delivering on its target on sales, is delivering on profitability, delivering on cash flow generation, and on product development. This makes us confident in exceeding the updated outlook for 2024 and positioning our company for more solid profitable growth in 2025 and the years ahead. With that, I'd now like to hand back to John and the operator for the Q&A session. Thanks a lot.

Speaker Change: This makes us confident in achieving the updated outlook for 'twenty, four and positioning our company for more solid profitable growth in 'twenty, five and the year's height.

Speaker Change: And with that I'd now like to hand back to join in the operator for the Q&A session. Thanks a lot.

Speaker Change: Yeah.

Speaker Change: Thank you ladies and gentlemen at this time, we will begin the question and answer session anyone who wishes to ask a question press star followed by one on your Touchtone telephone.

Operator 2: Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on your touchtone telephone. If you wish to withdraw your question, you may press star followed by two. To ensure that we can accommodate as many people as possible, please limit yourself to only one question and if necessary, one follow-up. Your microphone will also be muted after finish asking the questions. Anyone who has a question may press star followed by one at this time. One moment for the first question.We'll go first to Patrick Donnelly with Citi.

Speaker Change: Wish to withdraw your question you May press star followed by Q.

Speaker Change: To ensure that we can accommodate as many people as possible. Please limit yourself to only one question and if necessary one follow up your microphone will also be muted after finishing after finish asking the questions.

Speaker Change: Anyone who has a question May press star followed by one at this time one moment for the first question.

Speaker Change: Well go first to Patrick Donnelly with Citi.

Patrick Donnelly: Thanks for taking the questions CRE, maybe on quantifier on another nice double digit growth quarter here.

Patrick Donnelly: Thanks for taking the questions. Thierry, maybe on QuantiFERON, another nice double-digit growth quarter here. Can you just talk about, I guess, the drivers, the sustainability of this type of growth going forward? The competitive landscape certainly seems to have quieted down from our perspective. Obviously, there's some noise over the last few quarters, but no impact, clearly, to your business. Maybe just talk about what you're seeing, and again, the growth going forward, and then I have a follow-up after that.

Speaker Change: Can you just talk about I guess the drivers the sustainability of this type of growth.

Patrick Donnelly: Going forward the competitive landscape certainly seems to have quieted down from our perspective, obviously there was some noise over the last few quarters, but no impact clearly your business. So maybe just talk about what youre seeing and again the growth going forward and then I have a follow up after that.

Speaker Change: Thank you Patrick Yes, you have seen a it was a double digit and they're also highlighting a it was a quarter of the six quarter.

Thierry Bernard: Thank you, Patrick. Yes, you have seen another double-digit and also highlighting another quarter, the 6th quarter above $100 million revenues. Main driver for us remains the same. We are very coherent. We have a fantastic potential to convert skin test. It's still more than 50% of this market. It's an antiquated technology than QuantiFERON in its blood format offers values to our customers. Second, the partnership with DiaSorin gives values to customers as well. We continue to convert traditional QuantiFERON customer to DiaSorin, but we also are adding QuantiFERON test to the DiaSorin install base. It's a successful partnership, and anytime we convert the customers, we can do it at a premium price. Third, because of many years of publication, proof of our technical efficiency, medical educations, we are converting more and more countries to have latent TB testing in their guidelines against tuberculosis.

Speaker Change: Over $100 million revenues.

Speaker Change: Main driver for US remains the same we are very coherent we have a fantastic potential to convert skin test, it's still more than 50% of this market. It's in.

Speaker Change: Integrated technologies and quantify only needs blood format offers value to our customers sicker.

Speaker Change: Partnership with <unk> gives value to customers as well, we continue to convert traditional quantity at one customer to digest reading, but we also.

Speaker Change: Alright, quantum if you're on pace to do that you sold and installed base. It's a successful partnership and anytime we convert the customers. We can do it at a premium price.

Speaker Change: Food because of many years of publication.

Speaker Change: Proof of our technical.

Speaker Change: Our efficiency.

Speaker Change: Medical indications, we are converting more and more countries.

Speaker Change: You have a latent TB testing in their guidelines against Jubail Ketosis I would highlight that Patrick has the three key drivers.

Thierry Bernard: I would highlight that, Patrick, as the three key drivers. We believe that it's a sustainable growth ahead of us, you have seen in our capital market day that we announced an objective of USD 600 million revenues for QuantiFERON by the year 2028, which gives us a projected 6% to 7% CAGR for the coming years.

Speaker Change: We believe that you'd sort of sustainable growth ahead of us, but you have seen in our capital market day.

Speaker Change: That we are announcing an objective of 600 million revenues for quantity.

Speaker Change: D. A year of 2028, which gives us a projected 6% to 7% CAGR for the coming years.

Speaker Change: Okay.

Patrick Donnelly: Yeah. No, that's helpful. I appreciate that, Thierry. Maybe just as we're kind of turning eyes towards 2025 here, I know the closing remarks there, you kind of highlighted it should be another healthy year. Can you just talk about the moving pieces both on the revenue and then maybe Roland can chime in on the margin piece, high level as we think about next year. I mean, any reason why you guys wouldn't be kind of in that high end of the mid-single digit type range next year on the revenues? Any headwinds we should be aware of? The same question on the margins for Roland. Thank you, guys.

Speaker Change: Yes, no. That's helpful. I appreciate that Gerry and then maybe just you know as we're kind of turning eyes towards twenty-five here I know, it's a closing remarks, there you kind of highlighted it should be another healthy year.

Speaker Change: Can you just talk about the moving pieces both on the revenue and then maybe Roland can chime in on the margin piece high level as we think about next year I mean, any reason why you guys wouldn't be kind of in that high end of the mid single digit type range next year on the revenues any any headwinds we should be aware of it and then the same question on the margins for Roland. Thank you guys.

Speaker Change: Thank you Patrick and are starting with the top line and then also on the margin expansion.

Thierry Bernard: Thank you, Patrick. Starting with the top line and then Roland on the margin expansion. If you look at the paradigm of our growth pattern in 2024, Patrick, you see that acceleration and we forecasted it. We disclosed that the acceleration in H2. If you look at the overall H2, we're going to be between 4% to 5% growth. We have momentum in some portfolios. QIAstat, as we highlighted. QuantiFERON. Sample Tech is back on growth. We have, as Roland said, new instrument coming up in 2025 and then in 2026. Digital PCR, we have a very differentiated solutions, and consumables are growing very well. We had in the last 3 years the fastest growth of install base in Digital PCR. Roland said that our QDI bioinformatics business was going to a transition, but the fundamental of the business are very solid.

Speaker Change: If you look at our at our the paradigm of our growth pattern in 'twenty four batteries, you'll see that our acceleration and we forecasted it we disclosed that the acceleration in H. Two weeks you look at the overall H two we're going to be between 45% growth.

Speaker Change: We have momentum in some portfolios that we highlighted.

Speaker Change: Quantum field.

Speaker Change: Simple take ease back on growth and we have as what I'll say new instrument go you can go in 'twenty five and then in 'twenty six.

Speaker Change: Digital PCR, we have a very differentiated solutions.

Speaker Change: And consumables are growing very well we had had in the last three years the fastest growth of installed base in digital Pcr.

Speaker Change: But who don't say that we're acutely I bet, you informatic business was going through a transition, but the fundamental of the business are very solid more N. G. Yes, 15, more oncology testing are calling for more bio informatic analysis, So I'm trying to express that they do.

Thierry Bernard: More NGS testing, more oncology testing are calling for more bioinformatic analysis. I'm trying to express that the growth pillars of QIAGEN are leveraging good market opportunities, differentiations, and features or menu expansion. With that in mind, I believe that with the performance of 4% to 5% growth in H2, we are well on track to continue on a very decent growth for 2025 and to achieve our 7% CAGR 2024 to 2028, as said in New York in June 2024. Roland, for the margin expansion.

Speaker Change: P J.

Speaker Change: Great.

Speaker Change: Our leveraging good market opportunities differentiations.

Speaker Change: And features all menu expenditure.

Speaker Change: With that in mind, I believe that with the performance of 45% growth in niche too we are well on track to continue on a very.

Speaker Change: <unk> grew 425 and to achieve our 7% CAGR 24 to 28 I'd say in <unk>.

Speaker Change: In New York in June 2024.

Speaker Change: We're known for the margin expansion.

Roland Sackers: Sure. Hello, Patrick. No, I just can continue what Thierry just said. While I do think we have clearly seen so far a nice acceleration also on profitability into H2 compared to H1. I clearly do believe that it's going to continue also in Q4. We will see clearly higher margins in Q4 than compared to Q3. We are on track to what we said before to make and deliver at least a 28.5% for the full year 2024. I do think it's also important to understand the composition of that, because as you know, an important change for us was the discontinuation of NeuMoDx.

Speaker Change: Sure I'd had a patrick.

Speaker Change: No.

Speaker Change: S can continue or what you just said, but I do think we have clearly seen so far and nice acceleration also in profitability in the second half of the year compared to the first half of the year.

Speaker Change: And I clearly do believe that it's going to continue all to the fourth quarter, we will see clearly higher margins in the fourth quarter than compared to the third quarter. We are on track to what we said before to make and deliver at least 28, 5% for the full year.

Speaker Change: 24, but I do think it's also important to understand the composition upset because as you know an important shift for US was the discontinuation of Nordics I do think it is very important to understand that's a majority of the impact on margin improve from that is not in the numbers of 24.

Roland Sackers: I do think it is very important to understand that the majority of the impact on margin improvement from that is not in the numbers in 2024. It will come over the course of H1 of the year. There's, I would say, a certain amount, might be one-third, which is clearly related to R&D impacts, which is now moving into the numbers this year. All the other topics will be rather built into the numbers or helping the numbers, if you like, for 2025, because, as you know, we're still producing, helping our customers and so on. There's a lot of things which we still have to eat, and that is going to continue, most likely by middle of next year, we are done this.

Speaker Change: It's sort of come in over the course of soft first half of year is a I would say, there's certain aboard but you've answered.

Speaker Change: Which is clearly led to idea impacts which is now are moving into the numbers this year or the other topics will be well just built into the numbers a help in the numbers. If you like for 425, because I said no they're still producing are helping our customers and so on so there's a lot of.

Speaker Change: Things, which we still have to eat and there is going to continue.

Speaker Change: Most likely by mid of next year, we are aware that this that in.

Thierry Bernard: In addition to that, we continue what we started with Tahir now a couple of quarters ago, which is a continuous improvement, a QIA efficiency program. We clearly see that all across the company, opportunities to empower organizations to get more decentralized and therefore having quite a number of efficiency gains, which adding up. That is what is driving the margin improvement right now, but they're not stopping halfway, so I would also expect for next year a continuation of margin improvements.

Speaker Change: In addition to that we continue what we started Mr. You know a couple of quarters ago, which is a continuous improvement efficiency program and we clearly see that.

Speaker Change: All across the company.

Speaker Change: Opportunities to empower organizations to get more decentralized and therefore, having a quite a number of efficiency games, which adding up and that is what is driving that margin profile right now, but they're not stopping halfway so I would also expect for next year, a continuation of margin improvement.

Speaker Change: Thank you we'll take our next question from.

Operator 2: Thank you. We'll take our next question from Anastasios Moustakis with Berenberg.

Speaker Change: Minnesota.

Speaker Change: Aaron Berg.

Speaker Change: Hi, Thanks for taking my questions.

Anastasios Moustakis: Hi. Thanks for taking my questions. Firstly, could you give us a bit more color on the QIAstat placement since the GI panel launch and the mini panel launch? What share of these placements have been competitive? Was there an acceleration since last quarter? Could you also share what part of these placements were placed on reagent rental contracts? I have a follow-up. Thank you.

Speaker Change: Firstly could you give us a bit more color on the kind of stopped placements since the Gi panel launch under many kind of lunch.

Speaker Change: What share of these placements have been competitors was there an acceleration since last quarter.

Speaker Change: And could you also share what.

Speaker Change: Parts of these placements were placed on a reagent rental contracts and then I have a follow up thank you.

Speaker Change: Thanks for the question.

Thierry Bernard: Thanks for the question. First of all, the first thing I'd like to highlight is Q3 is a very good number, very good performance for QIAstat placement, more than 150 placement for the quarter. It's more than our competitors. The drivers, I wouldn't say it's specifically GI approval. What is very important to remember, the US is still the first market in the world and still growing for syndromic testing. Now in the US, QIAstat can offer the minimal menu to be competitive with customers, respiratory, GI, and meningitis. In addition to that, as you have seen, we are bringing a mini panel for respiratory in the US, and soon we will be bringing a mini panel for GI. We strengthen the momentum. Placement versus capital sales. This is a market where you should see between or across the region at 50/50%.

Speaker Change: So first of all the first thing I'd like to highlight is Q3 is a very good number a very good performance for cadence that's been placement more than a 150 placements for the quarter.

Speaker Change: It's more than our competitors.

Speaker Change: The drivers I wouldn't say each specific T. G. I your approval what is very important to remember.

Speaker Change: The U S is still the first markets in the world and still growing 14, Jeremy teaching and now in the U S carriers that can offer.

Speaker Change: Many more menu to be competitive with customers respiratory G I.

Speaker Change: And minions.

Speaker Change: In addition to that as you have seen we are bringing a mini panel for respiratory in the U S and soon we will be bringing.

Speaker Change: <unk> 40, I shall we create we strengthen the momentum.

Speaker Change: Yeah.

Speaker Change: Placement <unk>.

Speaker Change: Capital sales. This is a market where you should see between order across the region.

Speaker Change: Region at 50, 50%, 50% placement, 50% capital says, but the key message here is that we were already growing well, thanks to Europe and so most of the regions without some chaos that now we are even more competitive and entering 2025 more competitive for the U S D.

Thierry Bernard: 50% placement, 50% capital sales. The key message here is that we were already growing well thanks to Europe and some other regions. Without the US on QIAstat, now we are even more competitive and entering 2025, more competitive for the US. This is what makes us confident for this franchise to achieve the commitment we took to you in New York in June, which is a revenue of $200 million by 2028.

Speaker Change: Is what makes us confident for this franchise to achieve the commitment we took to you in New York in June which is our revenue of $200 million by 2028.

Anastasios Moustakis: Thanks, Thierry. A quick one on capital deployment. Is larger M&A still likely, as you were talking about earlier in the year or is there more of a bias towards buybacks?

Speaker Change: Thanks, Gary and the quick one on capital deployment.

Speaker Change: So.

Speaker Change: Is larger M&A they'll likely oh.

Speaker Change: As you were talking about earlier in the year or is there more of a bias towards buybacks.

Speaker Change: I mean, we are extremely active on both fronts you have seen us active on the buyback at the beginning of the year.

Thierry Bernard: We are extremely active on both fronts. You have seen us active on buyback at the beginning of the year. I think the main question for us is what is best for our shareholders at a given time. We have a very solid balance sheet. We have taken a commitment once again in New York of absent of significant M&A, a billion-dollar return to shareholders until 2028. We are still committed to achieve that. At the same time, QIAGEN is on the hunt for interesting value creation, accretive M&A to reinforce our portfolio. We see M&A as an option to increase the growth potential of our portfolio.

Speaker Change: I think the main question for US is what is best.

Speaker Change: Florida, where shareholders took even time.

Speaker Change: We have a very solid balance sheet.

Speaker Change: We have taken a commitment once again in.

Speaker Change: In New York.

Speaker Change: Absent of significant M&A.

Speaker Change: The billion dollar or return to shareholders.

Speaker Change: <unk> 2028, we are still committed to achieve that at the same time.

Speaker Change: Yeah, Jamie is on the hunt for.

Speaker Change: Interesting.

Speaker Change: Value creation.

Speaker Change: Accretive M&A to reinforce our portfolio and we see M&A as an option to increase the growth potential of our portfolio.

Speaker Change: Okay.

Speaker Change: Thank you we'll take our next question from Matt <unk> with Goldman Sachs.

Operator 2: Thank you. We'll take our next question from Matthew Sykes with Goldman Sachs.

Matthew Sykes: Hi, good morning. Thanks for taking my questions. Thierry, maybe one for you to start out, just high level. As you think about sort of the mix of growth that you've achieved over the past year, QuantiFERON's obviously been a significant driver. As you talked about sort of long-term normalization of that growth closer to six to seven, how are you think about the mix of portfolio to drive incremental growth as QuantiFERON normalizes a little bit? I'm assuming it's a combination of QIAstat, QIAcuity, and QDI, but I would just love to hear how comfortable you are with the portfolio mix to continue to drive that incremental growth if we get that normalization in QuantiFERON.

Speaker Change: Hi, Good morning, Thanks for taking my questions Terry maybe one for you to start out just high level.

Speaker Change: As you think about sort of the mix of growth that you've achieved over the past year quantify around obviously been a significant driver and as you talked about sort of the long term normalization of that growth closer to 6% to seven.

Speaker Change: How do you think about the mix of the portfolio to drive incremental growth as quite a fear on normalizes, a little bit I'm, assuming it's a combination of Kai stat.

Speaker Change: <unk> and <unk>, but I would just love to hear how comfortable you are with the portfolio mix to continue to drive that incremental growth, if we get that normalization and quantify Iran.

Speaker Change: Yes, you are perfectly right and thanks for the question and I would refer you to what we presented in New York in June.

Thierry Bernard: Yes, you are perfectly right. Thanks for the question. I would refer you to what we presented in New York in June. We continue to believe in focusing in growth opportunities where we believe we can either reinforce the leadership or take substantial market shares. Reinforce the leadership, it is Sample Technologies and QuantiFERON. Take meaningful market share. It is digital PCR, QIAstat syndromic testing, and QIAGEN Digital Insights, our bioinformatics portfolio. We gave you very precise data back in June. Sample Technologies, we believe we can achieve above market growth 2% to 3% CAGR in the coming years, because our strategy to invest in automation has paid off until now. Roland alluded to EZ2 success in Q3, to QIAcube Connect success in Q3. We are going to launch three new instruments between 2025 and 2026.

Speaker Change: We continue to believe.

Speaker Change: In focusing.

Speaker Change: And focusing in.

Speaker Change: Growth opportunities.

Speaker Change: Where we believe we can be there.

Speaker Change: Reinforce our leadership.

Speaker Change: Or take substantial.

Speaker Change: Market shares.

Speaker Change: Reinforce <unk> leadership.

Speaker Change: It's.

Speaker Change: Simple things.

Speaker Change: And quantify them.

Speaker Change: Take meaningful market share.

Speaker Change: It is digital PCR carrier start Syndromic testing.

Speaker Change: Qiagen digital inside our bioinformatics portfolio.

Speaker Change: And we gave you very <unk>.

Speaker Change: Precise data.

Speaker Change: Back in June.

Speaker Change: <unk>.

Speaker Change: We believe we can achieve.

Speaker Change: We both market growth to two 3% CAGR in the coming years, because our strategy to invest in automation as paid off now.

Speaker Change: So all in all you did too easy due to success in Q3 to get your acute <unk>.

Speaker Change: And we are going to launch.

Speaker Change: Pre new instruments.

Speaker Change: Between 2025 and 26.

Speaker Change: Currently we have explained the driver behind our expectation.

Thierry Bernard: QuantiFERON, we have explained the driver behind our expectation, conversion of skin test, and we believe that by 2025 we will have Lyme approved together with our partner in the US. It's a differentiated assay. The success of Lyme will be conditioned by the success on the US market. QIAstat, we said we gave a target of 6% to 7% to achieve $600 million for QuantiFERON by 2028. We said we believe we have a very leadership solution for digital PCR, strong growth in install base, movement from life science to clinical diagnostic. We are going to invest in more R&D, in more people on the field. We gave a target of $250 million by 2028. It's a significant double-digit growth. The market is growing. The power of digital PCR versus qPCR or NGS is becoming more and more recognized.

Speaker Change: Conversion of skin test and we.

Speaker Change: Believe.

Speaker Change: That by 2025, we we don't have line of approved together with our partner in the U S. It's a different entity is I'll say.

Speaker Change: The success over time.

Speaker Change: We'll be currency condition by the success on the U S market.

Speaker Change: Okay, yes that.

Speaker Change: And we said, we gave a target of 6% to 7% to achieve 600 million.

Speaker Change: For a coffee if you want by 2028.

Speaker Change: Then we said.

Speaker Change: We believe we have a very leadership.

Speaker Change: Solution for digital PCR.

Speaker Change: Strong growth in installed base.

Speaker Change: Movement from life science to clinical diagnostic.

Speaker Change: We are going to invest in more and more people on the field, we gave a target.

Speaker Change: Of $250 million by 2028.

Speaker Change: Significant double digit growth, but the market is growing the power of digital PCR Vantages, Q PCR or engineers is becoming more and more recognized.

Speaker Change: Okay, yes that as I just said.

Thierry Bernard: QIAstat, as I just said, we have a very precise plan for menu expansion. If you remember, direct identification of positive blood culture next year. Complicated UTI, a very differentiated assays because none of the competitors have it in their portfolio or their plan. Pneumonia. In addition to that, our high-throughput system, QIAstat-Dx Rise, will be approved in the US. That justify our confidence to grow double digit and achieve $200 million by 2028, which proves what we said for the last three years, we will be a very solid number two in syndromic testing. QDI. Roland explained that we are transitioning our business. We follow the needs of our customers toward a more SaaS business. That doesn't change the interest of the market.

Speaker Change: We have a very precise plan for menu extension if you remember.

Speaker Change: Direct identification of positive blood culture next year.

Speaker Change: Complicated UTI very different differentiated assays, because none of the competitors has it in their portfolio or their plan.

Speaker Change: And pneumonia.

Speaker Change: In addition to that our high throughput system chaos that rise.

Speaker Change: We'd be approved in the U S.

Speaker Change: That justify our confidence to grow double digit and achieve $200 million by 2028, which proves.

Speaker Change: What we said for the last three years, we will be a very solid number two.

Speaker Change: In Syndromic testing.

Speaker Change: Judy.

Speaker Change: Oh long explained that we are transitioning our business, we follow the needs of our customers towards the more SaaS business that doesn't change gene traits of the market.

Speaker Change: So investing for a double digit growth on Q D.

Thierry Bernard: Investing for a double-digit growth on QDI and reaching $200 million by 2028 is still what we consider a realistic ambition, of course, but realistic objective. Those will be the mix of our growth. That doesn't mean that other parts of our portfolio will not grow. We are still very confident in our positioning in next-generation sequencing chemistry. We are still very confident in our positioning in forensic activities. This is how we see the coming four years and that starting with 2025.

Speaker Change: And reaching $200 million.

Speaker Change: By 2028 is still what we consider a realistic ambitions of course, but realistic objective dose will be the mix of our growth that doesn't mean that also a part of our portfolio with not grow we are still very confident in our position in next generation sequencing chemistry.

Speaker Change: We are still very confident in our positioning in forensic activities.

Speaker Change: And this is how we see the coming four years and starting with 25.

Speaker Change: Okay. Thanks for that color is really helpful and then.

Matthew Sykes: Great. Thanks for that color. Really helpful. Then Roland, just on giving your operating margin performance so far this year, I realize you laid out the guide in June of greater than 31% by 2028. Probably too early to revisit that. Just want to understand sort of the progress you've made, probably above your expectations. How are you thinking about that 2028 operating margin target from here off of this base as we end 2024?

Speaker Change: And just on given your operating margin performance so far this year.

Speaker Change: Realize you laid out the guide and in June of greater than 31% by 2028.

Speaker Change: Probably too early to revisit that but just wanted to understand sort of the progress you've made probably.

Speaker Change: Above your expectations. How are you thinking about that 2028 more operating margin target from here. After this space as we added 24.

Speaker Change: Yeah.

Speaker Change: Yeah, I know, it's a very fair question and I would like.

Roland Sackers: Yeah, no, it's a very fair question, and I would argue and agree with what you just said that we clearly made good progression and I do think, and I shared it before that I also see and we at QIAGEN see that we have a high confidence that the same is going to happen March 2025. I wouldn't be surprised at that at some point in time we have to revisit that target in a positive way. As you said, also it's way too early.

Speaker Change: I agree with what you just said that we clearly made good progress in and do synchronous. She had it before that I also see a and we had cash and see that we have a high confidence that the same is going to have much in 'twenty five.

Speaker Change: So I wouldn't be surprised at that at some point of time, we have to revisit that target in a positive way, but as you said also it's way too early.

Speaker Change: Thank you we'll take our next question from Doug Schenkel with Wolfe Research.

Operator 2: Thank you. We'll take our next question from Doug Schenkel with Wolfe Research.

Speaker Change: Hey, guys good afternoon.

Doug Schenkel: Hey, guys. Good afternoon. Your stock's been stuck in a range for years. You've been underperforming the group and the market for a while. You're clearly not being rewarded for increasingly solid execution. This was a good quarter, and it's not the first one this year. With that in mind and keeping in mind the stock trades at a material discount to probably anything I can possibly see you acquiring, I know you've said you're going to return $1 billion to shareholders by 2028. We're aware of what you said at the Capital Markets Day and again, what you're saying today. I guess my question is why not get going now? What are you waiting for?

Speaker Change: So.

Speaker Change: Your stock's been stuck in a range for years.

Speaker Change: You've been underperforming the group in the market for a while youre clearly not being rewarded for increasingly solid execution. This was a good quarter.

Speaker Change: And it's not the first one this year.

Speaker Change: So with that in mind and keeping in mind the stock trades at a material discount to probably anything I can't possibly see you acquiring.

Speaker Change: I know you said youre going to return $1 billion to shareholders by 2028.

Speaker Change: We're aware of what you said at the capital markets day, and again, what Youre, saying today I.

Speaker Change: I guess my question is like why not get going now like what are you waiting for if you believe in your L. RP if you remain.

Doug Schenkel: If you believe in your LRP, if you remain confident that competitive concerns are really just noise, and it sure seems like you do, why not bet on yourself and get more aggressive with the buyback as quickly as possible at this valuation?

Speaker Change: Confident that competitive concerns or really just noise and it sure seems like you do why not bet on yourself and get more aggressive with the buyback as quickly as possible at this valuation.

Speaker Change: Doug It's an interesting question and we can take it the bulk of this corridor.

Thierry Bernard: Doug, it's an interesting question, and we can take it both of us, Roland and I. We never said that we wouldn't. We clearly signaled in New York that another one could come quite quickly, 2025. Once again, it's always a question of the right moment and the best value creation. On the material discount and your first comment, I would just say, obviously, we look at the share price. I remain convinced that continuing to be extremely humble and executing quarter after quarter will pay off, demonstrating that the value of our portfolio is solid. It's about execution and delivering not only on the top line but also on the operational efficiency, and then it will pay off. That's how I could address your question. Roland, you might want to add something here.

Speaker Change: We never said that we don't we.

Speaker Change: We clearly see NOLA.

Speaker Change: Signaled in New York that who knows that one could come quite quickly.

Speaker Change: 25, once again, it's always a question of the right moment and debased value creation.

Speaker Change: On the material discount on your first comment I would just say.

Speaker Change: Obviously, we look at the share price.

Speaker Change: I remain convinced that.

Speaker Change: Continuing to be extremely hungry and executing quarter after quarter will pay off demand.

Speaker Change: Demonstrating that the.

Speaker Change: The value of our portfolio is solid so it's about execution and delivering not only on the top line, but also on the operational efficiency and then it will pay off.

Speaker Change: That's how I could address your question, but or you might want to add something here.

Speaker Change: Yeah.

Speaker Change: Yes, I agree that no again I would say we are very consistent with a.

Roland Sackers: Yes, thank you, Greg. No, again, I would say we are very consistent with our share buyback policy since 2012, where we started, and as you know, typically we started with $100 million incrementals per year. We just more or less, the last two years, stepped it up now to $300 million incrementals. You know that we have another $300 million incremental approved. I would say there's opportunities for us, and I would say it's also fair what you said, given also our cash flow, we have clearly opportunity over time to step that up. It's a fair question and if we continue that way, it's an opportunity.

Speaker Change: Share buyback policy since 2012, where we started.

Speaker Change: No.

Speaker Change: We started with 100 million incremental per year, we just more or less as the last two years stepped it up now to C. N a million dollar Incrementals and you know that you have another scan a million incremental approved so I would say there's opportunities for us and I would say it's also fair what you said given all that's all our cash or cash flow, we have clearly opportune.

Speaker Change: So over time to step that up so.

Speaker Change: It's a fair question and it.

Speaker Change: If you continue that way, it's an opportunity.

Speaker Change: Okay I.

Doug Schenkel: Okay. Thank you, guys. Appreciate that. Kind of building on the Matt Sykes question about OpEx. I won't roll through every variable in the equation, but it was a good margin quarter. You got NeuMoDx rolling off, which will be really margin accretive. You talked a lot about the levers pursuant to process optimization. Some of this is just we're not going to be back to normal next year, but we're going to be a lot closer to normal than we've been for a while. Recognizing you don't want to revisit the multi-year targets, just thinking about those levers and just kind of the math and how lean things have got relatively speaking over the last couple of years from an OpEx standpoint.

Speaker Change: Appreciate that and then.

Speaker Change: Building out a math question about Opex.

Speaker Change: Opex.

Speaker Change: Yeah.

Speaker Change: I won't roll through every year.

Speaker Change: Variable in the equation, but you know it was a good margin quarter, you got new mode Ox rolling off which will be really margin accretive.

Speaker Change: You've talked a lot about the levers.

Speaker Change: Process optimization.

Speaker Change: And then some of this is just you know we're not going to be back to normal next year, but we're gonna be a lot closer to normal than we've been for a while.

Speaker Change: Recognizing you don't want to revisit the multi year targets, but just thinking about those levers and just kind of the math and how lean things have got relatively speaking over the last couple of years from an opex standpoint.

Doug Schenkel: Is there anything I'm missing as I kind of walk through this, as we think about the margin trajectory into next year and the prospects for maybe outsized incrementals?

Speaker Change: Is there anything I'm missing as I kind of walk through this as we think about the margin trajectory into next year and the prospects for maybe outsized incrementals.

Speaker Change: I think we can take once again is one that both of US I think all of them or do you need to that in the previous answer I think we have a program for the year.

Thierry Bernard: I think we can take, once again, this one on both of us. I think, Roland, as you did to that in a previous answer, I think we have probably some opportunities for improvement compared to the targets we gave back in June. At the same time, I would also highlight that we have already a very strong P&L if you compare to competition. We have proven you that when we speak about effort in operational efficiency, not only we mean it, but we deliver on that. You start to see that. Not just about decisions like NeuMoDx. It's better site utilization and rationalization of our site networks. You have seen the decision that we took on moving the San Diego for Verogen to Germantown, or Frederick, very close to Germantown. It's significant efforts on pressure on cost of goods.

Speaker Change: Some opportunities for improvement compared to the targets we gave.

Speaker Change: Back in June.

Speaker Change: At the same time I would also highlight that.

Speaker Change: We have already a very strong P&L, if you compared to competition.

Speaker Change: We have proven U.

Speaker Change: That when we speak about a 14 O per restaurant or efficiency not only we minute, but we deliver on that you start to see that.

Speaker Change: Not just about our decisions like pneumonia eggs.

Speaker Change: Better site utilization and rationalization of our sites.

Speaker Change: Networks, you have seen the decision that we took on moving the San Diego for railroads into.

Speaker Change: Germantown.

Speaker Change: Or for the risks very close to Germantown.

Speaker Change: Significant efforts on pressure and pressure on cost of goods you have seen the tremendous evolution of chaos that cost of goods and therefore contribution to margin improvement in Q3.

Thierry Bernard: You have seen the tremendous evolution of QIAstat cost of goods and therefore contribution to margin improvement in Q3. It's tremendous efforts on quality of purchasing and procurement. It's end-to-end processes. The fundamental investment that we did in updated ERP with SAP HANA will pay off. It's probably a better investment than many companies in digital activities. Yes, we have opportunities, but let's deliver first on the numbers we gave and then we'll see. Roland, you might have some other colors there as well.

Speaker Change: It's tremendous efforts on quality of purchasing and procurement.

Speaker Change: It's end to end processes, the fundamental investment that we did in the <unk>.

Speaker Change: D G E M P with ACP or not we'd pay off.

Speaker Change: It's probably a better investment than many companies in digital activities.

Speaker Change: So, yes, we have opportunities, but let's deliver first on the numbers we gave.

Speaker Change: And then we'd see how long you might have some wage cost there as well.

Speaker Change: I've seen a different perspective, a DUC is also that we see of course certain things growing much faster than we thought we clearly as you have seen <unk> got now four approvals are starting more or less a couple of weeks, which I think is great news, which also again helps us to revisit some of our R&D pipeline projects, then we might access.

Roland Sackers: I think a different perspective, Doug, is also that we see, of course, certain things going much faster than we thought. We clearly, as you have seen, got now four approvals on QIAstat in more or less a couple of weeks, which I think is great news. Which also, again, helps us to revisit some of our R&D pipeline projects, and we might accelerate certain things because it's clearly some topics which are going quite well right now. I would say it's also, while again, as I said, we will see nice margin improvements in Q4, next year for sure, and the 31%, going back to the question we had from Matt before, is probably something what, as I said, needs at some point in time certain revisit.

Speaker Change: Certain things because the scale is.

Speaker Change: Some topics, which are going quite well right now so I would say it is also while I again as I said, we will see nice margin improvement in the fourth quarter next year for sure and so 31% as a going back to the question about from met before is probably something what is.

Speaker Change: I said, it's at some point in time certainly visit.

Roland Sackers: We have also great R&D ideas, and we might accelerate some of them if we have the capacity and seeing and confirming the return rates on that. Trying here, also keeping the balance is an important topic for us as well.

Speaker Change: We have also great R&D ideas and we might accelerate some of them. If you have the capacity and seeing unconfirmed because there is a.

Speaker Change: So a ton of it sounds that so trying here.

Speaker Change: Also keeping that balance.

Speaker Change: It's an important topic for us as well.

Speaker Change: Thank you we'll take our next question from Nora.

Doug Schenkel: Thank you. We'll take our next question from Aisyah Noor with Morgan Stanley.

Nora: With Morgan Stanley.

Speaker Change: Hi, Thanks for the question.

Aisyah Noor: Hi, thanks for the questions. My first one is on the QDI business, where you called out a low single-digit decline. What portion of your sales is subscription versus licensing today? Was this shift to subscription already happening before but accelerated in the quarter? How does this shape your view around the growth ambitions for QDI versus what you communicated at the capital markets day of I think 15% growth through 2023?

Speaker Change: My question is on the CDI business, where you called out a low single digit decline.

Speaker Change: What portion of your sales is subscription versus licensing today and was this just.

Speaker Change: Subscription already happening before but accelerated in the quarter.

Speaker Change: And how does that shape your view around the growth ambitions for <unk> versus what you communicated at the capital markets day.

Speaker Change: Next question.

Speaker Change: Yeah. Thanks, it's an interesting question.

Thierry Bernard: Yeah, thanks. It's an interesting question. It has not happened just overnight. It's a trend. We listen to our customers, especially our pharma customers, the biggest customers, and this is the evolution they want. It doesn't change the volume of the contract. It changed the way we recognize the revenues over time. The interest for our solutions has not decreased. If you look at the performance of QDI Clinical, it was very much growing. It's a bit softer in research and academia, but because research and academia is a bit softer those days, it will pick up at a point as well. Long story short, we are accompanying our customers in their also model evolution, listening to them. It's a good thing to do, I think.

Speaker Change: It has not happened just overnight, it's a trend we listen to our customers, especially yeah were found that customer because customers and you see the evolution. They want it doesn't change the volume of the contract you changed the way we recognize the revenues over time.

Speaker Change: The interest for our solutions as not decrease if you look at the performance at the performance of <unk> clinical it was very much growing so a bit softer in the research and academia, but because research and academia is a bit softer those days it will pick up at two points as well. So long story short we are.

Speaker Change: Our company and our customers in there also moderate evolution listening today still a good thing to do hedging is not changing the nature or the volume of a contract or the interest in our portfolio and therefore, our ambition to achieve 200 millions by 28 is not changing we are number one but never forget.

Thierry Bernard: It's not changing the nature or the volume of our contract or the interest in our portfolio, and therefore our ambitions to achieve $200 million by 2028 is not changing. We are a number one, but never forget, compared to competition, we are a profitable number one. It's accretive also to our P&L. This is something also that we need to highlight. It's a profitable business for QIAGEN. It's not the case in the rest of the market.

Speaker Change: Compared to competition, we have a profitable number one it's accretive also to our P&L and you see something also that we need to highlight it's a profitable business for <unk>, it's not the case in the rest of the market.

Speaker Change: Yeah.

Speaker Change: Yeah.

Aisyah Noor: Okay. Thank you. My second one was on QuantiFERON. Keen to get your updated thoughts on signing a secondary distribution partner. Just what would be the biggest hurdles to signing on a new partner? Is it the right instrument, the right licensing terms? Partnerships are not foreign to you. You've got partnerships with Astra, Lilly, and DiaSorin. It's not like you've not done this before. If you could talk through your considerations there, that would be great.

Speaker Change: And then on the second one was on Qantas Karen.

Speaker Change: Keen to get your updated thoughts on signing a new secondary distribution partner, just what would be the biggest hurdles to signing on a new partner or is it the right instrument. The right licensing terms because partnerships are not foreign to you Scott partners partnerships with Astra and just felt like you've touched on this before you could talk to me a consideration.

Speaker Change: There that would be great.

Speaker Change: As we have said many times we are.

Thierry Bernard: As we have said many times, we are remaining open to different options. The first thing that we want to highlight, and it is important, is that the partnership with DiaSorin works well and has proven to be efficient. By contract, we now have the right to add one new partner per geographic region where we are together operating with DiaSorin. We review options. Install base would be a criteria. Real willingness of a would-be partner to invest. We need to show also commitment of that would-be partner to invest into the business, in market creation, in demand creation. Basically, we are in the best of many worlds at the moment at QIAGEN. On one hand, we have a very successful partnership. On the other hand, we have options to take potentially other partnerships. We'll see. Time will tell.

Speaker Change: The remaining open to different options. The first thing that we want to highlight and it is important.

Speaker Change: Is that the partnership with dire sort of in the works when.

Speaker Change: And that's proven to be efficient.

Speaker Change: By contract, we now have the right to had one new partner.

Speaker Change: For geographic region, where we are together operating with jewelry.

Speaker Change: We review options installed base would be your criteria.

Speaker Change: Really winning nasal who would be partner to invest we need to shore. So commitment of that would be partner to invest into the business in market creation in demand creation. So basically we are in the best of many words at the moment that kitchen.

Speaker Change: On one hand, we have a very successful partnership.

Speaker Change: On the user and we have options to.

Speaker Change: Take potentially a.

Speaker Change: Also our partnerships with.

Speaker Change: We'd see time will tell.

Speaker Change: Yeah.

Speaker Change: Thank you we'll take our next question from Michael Raskin with Bank of America.

Aisyah Noor: Thank you. We'll take our next question from Michael Ryskin with Bank of America.

Speaker Change: Hey, guys.

Michael Ryskin: Hey, guys. Thanks for the question. I want to follow up on sample prep, which I think was just touched on a little bit. You talked about market growth, you've talked about CAGR relative to that for the out years, but just the performance this year, I just wanted to get into that a little bit more. It's still an important part of the business and you're outperforming on diagnostics, clearly, but just anything more you can call on that in terms of confidence and re-accelerating maybe some of the one-timers that are impacting that this year, whether that's on instruments or broader market demand. Just help us bridge that back to low single digits.

Speaker Change: Thanks for the question I.

Speaker Change: I want to follow up on on sample prep, which I think was just touched on a little bit.

Speaker Change: Just.

Speaker Change: You talked about market growth you've talked about.

Speaker Change: CAGR relative to that.

Speaker Change: Yes, but just the performance this year I just wanted to against that a little bit more.

Speaker Change: Still an important part of the business and you're outperforming and diagnostics clearly, but just anything more you can call on that in terms of confidence and re accelerating maybe some of the one timers that are impacting that this year.

Speaker Change:

Speaker Change: Whether that's on instruments or or or broader market demand just help us bridge that back to low single digits.

Speaker Change: Well as you know Medicare Thanks for the question you know that we.

Thierry Bernard: Well, as you know, Michael, thanks for the question. You know that we have significant market shares in this segment of the market, both manual and automated. We have taken a clear strategy for the last four years to bet on automation. Betting on automation for us means either upgrading our current install base with new features or launching new instrument. In the last two years, two years and a half, what you have seen is upgrade of current install base. QIAcube became QIAcube Connect. EZ1 became EZ2. What you are going to see now in the coming two years is a mix of both. We are going to upgrade QIAsymphony. I remind you that QIAsymphony is still the flagship instrument for thousands of laboratories all over the world. This instrument will become QIAsymphony Connect with new features launched in plan at the end of 2025.

Speaker Change: Have significant market shares in that.

Speaker Change: In this segment of the market both manual and automated.

Speaker Change: But we have taken a clear strategy for the last four years to bet on automation.

Speaker Change: And beating on automation for us means either.

Speaker Change: Bridging our current installed base with new features.

Speaker Change: Oh launching new instrument.

Speaker Change: In the last two years two years two years on the heart. What you have seen is a grade of current install base.

Speaker Change: Okay, Yeah, Q became very acute connect.

Speaker Change: Is it one became.

Speaker Change: Is it too.

Speaker Change: What you are going to see now in the coming two years.

Speaker Change: He is a mix of both we are going to have great Symphony I remind you that Casey when he is still the flagship in three months for thousands of laboratories all over the world.

Speaker Change: And this instrument will become CFO and connect with new features.

Speaker Change: Launched in client.

Speaker Change: At the end of 2025.

Speaker Change: We said in New York that we would.

Thierry Bernard: We said in New York that we would enter a new segment of high throughput sample tech. What we will also add to that plan is the launch of a new system where we are going to give you more details probably by J.P. Morgan, which is a much more smaller throughput benchtop system. We have three automation coming on. If you look at our results for the last two quarters, we are back on growth. Yes, it's 1% growth, but it's growth based on significantly already existing market shares. We don't see why we could not continue that momentum and even accelerating it slightly because we are going to offer new solutions, either in volume, our high throughput system, or easy automation of low throughput customers with the new system that we will present at J.P. Morgan.

Speaker Change: Enter new segment.

Speaker Change: Of high throughput.

Speaker Change: Temporary tick.

Speaker Change: We disclosed the solution in New York.

Speaker Change: And what we will also add to that plan is the launch of a new system, where we are going to give you more details probably by J P. Morgan.

Speaker Change: It is a much more smaller throughput bench top system. So.

Speaker Change: So we have three automation coming on.

Speaker Change: And if you look at our results for the last two quarters.

Speaker Change: We are back on growth, yes, it's 1% growth, but its growth.

Speaker Change: Based on significant to the already existing market shares.

Speaker Change: So we don't see.

Speaker Change: Why we could not continue that momentum and even accelerating it slightly because we are going to fill new solutions easier in volume our hydro system or.

Speaker Change: Easy automation, though overall throughput customers with.

Speaker Change: The new system that we will present at Jpmorgan.

Speaker Change: So this is getting goes to consider the confidence to be probably yes.

Thierry Bernard: This is giving us the confidence to be probably, yes around the 3% CAGR for the coming years, which will be above market growth, which will strengthen our market leadership, and then delivering on what we gave you and the numbers we gave you in New York.

Speaker Change: Around the 3% CAGR for the coming years, which will be above market growth, which will strengthen our market leadership and then delivering on what we gave you on the numbers. We gave you in New York.

Speaker Change: Okay. That's helpful. That's useful bridge and then maybe just a modeling tie up on <unk> I think you've been very consistent sort of like the wind down and the timing of that.

Michael Ryskin: Okay. That's helpful. That's a useful bridge. Then maybe just the modeling tie-up on NeuMoDx. I think you've been very consistent in sort of like the wind down and the timing of that. Just as we look ahead to 2025, any way to size just how much contribution that will still be to the model next year? I realize that you're winding it down. We're expecting about a 1% headwind from NeuMoDx year over year. Is that about right, or could it be a little less, a little more than that? Thanks.

Speaker Change: But just as we look ahead to 2025, I mean any way to size just how much contribution there will still be to the model next year I realize that you're winding it down we're expecting about a 1% headwind from new modest year over year.

Speaker Change: Is that about right or what could it be a little less little bit more than that.

Thierry Bernard: Yeah. Thanks. Yes, thank you for highlighting that we are executing well here. We are not on a call for 2025, but the way I invite you to see it is that we will still have some revenues in Q1 and Q2. Our site for NeuMoDx in Ann Arbor will be definitely shut down at the end of Q2. The way you should see it probably is no revenues anymore on NeuMoDx in H2 of 2025.

Speaker Change: Yeah.

Speaker Change: Yeah. Thanks, yes. Thank you for highlighting that we are executing well here again, we are not on the call for 25, but the way I invite you to see it is that.

Speaker Change:

Speaker Change: We will still have some revenues in Q1 and Q2.

Speaker Change: Our sites for new digs in and our board will be definitely shut down.

Speaker Change: At the end of Q2, and therefore, the way you should exceed probably ease.

Speaker Change: No revenues anymore on the new Modi in H two of 2025.

Speaker Change: Okay. Thanks.

Michael Ryskin: Okay, thanks.

Speaker Change: We will take our next question from Casey Woodring with J P. Morgan.

Operator 2: We'll take our next question from Casey Woodring with J.P. Morgan.

Speaker Change: Great. Thanks for fitting me in guys I appreciate it.

Casey Woodring: Great. Thanks for fitting me in, guys. Appreciate it. One quick one maybe for Roland. Instrument revenue was down year on year but was flat sequentially. Curious what you're embedding for instrument growth sequentially in 4Q, if you're baking in any sort of seasonal step-up or assuming continued stabilization there. I have one follow-up.

Speaker Change: One quick one maybe for rolling so instrument revenue was down year on year, but was flat sequentially.

Speaker Change: So what you're embedding for instrument growth.

Speaker Change: Turning to <unk>.

Speaker Change: Taking in any sort of seasonal step up or assuming kind of continued stabilization. There and then I have one follow up.

Speaker Change: Yeah No. Good question, we actually do believe that the fourth quarter.

Roland Sackers: No, good question. We actually do believe that the Q4, in general, will be slightly better sequentially, in terms of instrumentation growth. Again, that is clearly one factor, particularly if you also have in mind that clearly, there's a headwind also here from NeuMoDx. We see that particularly, again, QIAstat, QIAcuity and some others are going to being helpful on the instrumentation side. Nevertheless, overall it will stay negative, but better than the quarter before.

Speaker Change: <unk> will be slightly better.

Speaker Change: Eventually.

Speaker Change: In terms of instrumentation growth again that is clearly one factor, particularly if you're all set in mind, but clearly there's a headwind also yards or a month from normal <unk>. So we see that a particular again chaos topcoder acuity and some others are going to help that being helpful. On the instrumentation side. Nevertheless, overall it does stay negative.

Speaker Change: That is in a quarter before.

Speaker Change: Got it that's helpful and.

Casey Woodring: Got it. That's helpful. Thierry, maybe one for you. You talked a little bit about your capabilities in liquid biopsy and have launched a number of new solutions there recently. Just curious how you're thinking about that application driving consumables growth here over time, and if there's really any way to quantify the liquid biopsy growth contribution here moving forward. Thank you.

Speaker Change: Maybe one for you you know you talked a little bit about your capabilities in liquid biopsy and have launched a number of new solutions that recently, just curious how youre thinking about that application driving consumables growth year over time, and if there's really any way to quantify the liquid biopsy growth contribution here moving forward. Thank you.

Speaker Change: So the way I invite you to see Qiagen.

Thierry Bernard: The way I invite you to see QIAGEN in liquid biopsy is one, that of a pioneer. Our penetration of the liquid biopsy market is not just 2024. Again, as I said today, we are the only company fully mastering the three key technologies necessary to perform good liquid biopsy, cfDNA, ctDNA, exosome. Second, we are an enabler. It's using liquid biopsy-based solution by QIAGEN that big names on the market, the Guardant Health, the Natera, and many others in the world can perform their solution. Being an enabler is a very smart positioning because more and more companies investing in liquid biopsy have to use your solutions, but you are not necessarily exposed to downsides like change of coverage in reimbursement, so on and so forth.

Speaker Change: In liquid biopsy is one that will be paid during the year.

Speaker Change: Our penetration of the liquid biopsy market is not just 2024.

Speaker Change: And again as I said today, we are the only companion fully mastering the three key technologies necessary to perform good liquid biopsy CCF DNA Ctc's XOMA.

Speaker Change: And second we are an enabler.

Speaker Change: It's using liquid biopsy based solution by Qiagen that big names on the market the guava and had it did not they run many users in the world can perform their solution.

Speaker Change: And being an enabler is a very smart positioning because.

Speaker Change: More and more companies investing in liquid biopsy have to use your solutions.

Speaker Change: But you are not necessarily exposed.

Speaker Change: Two don't sides like a change of coverage and reimbursement so on and so forth.

Thierry Bernard: This is where we want to insist in our positioning, being a top enabler of liquid biopsy solution providers, mainly in oncology application, but beyond oncology. Also, as we said in New York, our portfolio in Sample Tech will invest beyond instrumentation also in much more added value consumable Sample Tech, and mostly around liquid biopsy. This is where we have value, and we can also generate quite high pricing as well. That's the positioning that we want to take, that we are already leveraging from, but that we want to strengthen.

Speaker Change: And this is where we want to insist in our position being going.

Speaker Change: English top enabler.

Speaker Change: Our liquid biopsy solution providers, mainly.

Speaker Change: Mainly in oncology application, but beyond oncology.

Speaker Change: You will see also as we said in New York.

Speaker Change: Our portfolio in sample tick.

Speaker Change: We'll invest beyond instrumentation also in much more added value consumer board central stake and mostly around liquid biopsy.

Speaker Change: Because this is where we have value and we can also.

Speaker Change: Generate quite high pricing as well so that's the position that we want to take that we are already leveraging from but we want to strengthen.

Speaker Change: Okay.

Operator 2: Thank you. We'll take our last question from Andrew Brackmann with William Blair.

Speaker Change: Thank you, we'll take our last question from Andrew Backman.

Speaker Change: Blair.

Blair: Hi, guys. Good afternoon, thanks for taking the questions.

Andrew Brackmann: Hi, guys. Good afternoon. Thanks for taking the question. Maybe just following the US election earlier this week, a key topic here has been just sort of tariffs broadly. Recognizing that QIAGEN's a sort of very global business, can you maybe just sort of level set us on how you're thinking about any exposure there? I guess bigger picture, any impact to the way you're sort of thinking about running the business in light of some of these potentially broad policy directions that we've been hearing about? Thanks.

Speaker Change: Maybe just following the U S election earlier this week at <unk>.

Speaker Change: Here, it's been sort of tariffs broadly so recognizing that qiagen.

Speaker Change: <unk> global business can you, maybe just sort of level set us on how you're thinking about any exposure there and then I guess bigger picture any impact the way you're sort of thinking about running the business in light of some of these potentially broad policy directions that we've been hearing about.

Speaker Change: Thank you William and we can also take this question and the two of Us obviously.

Thierry Bernard: Thank you, William. We can also take this question, the two of us, obviously. The first thing I would say is that, as you said, we are a global company. One of the strengths in the company is that our geographic presence is extremely balanced between the US, Europe, and emerging countries. That's a strength. Second, we believe that it's very far too early to take some statements. Obviously, we listen to the candidates' platform, we build our model accordingly. We'll see what happens. It's a bit premature. What is very clear as far as the US is concerned, first of all, it is still, and by far, the main market for healthcare and for healthcare innovation in the world.

Speaker Change: Hum.

Speaker Change: Yes.

Speaker Change: The first thing I would say is that yes.

Speaker Change: You said, we are a global company and one of the strengths in the companies that are well right.

Speaker Change: Geographic presence is extremely balance between the U S. But also Europe emerging countries. So that's our strength.

Speaker Change: Second we believe that it's very fast too early.

Speaker Change: <unk>.

Speaker Change: Take some statements.

Speaker Change: Obviously, we listen to the candidate spray foam and we built our model.

Speaker Change: Accordingly, we will see what happened it's a bit premature.

Speaker Change: Uh huh.

Speaker Change: What is very clear as far as the U S.

Speaker Change: Is concerned.

Speaker Change: First of all it is too and by far the main market for healthcare and for health care innovation in the world.

Speaker Change: Being in the U S president commercially, but also with our R&D and manufacturing is extremely important and there is no way we are going to change that for the rest we need to see and to look for the coming months and confirmed to adjust our policies and our actions.

Thierry Bernard: Being in the US present commercially, but also with R&D and manufacturing is extremely important, and there is no way we are going to change that. For the rest, we need to see and to look for the coming months and constantly adjust our policies and actions according to decisions that might be made. That's what I would say at this stage. Roland, would you want to add some colors to that?

Speaker Change: Actions according to a decision that.

Speaker Change: It might be made but that's what I would say at this stage or not would you want to add some color to that.

Speaker Change: Along the lines are high and I do think it's very straightforward right first of all as to you said it well there is no detail to lease and kill.

Roland Sackers: Along the lines, Andrew, I do think it's very straightforward. First of all, as Thierry said, there's no details released, and that clearly takes some time before that is going to happen. Nevertheless, some of the facts are clearly in the programs, which were announced ahead of the elections. The ones which are probably more concrete are on the corporate tax side. It's quite obvious, as Thierry Bernard said, with having around 50% of revenues in the US, with also having significant local sites in a couple of places in the US. There's clearly also a corporate tax liability for QIAGEN, we have to see what that means. There's also a bigger question now, what happens to the whole Pillar Two development globally? I'm quite sure that with President Trump, that agenda is going to change as well.

Speaker Change: Clearly it takes some time before that it's going to happen, but nevertheless, some of its effects are clearly in the programs are.

Speaker Change: Which were announced and I head up the elections and the one which are the ones, which are probably more concrete answer corporate tech side, and it's quite up because as you said with southern on 50% of the revenues in the U S results are having a significant.

Speaker Change: Our local sites in the couple of let's say, yes, there's clearly also a corporate tax liability for Qiagen. So we have to see what that means. There's also a bigger question now what happens towards the whole pillar two developments globally, because I'm quite sure that.

Speaker Change: With President Trump that agenda is going to change as well and as you know we realize expecting.

Roland Sackers: As you know, we were rather expecting a rising corporate tax rate in the midterm plan as well. Again, there's no final answer on that, but I do think there becomes more questions. Tariffs, as we all know, always go in two directions. There's never just one side adding tax on other side, and nobody's reacting to that. Therefore, I would say, if that is going to happen, that is something that is affecting companies globally in any direction. There you have to wait for the details.

Speaker Change: Rising corporate tax rate in the midterm plan as well. So again, there's no final answer on that but I do think that it becomes more questions.

Speaker Change: Terrorists as we all know all of US go in two directions are there's never just one side, adding text another site that nobody is reacting to that.

Speaker Change: Zafar would say if that is going to happen that is something that is affecting companies globally in any direction that you have to wait for the details.

Speaker Change: Great. Thanks, guys.

Operator 2: Great. Thanks, guys.

Speaker Change: Okay with that I'd like to end the call and express our appreciation to all of you for your participation and please do not hesitate to reach out to Dominica and me with any questions or comments topics that you want to address thank you very much bye bye.

John Gilardi: Okay. With that, I'd like to end the call and express our appreciation to all of you for your participation. Please do not hesitate to reach out to Dominika and me with any questions or comments, topics that you want to address. Thank you very much. Bye bye.

Speaker Change: Okay.

Operator 2: Thank you. Ladies and gentlemen, this concludes the conference call. Thank you for joining. Have a pleasant day. Goodbye.

Speaker Change: Thank you ladies and gentlemen, this concludes the conference call. Thank you for joining and have a pleasant day Goodbye.

Speaker Change: [music].