Q1 2025 Qiagen NV Earnings Call

Ladies and gentlemen, thank you for standing by I'm, Lisa Your P. G I call operator, welcome and thank you for joining Kayogen's Q1, 2025 earnings conference call webcast. At this time all participants are in a listen only mode. Please be add.

Operator: Ladies and gentlemen, thank you for standing by.

Lisa: I'm Lisa, your PGI call operator.

Operator: Welcome, and thank you for joining Qiagen's Q1 2025 earnings conference call webcast. At this time, all participants are in a listen-only mode.

Operator: Please be advised that this call is being recorded at Qiagen's request and will be made available on their Internet site.

It's being recorded at Kayagen's request and we'll 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 touch tone telephone. Please press the star key followed by zero.

Operator: 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.

John Gilardi: At this time, I'd like to introduce our host, John Gilardi, Vice President, Head of Corporate Communications at Qiagen. Please go ahead.

John Gilardi: Thank you, operator, and welcome all of you to our call for the first quarter of 2025. We appreciate your time and interest in CHI. Joining me today are Thierry Bernard, our Chief Executive Officer, and Roland Sackers, our Chief Financial Officer. Also joining us is Dr. Domenica Martorana from our IRD. This call is being webcast live and will be archived in the IR section of our website. Copy of the results, press release, and presentation are available on our website as well.

John Gilardi: Before we begin, I'd like to remind you that this call will Outshore results may differ materially from those projected due to various factors. These are described in our... Filed with the U.S. Securities and Exchange We will also refer to certain financial measures not prepared in accordance with U.S. Generally Accepted Accounting Principles, or GAP. and Reconciliations to the Most Directly Comparable Gap Figures are in our Please note that all references to earnings per share refer to diluted With that, let me hand the call over.

We will also refer to certain financial measures not prepared in accordance with U S. Generally accepted accounting principles or GAAP. These non-GAAP measures provide insights for investors and reconcile comparable GAAP figures are in our release. Please note.

Unknown Executive: Thank you, Joan.

Thierry Bernard: Hello and good morning, good afternoon or good evening to everyone around the world. And thank you once again for joining. As you have read, Qiagen delivered a very good and very solid start to 2025, once again demonstrating the resilience and strength of our... for both net sales and adjusted earnings. Even as we continue to operate in a quite complex macroenvironment. Marked by Cautious Customer Spending and Evolving Global Trade Dynamics. Qiagen is navigating this environment and capitalizing on opportunities to deliver solid, profitable growth while investing in our future. The performance to start 2025 reflects the differentiation of our portfolio.

Very good and very solid start to 2025, once again, demonstrating the resilience and strength of our business, we exceeded our outlook for both net sales and adjusted earnings even as we continue to.

Deliver solid profitable growth, while investing in our future.

The performance to start 2025 reflects the differentiation of our portfolio anchored by growth pillars, all products were cagen as a leadership position in highly attractive markets.

Thierry Bernard: Anchored by growth pillars. All products were Qiagen as a leadership position in highly attractive markets. This steady progress and constant execution. Now delivering for 22 quarters in a row. Give us confidence to drive sustainable long-term value creation.

Steady progress and constant execution now delivering for 22 quarters in a row give us confidence to drive sustainable long term value creation. So let me highlight our key messages for today.

Thierry Bernard: So let me highlight our key messages for today. First. We exceeded our outlook for Q1 2025. Full results confirm net sales of 483 million dollars, rising 7% at CER compared to the first quarter of 2012. Adjusted diluted earnings per share were $0.50 at CER again and this was well ahead of the outlook for at least $0.50 CER. The second key message, our portfolio is performing well in a quite challenging environment.

First we exceeded our outlook for Q1 2025.

The full results confirm net sales of $483 million rising 7% at C E R compared to the first quarter of 2024.

Second key message our portfolio is performing well in a quite challenging environment can I start had an outstanding quarter driven by double digit sales growth from new panel launches and Yo.

Thierry Bernard: Kayasthat had an outstanding course. Driven by double-digit sales growth from new panel launches and new instrument placements. We continue to build our global presence in syndromic testing. for respiratory gastrointestinal but also meningitis condition. and we continue to advance research and development initiatives.

Continue to build our global presence in syndrome testing for respiratory gastrointestinal, but also menangitis conditions and we continue to advance research and development initiative to add panels that even.

Thierry Bernard: Thank you very much. Our quantiFERON tuberculosis test also delivered another strong quarter of double-digit cells . As we continue to drive the transition to blood-based testing for TB testing from the outdated skin Kayak Week Our digital PCR platform continues to build momentum in high growth fields like oncology, Sinan Jain, Fira and Microbiome Research. In our bioinformatics business, Qiagen Digital Insight is extending its leadership by helping clinical and research customers unlock complex genomics data with greater speed and accuracy. and in sample technology.

In the coming years, our currency Feron tuberculosis test also delivered another strong quarter of double digit sales growth as we continue to drive the transition to block Baseding for testing from the.

Skin.

Our digital PCR.

And in some part technology, we are preparing for a new wave of innovations and growth with the upcoming launches of important new automations in three months during the next coming months Kaya Symphony connect Kayami and KYA.

Thierry Bernard: We are preparing for a new wave of innovation and growth with the upcoming launches of important new automation instruments during the next coming months. Kaya Symphony Connect, Kaya Mini, and Kaya Studio.

Thierry Bernard: Curbed Message We are reaffirming our full year 2025 out... We continue to expect around 4% sales growth at CER, which is about 5% growth in our core portfolio. Excluding the discontinued products like new models. all day every We confirm the upgrade of our target for adjusted earnings. The share for about $2.35 at CER, based on our strong start to 2025, and this is up 7 cents from the initial outlook for the As we look ahead in 2019, Maintaining strategic flexibility is critical in this volatile environment. It is about adapting to challenges and sizing growth opportunities.

12, Mississippi, we are reaffirming our full year 2025 outlook, we continue to expect around 4% sales growth at C. E R, which is about 5% growth in our.

Excluding the discontinued product like Pneumodics or Dialenos.

We confirm the upgrade of our target for adjusted earnings per share for about $2.35 at C. E. R. Based on our strong start 2025, and this is up seven cents from the.

Look for this year.

As we look ahead in 2025, maintaining strategic flexibility is critical in this volatile environment. It is about adapting to challenges and sizing growth opportunity.

Thierry Bernard: Fourth message for today. We are expanding the range of options to increase return to our shareholders. at our upcoming Annual General Meeting in June. We will propose the introduction of an annual cash dividend. We will also seek shareholder approval for another synthetic chair repurchase of up to $500 million for consideration over an 18-month period. With about $600 million already returned to shareholders since 2024, those actions reflect our disciplined approach to capital allocation. So we are moving ahead on our target to return at least $1 billion to shareholders by the end of 2028, absent of significant M&A.

Fourth message for today, we are expanding the range of options to increase return to our shareholders at our upcoming annual General meeting in June we would propose introduction of an annual cash dividend we would also.

Approval for another synthetic chair repurchase of up to $500 million for consideration over an 18 month period with about $600 million already returned to shareholders Nanim.

Those actions reflect our discipline approach to capital allocation. So we are moving ahead on our target to return at least $1 billion to shareholders by the end of 2028 at.

Finally.

Thierry Bernard: I would also like to mention the upcoming leadership transition in our supervisory board as well as the decision of two members to step down after the upcoming annual general On behalf of our leadership team and every Qiagen We want to sincerely thank Larry Rosen for his dedicated service since 2013, and in particular, as our Chairman of QIAGEN since 2020. This transition reflects a long-planned evolution in our government. After 12 years of valued service on our supervisory board, Larry is no longer classified as independent under proxy advisory guidelines. We therefore look forward to continue working closely with Steve Ruzkov.

I would also like to mention the upcoming leadership transition in our supervisory board as well as the decision of two members to step down after the upcoming annual general meeting on behalf of our leadership team and a.

We want to sincerely thank Larry Rosen for his dedicated service since 2013 and in particular as our chairman of Kayagen. Since 2020. This transition reflects a long plan.

You know we're governance after 12 years of valued service on our supervisory Board Larry is no longer classified as independent and proxy advisory guidelines.

We therefore look for what to continue work closely with Steve Ruskowski, who is intended to be elected by the ward as our new chairman after the General Assembly, Steve as you all know brings extensive global healthcare.

Thierry Bernard: who is intended to be elected by the world as our new chairman after the General Assembly. Steve, as you all know, brings extensive global healthcare leadership experience to Qiagen and that will support our ambitions in the years ahead.

And that we'd support our ambitions in the U S Ohio.

Thierry Bernard: We would also like to thank Hélène Mardot.

We would also like to thank Ellen Mardis, who also decided not to stand for reelection elen provided tremendous scientific insight and deep expertise as a member of the board since 2014 with that we are back to.

Thierry Bernard: who also decided not to stand for re-election. Elaine provided tremendous scientific insight and deep expertise as a member of the board since 2009.

Thierry Bernard: Who's that? We are back to eight supervisory board members, a composition consistent with historical levels at CAYAD.

A reboard members a composition consistent with historical levels at Kayagen.

Thierry Bernard: So to give you a quick summary, all of these elements A great pod for you! The strong execution, combined with expanded opportunities for shareholders' returns and development in our leaderships, helped position Qiagen to make important progress in 2025 towards delivering on our 28 ambitions.

So to give you a quick summary, all of these elements a great portfolio, a strong execution combined with expanded opportunities for shareholders returns and development in our leaderships help position cagen to make important progress in 2025.

Roland Sackers: With that, I now would like to hand the call over to Roland to provide some more details on our financial... Thank you Thierry and hello everyone. We are pleased with the start to 2025 and see opportunities to deliver very strong results. Let me provide some highlights from the quarter. First, we delivered a significant improvement in profitability. Our adjusted operating income margin rose to 29.8% of sales, up more than 4 percentage points from the first quarter of 2024. We are very encouraged by the key drivers of this margin expansion. They included a favorable shift towards consumables and bioinformatics solutions.

Speaker Change: [noise]. Thank you Terry and Hello, everyone. We are pleased with the start to 2025 and see opportunity to deliver very strong results. Let me provide some highlights from the quarter first we delivered a significant improvement.

Speaker Change: Oh, adjusted operating income margin rose to 29.8% of sales up more than four percentage points from the first quarter of 24.

Speaker Change: Very encouraged by the key drivers of this margin expansion. They included a favorable shift towards consumables and Bioinformatic solutions. We are also seeing benefits from portfolio optimization actions a face out of Normotics.

Roland Sackers: We are also seeing benefits from portfolio optimization actions, in particular the phase-out of Norm ODX, and this is on track for completion in mid-2025. Another point we are seeing is an even higher level of discipline across Qiagen in managing our core space and the recent evolution of our organization was a key trigger for this. The broad progress is enabling us to invest in targeted areas like R&D in line with our target for about 9-10% of sales. And we are steadily driving the digitization of our commercial channels to enhance customer engagement. In light of this strong progress and the fact that we continue to see momentum and an opportunity for growth, we are reviewing our target for an adjusted operating income margin of at least 31% well ahead of the original timeline for 2018.

Speaker Change: At that point, we are seeing is an even higher level of discipline across cygn in managing our cost base and the recent evolution of our organization for the key trigger for this support progress is enabling us to invest in targeted areas like Rd in.

Speaker Change: 9% to 10% of sales and we are steadily driving the digitization of our commercial channels to enhance customer engagement.

Speaker Change: In light of this strong progress and the fact that we continue to see momentum and an opportunity for growth. We are reviewing our target for an adjusted operating income margin of at least 31% well ahead of the original timeline for 28 this represents well base.

Roland Sackers: This represents well over 300 basis points of margin improvements since 2003.

Speaker Change: Let me now walk through through some of the additional details on our performance among our product groups diagnostic solutions sales force, 11% at constant exchange rates driven by another stock from.

Roland Sackers: Let me now walk through some of the additional details on our performance. Among our product groups, Diagnostic Solutions sales rose 11% at constant exchange rates, driven by another strong quarter from QIA Strategic sales rising 37% and Quantiferum sales up 16%. PCR technologies delivered 14% CER growth led by rising adoption of Sakai Acuity digital PCR system and very strong growth in consumables. Also supporting the performance for higher sales of other products used in non-regulated PCR applications, including our OAM business. Sample technology sales were down 1% CEA, reflecting lower instrument sales amid cautious customer spending. At the same time, we saw good trends for automation consumables in key regions, in particular high single-digit growth in the EMEA region and also higher sales in the Asia-Pacific region outside of China.

Speaker Change: Why is it 37% and 25 sales up 16%.

Speaker Change: SAB technology sales were down 1% C, reflecting lower instrument sales a mid cautious customer spending. It's the same time, we saw good trends for automation consumables in key regions in particular high single digit growth in the.

Roland Sackers: In genomics and next-generation sequencing, sales were down 2% at CER compared to the first quarter of 2014. This reflects a lower demand for some NGS consumables and services during the quarter. However, we saw high single-digit CR growth from Qiagen Digital Insights, as both our discovery and clinical portfolios delivered strong performance. The positive momentum in QDI is an encouraging signal as we work through the transition to SaaS subscription models from longer-term licensing agreements, particularly with pharma customers. Turning to regional performance, the Americas grew 9% at constant exchange rates, supported by strong performance in the US, Canada, and Latin America.

Speaker Change: However, we saw high single digits C. I go from Kylen digital insights as both our discovery and clinical portfolios delivered strong performance.

Speaker Change: The positive momentum in Q di is an encouraging signal S. H works works through the transition to Sars subscription models from longer term licensing agreements, particularly with pharma customers turning to.

Speaker Change: Two 9% at constant exchange rates supported by strong performance in the U S, Canada, and Latin America, the EMEA region delivered 8% growth at C. R, reflecting board based contribution across key markets. The.

Roland Sackers: The EMEA region delivered 8% growth at CEA, reflecting broad-based contribution across key markets. The top-performing countries included Germany and Italy, as well as the Middle East. Asia-Pacific experienced a modest decline, primarily driven by ongoing weak trends in China, a country that only represents about 3-4% of total sales. but still saw a high TCER decline over the same period in 24. This overshadowed expansion in other countries, in particular, solid single-digit growth in Japan.

Speaker Change: As well as the Middle East Asia Pacific experienced a modest decline primarily driven by ongoing week trends in China, a country that only represents about 3% to 4% of total sales, but still saw a high teens C. R decline over the same period.

Speaker Change: This overshadowed expansion in other countries in Partilled in particular solid single digit growth in Japan.

Roland Sackers: Turning to cash flow, we generated $140 million in operating cash flow during the first quarter compared to $133 million in the first quarter of 2014. The results were even stronger, given that the 25 results included about $90 million of cash payments for the efficiency initiatives. Free cash flow was $96 million, reflecting planned investments into targeted digital transformation initiatives. This includes the upgrade of our SAP system that is moving into the implementation phase this year. We continue to see improvements in working capital management based on solid operational control. As an example, we saw another improvement in accounts receivable as the days of sales outstanding stood at 55 days in the first quarter compared to 58 days in the year-ago period.

Speaker Change: Sorry to cash flow, we generated $140 million in operating cash flow during the first quarter compared to $133 million in the first quarter of 24. The results were even stronger given that the 25 results included about nine.

Speaker Change: Of cash payments for the efficiency initiatives free cash flow was $96 million, reflecting planned investments into targeted digital transformer transformation initiatives. This includes upgrade of our S. S. P system that is moving into the.

Speaker Change: Face Cyclia, we continue to see improvements in working capital management based on solid operational control as an example, we saw another improvement in accounts receivable as a days of sales outstanding stood at 55 days in the first.

Speaker Change: Days in the year ago period.

Roland Sackers: Inventory days also improved to 175 days for the first quarter of 25 compared to 221 days in the same period of 24 as we continue to closely monitor supply chain trends in this environment to ensure adequate customer product availability.

Speaker Change: Inventory days also improve to 175 days for the first quarter of 25 compared to 221 days in the same period of 24 as we continue to closely monitor supply chain trends in the environment This environment to ensure.

Roland Sackers: In terms of capital allocation, as noted in our earnings release, we are proposing to introduce a cash dividend to provide a new avenue for increased shareholder returns while preserving flexibility to reinvest in long-term growth. The initial annual dividend payment would be $0.25 USD per ordinary share. We also seek shareholder approval for a new share repurchase authorization. This is complemented by our team's reviewing opportunities for value-creating M&A that strengthen our portfolio and will create new opportunities to enhance our growth profile. In essence, our strong financial position gives us the possibility to invest in strategic initiatives for future growth while expanding our range of ways to increase returns to shareholders.

Speaker Change: In terms of capital allocation as noted in our earnings release, we are proposing to introduce a cash dividend to provide a new avenue for increased shareholder returns, while preserving flexibility to reinvest in long term growth.

Speaker Change: Payment would be 25 cents U S dollar per ordinary share. We also seek shareholder approval for a new share repurchase authorization.

Speaker Change: To this complimented by our teams reviewing opportunities for value, creating M. A that strengthen our portfolio and will create new opportunities to enhance our growth profile in essence, our strong financial position.

Speaker Change: Strategic initiatives for future growth, while expanding our range of ways to increase returns to shareholders with that let me hand, the call back to three.

Roland Sackers: With that, let me hand the call back to Thierry. Thanks a lot, Roland.

Thierry Bernard: And let's now look at the progress across our product portfolio, starting, of course, with sample technology. As you have probably read, we are preparing for the next wave of automation with the planned launch of three new instruments at KIA Kaya Symphony Connect, Kaya Music. and Kaya Sprint connect.

Speaker Change: Three months at Kayajan Kaya Symphony connect Kayami and Kaya spring connect first.

Thierry Bernard: Kaya Symphony Connect is our next generation flagship system and this is set for a phased launch starting end of 2025. AyaSymphony Connect combines enhanced automation, digital connectivity, and expanded application flexibility, for example, for liquid biopsy customers. We plan to introduce Cayamini. to serve low-throughput labs and Kaya Spring Connect to address high-throughput demands with up to 600 samples per day. Early access users have already shown very strong interest for those solutions.

Speaker Change: Expanded application flexibility for example for liquid biopsy customers in 2026, we plan to introduce Kaya mini to serve low throughput labs, and Kaya spring connect to address high through Putins.

Speaker Change: Up to 600 December per day.

Speaker Change: Early access users have already shown very strong interest for those solutions together those innovation will strengthen and expand our leadership in automated sample preparation by offering comprehensive and scalable solution to meet customer need.

Thierry Bernard: Together, those innovations will strengthen and expand our leadership in automated sample preparation by offering comprehensive and scalable solutions to meet customer In terms of supporting public health, and once again in sample tech, we recently launched the ChiaPrepaNEM Plasmodium Kit. This uses our proven liquid-based sample prep method as a new way to help research and surveillance of this global health threat, especially in areas with limited health care infrastructure.

Speaker Change: In terms of Subporting public health and once again in Sampertec, We recently launched the Kayaprepanem plus Modum kit.

Speaker Change: Please use our proven liquid based sample prep method as a new way to help research and surveillance of this global health threat, especially in areas with limited healthcare infrastructure.

Thierry Bernard: Second. Turning to QuantiFERON, our market-leading blood-based test for latent tuberculosis detection. Qiagen remains very confident. in our ambition to reach at least 600 million sales by 2028 for Quantico. We have continuously improved and invested in current different developments. It is now in its fourth generation. We are obviously not stopping here, and we are already preparing the fifth generation version. The 5th generation version of QuantiFerron will bring further improvements in automation, throughput and workflow efficiency. To continue to increase conversion well beyond the current 40% level in the market for the time being.

Speaker Change: Our market, leading blood based test for late on Tuberculosi detection, Ken remains very confident in our ambition to reach at least six 100 million sales by 2028 for.

Speaker Change: We have continuously improve an invested in quantifation. We are obviously not stopping here and we are already preparing the fifth generation version the fifth generation of.

Speaker Change: We'll bring further improvements in automation throughput and workflow efficiency over time, we believe there is a clear opportunity to continue to increase conversion well beyond the current 40% level in.

Thierry Bernard: Kayastat Diagnostic, our syndromic testing platform that continues to expand its American presence. Earlier this year, we received FDA clearance for the second Kiastat GI mini-panel, gastrointestinal, targeting five key bacterial pathogens. Designed for outpatient care, this panel complements the previously cleared bacterial and viral versions, providing fast results with very minimal hands-on time. Our Portfolio for Chaos now includes all three major American syndromic panels, respiratory, gastrointestinal, and meningitis. And we have, on top of that, in the U.S., three mini-panels tailored to outpatient. With those options, Kayastat is very well positioned to meet rising demand for flexible and rapid syndromic testing.

Speaker Change: Keep bacterials Patogens design for outpatient care. This panel complements the previously cleared bacterial and viral versions, providing fast results with very minimal hands on time.

Speaker Change: Our portfolio for Kayastat now includes all three major American syndrome panels, respiratory Gastrointestinone and Mengitis and we have on top of that in the U S free mini panel.

Speaker Change: That is very well positioned to meet rising demand for flexible and rapid syndrome testing for both hospital, but also outpatient settings moving to Kayaki now our digital PC R platform that continues to deliver.

Thierry Bernard: for both. but also outpatients.

Thierry Bernard: Moving to Kayakuiti now, our digital PCR platform that continues to deliver innovation but also market shares and growth. We started 2025 with a major and significant upgrade. Kayakwiti now supports the simultaneous detection of up- 12 targets from a single biological sample. more than double the capacity we had. This expanded multiplexing capability is helping researchers across applications like translational research, microbiome analysis, pathogen detection, and the development of cell and gene therapy. By saving time, reagents, and precious sample material, Kayakwiti is making laboratory workflows more productive and cost-effective. and it definitely strengthens our position into the digital PCR model.

Speaker Change: Equity now supports the simultaneous detection of up to 12 targets from a single biological sample more than double the capacity we had before this expensed multiplexing capacity is.

Speaker Change: Researchers across application like translational research Microbiomesis, Patogens Detections and the development of cell engine therapies by selling time reagents and precious sample material.

Thierry Bernard: We are all... on track to launch at least another 100 new assays in 2025. Building on an already strong portfolio expansion in 2024 that has been a contributor, obviously, to the strong uptake and growth in As part of this new wave of assays, our teams recently launched the first new cell and gene therapy assays of the year, including our first assay dedicated to Lantivirus applications. This is really a very strong start to our 25 menu experiments. This definitely helps strengthen our install base, broadens use cases, as well as customer reach. and support our competitive market shares in digital parking.

Speaker Change: Part of this new wave of assays. Our teams recently launched the first new cell engine therapy assays of the year, including our first asset dedicated to Lentivirus application. This is really a very strong start to five mi.

Speaker Change: This definitely helps trend our install base broadens use cases, as well as customer reach and support our competitive market shares in digital Pcr.

Thierry Bernard: Closing with QIAGEL Digital Insights, our bioinformatics business that continues to strengthen its global reach. As you have seen, we recently opened a new data center in Melbourne, Australia, expanding our secure cloud infrastructure to eight global sites. This investment enhances our presence in the regions by enabling compliance. with local regulation, and also advancing clinical next generation sequencing. So, as you can see, with those efforts... QDI, Qiagen Digital Insights, is well positioned to continue to support the growing demand for bioinformatics solutions in both research and clinical settings.

Speaker Change: Closing with Skyajed digital insight, our bio informatic business that continue to strengthen its global reach as you have seen we recently opened a new datacenter in Melbourne, Australia spending our secure cloud.

Speaker Change: [noise] this investment enhances our presence in the regions by enabling compliance with local regulation and also advancing clinical next generation sequencing adoptions. So as you can see with those efforts to.

Roland Sackers: And now once again, back to Roland with the details on our out. Thank you, Thierry. Let me now provide some more perspectives on our outlook for 2025 and the second quarter. Our ambition remains clear to deliver another year of solid, profitable growth and continued improvement in operational profitability. For the full year, we are reaffirming our outlook for net sales growth in 2025 of about 4% at CER. This reflects about 5% CER growth from our core portfolio that excludes the discontinued Neumode X and DynaLinux products. Given the current volatility, we remain conservative about the revenue growth for the second half of the year but could well increase our net sales guidance once we have more visibility on the macro trends.

Speaker Change: [noise]. Thank you let me now provide some more perspectives on our outlook for 25, and the second quarter, our ambition remains clear to deliver another year of solid profitable growth and continued improvement in operational.

Speaker Change: For the full year, we are reaffirming our outlook for net sales growth in 25 of about 4% at C. R. This reflects about 5% C. R growth from our corporate folio that excludes the discontinued non moodyche and Dina Lunax products Givens.

Speaker Change: We remain conservative about the revenue growth for the second half of the year, but could well increase our net sales guidance. Once we have more visibility on the microtrends on adjusted earnings per share. We are reaffirming the recently upgraded target for about two dollar and 30.

Roland Sackers: On adjusted earnings per share, we are reaffirming the recently upgraded target for about $2.35 at constant exchange rates. This reflects about 8% CER growth compared to 2024, supported by operational margin expansion, while also accounting for the current tariff environment and a better-than-expected adjusted tax rate versus the beginning of 2025. For the second quarter of 2025, we are targeting net sales growth of at least 5% at constant exchange rates. This translates to at least 5% CAR growth in our core portfolio, excluding discontinued Neumody X and Dialunox products. Adjusted earnings per share are expected to be at least $0.60, up from results of $0.55 in the year-ago period, and another solid improvement.

Speaker Change: At cons.

Speaker Change: For the second quarter of 25, we are targeting net sales growth of release, 5% at constant exchange rates. This translates to an at least 5% C. R growth in our corporate folio, excluding discontinued Normothy X and Dialunux products adjusted.

Speaker Change: I expect it to be at at least 60 cents up from results of 55 cents in the year ago period, and another solid improvement turning briefly to currency trends. This have improved since the start of the year and we now expected.

Roland Sackers: Turning briefly to currency trends. These have improved since the start of the year, and we now expect less headwind given the current US dollar trends against the euro and other key currencies. For the full year, we now expect currency movements to be neutral on net sales and a negative impact of about 1 to 2 cents on adjusted earnings per share, so slightly better than the assumption from the start of the year. For the second quarter, we anticipate a positive impact on net sales of about one percentage point and neutral currency movements on adjusted earnings per share.

Speaker Change: S Hedwin given the current U S dollar trends against the Euro and other key currencies for the full year. We are now expect currency movements to be neutral on net sales and a negative impact of about one to two cents on adjusted earnings per share so slightly better.

Speaker Change: For the second quarter, we anticipated positive impact on that sales of about one percentage point and neutral currency movements on adjusted earnings per share overall, our guidance reflects a balance view of both so opportunities and.

Roland Sackers: Overall, our guidance reflects a balanced view of both the opportunities and challenges in today's macroeconomic environment. Our results for the first quarter and the latest reviews with our teams give us confidence in our strategy, our execution, and our ability to deliver on these targets.

Speaker Change: Mike like economic environment, Oh results for the first quarter. It's the latest reviews with our teams give us confidence in our strategy, our execution and our ability to deliver on this targets I would like to.

Thierry Bernard: I would like to now hand back to Thierry. Thanks a lot, Roland, Domenica and John. And as usual, to all of you, we are very respectful of your time.

Dominican: Thanks, a lot Dominican John and as usual to all of you. We are very respectful of your time. So let me very quickly summarize before we move to the QA part first we delivered a very good and solid start to 2020 part.

Thierry Bernard: So let me very quickly summarize before we move to the Q&A part. First, we delivered a very good and solid start to 2025, exceeding our outlook for both net sales and adjusting earnings in the first quarter. Our highly recurring revenues account for about 90% of our total sales and are a key foundation for growth, even in this macro environment where customer spending remains kosher. We were especially very pleased with the strong contribution from Kayastat and from Quantiferon and the momentum gain in Kayakwit . together with the robust performance of Qiagen Digital Institute. Those successes, along with our Efficiency Initiative, Drove a significant improvement in our adjusted operating income margin and supported another quarter of very strong cash flow generation.

Dominican: You are especially very pleased with a strong contribution from Kayastat and from Quantifi together with the robust performance of Kay AGEN digital inside those successes along with our efficiency.

Dominican: Improvement in our adjusted operating income margin and supported another quarter of very strong cash flow generation, we have reaffirmed our recently upgraded target for adjusted earning and also reaffirmed our full year 25.

Thierry Bernard: We have reaffirmed our recently upgraded target for Adjusted Earnings and also reaffirmed our full-year 25 targets for Net Efficiency. This is combined with our commitment for further significant margin expansion as we move above 30% this year. And our financial strength and operational flexibility gives us increasing conviction in our ability to deliver on our 2028 commitments for solid, profitable growth and stronger shareholders return.

Dominican: [noise]. This is combined with our commitment for further significant margin expansions as we move above 30% this year and our financial strength and operational flexibility gives us increasing conviction in our ability to.

Dominican: 2028 commitments for solid profitable growth and stronger shareholders return that said back to John and the operator for the QA session. Thank you.

John Gilardi: That said, back to John and the operator for the Q&A session. Thank you.

Speaker Change: [noise], ladies and gentlemen at this time, we will begin the queue question and answer session anyone who wishes to ask a question May press star followed by one on their Touchstone telephone if you wish to withdraw. Your question you May Press Star followed by two to ensure we can accommoda.

Operator: 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 their touchtone telephone. If you wish to withdraw your question, you may press star followed by two. To ensure 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 you finish asking your question. Anyone who has a question may press star followed by one at this time.

Speaker Change: Please limit yourself to only one question and if necessary one follow up your microphone will also be muted. After you finish asking your questions anyone who has a question May press star followed by one at this time.

Dan Leonard: One moment for the first question, please. The first question comes from Dan Leonard of UBS.

Speaker Change: One moment for the first question please.

Speaker Change: The first question comes from Dan Leonard of U B S. Please go ahead Mr. Leonard. Thank you very much I'll keep it to one was hoping you could elaborate a bit further on what drove the acceleration in quantif.

Dan Leonard: Please go ahead, Mr. Leonard. Thank you very much. I'll keep it to one. I was hoping you could elaborate a bit further on what drove the acceleration in QuantiFERON in the quarter. I know you mentioned skin test conversion, but that's a trend that's been underway for a couple decades. So perhaps there's some additional color on the quarter performance specifically. Thank you.

Speaker Change: But that's a trend that's been underway for a couple of decades. So perhaps there's some additional color on the quarter performance specifically thank you.

Thierry Bernard: Thanks a lot, Dan.

Thierry Bernard: And no, there is no specific event. It's just a confirmation of our strategy, strategy based on As we said today, we are at a fourth generation of product. We definitely have proven reliability and quality. You have seen in our recent deep dive on QuantiFerron the number of citations, the number of publications taken The value of our partnership for automation with not only Diacerin, but also TKAN, Hamilton. And all this together reinforces the continuous global performance of quantiFERON and I insist on global, it is growing all over the world, in North America, Europe, Middle East, Asia Pacific.

Speaker Change: Proven reliability and quality you have seen in our recent deep dive on Quantif.

Speaker Change: The value of our partnership for automation is not only the yacerine, but also ticken Hamilton and all these together reinforces the continuous global performance of quantifier and I insist on global it is growing all over the world in no.

Speaker Change: Thanks Terry.

Unknown Executive: Thanks, Thierry.

Speaker Change: The next question comes from Doug Schinkel of Wolf Research. Please go ahead, Mr. Schinkel, Hi, good morning, Good afternoon, everybody and thank you for taking the questions. So just a couple on guides.

Doug Schenkel: The next question comes from Doug Schenkel of Wolf Research. Please go ahead, Mr. Schenkel. Hi, good morning. Good afternoon, everybody. And thank you for taking the questions. So just a couple on guidance.

Doug Schenkel: Given Q1 strength and given how you're guiding Q2, Our math suggests that, you know, essentially, you're assuming a deceleration and top line growth to around 4% in the second half. I definitely could be doing the math wrong, but if I'm not, I just want to see if there's, you know, something you're seeing that's moderating from a growth standpoint. It doesn't sound like that's the case. So you're really cutting through all of this. Is this just prudent conservatism in the current environment?

Speaker Change: Given Q1 strength and given how you're guiding Q2, our math suggests that you know essentially you're assuming a deceleration in top line growth to around 4% in the second half I definitely could be doing the.

Speaker Change: Not I just want to see if there's you know something you're seeing that's moderating from a growth standpoint, it doesn't sound like that's the case, so you're really cutting through all of this is this just prudent conservatism in the current environment. So that that's the first question and then.

Doug Schenkel: So that's the first question. And then the second is, you know, again, on guidance, you're maintaining your 4% constant currency outlook for the full year at the top line. You know, recognizing how the environment has changed over the last few weeks and few months. Are there specific areas that we should be thinking of that are doing better than original plan? And then, you know, if so, what are the offsets? Thank you.

Speaker Change: Is you know again on guidance, you're maintaining your 4% constant currency outlook for the full year at the top line you know recognizing how the environment has changed over the last you know few weeks and few months are there specific areas that we should be thinking of.

Speaker Change: Better than original plan and then you know if so what are the offsets. Thank thank you very much.

Thierry Bernard: Thank you very much. So Doug, thanks a lot. You call that conservatism.

Speaker Change: So dog. Thanks, a lot you you call that conservatism I would I would call it realistic ambitions.

Thierry Bernard: I would call it realistic ambition. Your math is not necessarily wrong, but you have also seen that. The volatility in our economic environment, or geopolitical environment, has not... Thank you.

Speaker Change: Your mouth is not necessarily wrong, but you have also seen that the volatility in our economic environment or geopolitical environment has not improved not at all so we are still living in a kind of an operating in.

Thierry Bernard: This is why we prefer to remain prudent. But obviously, as soon as we have more visibility.

Speaker Change: And this is why we prefer to.

Speaker Change: Remain prudent, but obviously as soon as we have more visibility.

Thierry Bernard: We will not hesitate to upgrade and update our top line also guidance but we need to have more weeks of visibility behind us before doing And so on the guidance for 4%, which is 5%, excluding dialogues and mnemonics diversity. taking into account that volatil- taking into account and weathering the current discussions or debates around tariffs in the world, for example. At the same time, factoring the still cautious environment on spending, especially for capital sales, factoring also the discussion around research funding in different countries of the world, but also leveraging the very good start of quantity.

Speaker Change: We will not hesitate to upgrade and update our top line also guidance between have more weeks of visibility behind us before doing this and so on the guidance for 4%, which is 5% exci.

Speaker Change: At the same time factoring the still cautious environment on spending, especially for capital sales factoring also the discussion around research funding in different countries of the world, but also leveraging the very good start of Quantif.

Patrick Donnelly: of Kayastat of QDI and the good performance of Kayakwiti in The next question comes from Patrick Donnelly with Citi. Please go ahead, Mr. Donnelly. Yeah. Hi, Patrick.

Speaker Change: The next question comes from Patrick Donnelly with Citi. Please go ahead Mr. Donnelly.

Patrick Donnelly: A ton of exposure there, but can you just talk through what you're seeing on that front and what the impact could be.

Speaker Change: Yeah, Hi, Patrick.

Thierry Bernard: I think overall, just to put things in perspective, as you know, it's clearly a very volatile environment, and I'm quite sure there will be more changes. And by the way, there's one of the points to use just ways that there's nothing company specific, which will change the direction. Right now, we really are a bit more conservative right now, in terms of the outlook for the year. Same as two years on the tariff side, we feel actually that we were well prepared moving into that year. As you know, we went up quite early, our inventory levels, we reviewed our supply chain in ways, we clearly looked on also a couple of company processes.

Speaker Change: A bit more conservative right now in terms of the outlook for the year same as two year on the tariff side, we feel that actually that we were well prepared moving into that year. We went up quite early our inventory levels, we reviewed our suppl.

Speaker Change: We clearly looked on auto a couple of company processes, all of that which I think allowed us to mitigate most of this impact which we right now seeing this clearly also the benefit that we are working closely with our.

Roland Sackers: All of that, which I think allowed us to mitigate most of this impact, which we right now see, there's clearly also the benefit that we are working closely with our customers in sharing some of this impact. At the same time, I think it's also very fair to say that we see right now also a somewhat lower tax environment in general, which is helping us not only to compensate, but as you have seen with our guidance increase on the EPS side, even overcompensating for the impacts we see on the tariff side. Have in mind that we do not have anything material from China into the US, that is nothing but is important for us.

Speaker Change: It's the same time I think it's also very fair to say that we see right now also somewhat lower tax environment in general, which is helping us not only to compensate but as you have seen with our guidance increase on EPS side, even overcompensating for the.

Speaker Change: [noise] have you mind that we do not have anything material from China Enthusias that is nothing but is important for us as you know from the U S into China right now in general that is something that is not really material and therefore would say for us.

Roland Sackers: As you know, from the US into China right now, in general, that is something that is not really material. Therefore, I would say for us, it is really something which we were so far very well able to manage, which is US to Europe.

Speaker Change: Well, so far very well able to manage which is U S to Europe, yes.

Roland Sackers: Up to you, Octavio. Sorry. Yeah, no. Yeah, that's helpful, Roland. Thanks.

Speaker Change: That's helpful. Thanks, maybe a quick one just on the margin levers for this year. The expansion has been been pretty healthy can you just talk about the levers as you work your way through the year on the margins just the puts and takes and again, how we should think about the progression of the year goes. Thank you.

Unknown Executive: And then maybe a quick one just on the margin levers for this year. You know, the expansion has been pretty healthy.

Roland Sackers: Can you just talk about the levers as you work your way through the year on the margins, just the puts and takes, and again, how we should think about the progression as the year goes? Thank you. Yeah.

Roland Sackers: Thanks for that question, because I think it allows me also to re-emphasize one important message. As you know, we, on the one hand side, we said before that we discontinued Neuromodics in particular last year, but this only accounts for somewhere around 40 to 45% of the overall margin improvement. I think Thierry, in one of the earlier calls, alluded to that we have actually ongoing, what we call QIA, margin efficiency programs, and they are actually adding up quite nicely. That goes all the way from digitization initiatives, as you know, we also, to a certain extent, reorganized the company end of last year, and this all is helping actually quite nicely to improve margin.

Speaker Change: Thanks for that question because I think it allows me also to we emphasize one important message as you know we on a one side, we said before that we discontinued knowing more the access in particular last year, but this only accounts for somewhere on 40.

Speaker Change: 45% of the overall margin improvement I think three in one of the earlier calls alluded to that we have actually ongoing what we call Kaya kaijin efficiency programs and they are actually adding up quite nicely that goes all the way from digital.

Speaker Change: Initiatives as you know we also did a certain extent we organize reorganize the company end of last year and this all is helping actually quite nicely to improve margin. So we expect also clearly for this year to end up.

Roland Sackers: So, we expect also, clearly for this year, to end up north of 30%, and again, outside any larger, whatever, tariff, macro impact, which might or might not happen. But in the environment which we are seeing right now, I think we feel very confident that we stay north of 30%, and clearly expanding from that level also going forward.

Speaker Change: Again outside any larger whatever impact, which might or might not happen, but in that environment, which we're seeing right. Now I think we feel very confident that we stay north of north, 30% and clearly expanding from that level also going forward.

Speaker Change: Our next question comes from Tycho Peterson of Jefferies. Please go ahead and put Mr. Peterson, Hey, Thanks academic and government's obviously been a pressure point, we've seen most of your peers kind of recalibrate expectations for the year just.

Tycho Peterson: Our next question comes from Tycho Peterson of Jeffries. Please go ahead, Mr. Peterson. So, thanks Tycho, I mean, so first of all... As you know, 90% of our revenues are coming from consumables. And I believe, therefore, that with this, we are... Probably a bit less exposed. Huge cuts in academia and research, but obviously like any company involved in research and academia. We feel that there is a slow environment and we remain cautious. That drives, by the way... When I answered the questions from Doug, why we continue to maintain our guidance, it's just being cautious because the environment is not moving that fast.

Speaker Change: So thanks, Tyko I mean, so first of all.

Speaker Change: As you know 90% of our revenues are coming for consumables. So so I believe therefore that with this we are probably a bit less exposed to a huge cuts in academic and research, but obviously like any company involved in.

Thierry Bernard: That being said, I believe that we are a bit more protected. And I believe also that most of ourselves in research and academia are still mainly around sample take. And those are expenses that are very difficult to completely eliminate.

Speaker Change: Being said I believe that we are a bit more protected and I believe also that most of our sales in research and academia are still mainly around sampletech and those are expensive that are very difficult to completely eliminate for capital sales.

Thierry Bernard: for Capital Sales. Our assumption continues to be that we should see a level of normalization in the second half of the year or early 2026. Obviously, it's very difficult to predict that. We continue to say that there is a normal cycle of renewal in instruments in labs. It's very difficult to say exactly or to know when it's going to happen. But we believe it has to normalize at a certain point in the coming.

Speaker Change: I would have assumption continues to speed that we should see a level of normalization in the second half of the year or early 2026 of you see it's very difficult to predict that.

Speaker Change: We continue to say that there is a normal cycle of Renewarding instruments in labs is very difficult to say exactly or to know when it's going to happen, but we believe it has to normalize at a certain point in the coming months.

Roland Sackers: Roland, do you want to take the second part of the question? Yeah, again, just to add on that, on the instrumentation side, of course, have in mind also that most of our instruments clearly have price points, which are probably for instruments on the lower side. So that's clearly also helpful. And you see particular Kayastat and also Curity doing quite well. And again, I don't see any reason that that should change over the course of the year. In general of upsides, I think you have seen where we started very well and strong into the year from Kayastat, where, again, what is really driving that is the manual expansion.

Speaker Change: Hold on do you want to take the second part of the question. Yeah again, just to add on that on the implementation set of course have in mind also that most of our instruments clearly have price points, which are poly for instruments on the lower side. So that's clearly also helpful and you see particular Kayastad and also.

Speaker Change: And again I don't see any reason that that should change over the course of the year in general of upside I think you have seen where we started very well and strong into the year from Kaya start where again what is really driving that is the menu expansion as you know we got.

Roland Sackers: As you know, we got a significant number of products approved last year through the FDA, and that clearly helps us not only in the U.S., with Gastro and Meningitis, to expand on that, you know, the larger instruments going online. So there's a lot of things being helpful. We added menu quite nicely to the Curity. You know, we added 100 panels last year. We're going to add another 100 panels this year. Therefore, the consumer pull-through continues to be quite strong. So I would say it's a mix of new launches and clearly also what we believe that the focus, which I think KIAGEN now is driving since quite some time, still pays off.

Speaker Change: Not only in U S website, gastro and Menagitis to expand on that you know the larger instruments going online. So there's a lot of things being helpful. We added menu quite nicely to the kind of Qt you know that we added peneline.

Speaker Change: I'm still pays off.

Speaker Change: And our next question comes from Michael Riskin Bank of America. Please go ahead, Mr. Riskin, great. Thanks for taking the question I think tyco touched on NIH or sorry, adding one of the earlier questions touched on NIH and government policy what.

Michael Ryskin: And our next question comes from Michael Ryskin, Bank of America. Please go ahead, Mr. Ryskin. Great, thanks for taking the question. I think Tycho touched on... NIH, or sorry, I think one of the earlier questions touched on NIH.

Michael Ryskin: I'm going to talk a little bit about the pharma. I'm just curious if you're seeing anything different in budgets relative to how you were going. and I'll throw in my second.

Speaker Change: Biotech on market, what you're seeing there I think it's been a little bit weaker to start the year, obviously, there's still a lot of noise and there's tension for more noise from.

Speaker Change: From ongoing discussions or from pharma specific tariffs just curious if you're seeing anything different in budgets relative to how you we're going into the year and I'll I'll throw in my second one at the same time the capital deployment front you know the initial.

Michael Ryskin: Capital Deployment Front Initiation of the Dividend, a little bit more color. Just curious, you know, how you're going to balance capital Those are good questions, Michael. Thanks a lot.

Speaker Change: Allocation priorities between those two and M. A going forward just give us tiering. Thanks, Michael Thanks, a lot on the pharma side I would say on direct.

Thierry Bernard: On the pharma side, I would say. on direct. We are pleased with the performance of especially solutions like Kayak. Pharmacy. This is where we get the best. on our large throughput KayakWiki system. 8 plate. We don't see any specific downgrading of the... What I would say, what we believe is encouraging is that we see a growing appetite again of pharma companies for companion diagnostics. This is a good activity for Qiagen. This is where we are probably the leader in the world.

Speaker Change: Testing sales, we are pleased with the performance of of especially solutions like Kayaki on the pharma side. This is where we get the best pool through on our large throughput kayaki system, we call. It the eight plate system. So.

Speaker Change: Downgrading of the situation here, what I would say what we believe is encouraging is that we see growing appetite again of pharma company for company and diagnostic and you see that this is a good activity for K agent. This is where we are probably the world.

Thierry Bernard: We are the only company offering pharma companies And you solved our problem of discrimination and bureaucracy, We have solution, and not only on the PCR diagnosed, but also, NGS companion diagnostics, and also, digital PCR, and you have seen recently that we have opened contracts on Kaiakstat. So, we see a pretty good demand here, and we are pretty confident that this On capital allocation, we continue to try to optimize the management of our healthy balance sheets. As you know, we have three priorities. First of all, investing into our organic growth, which is R&D. Qiagen maintains a healthy investment on R&D ratio to sales.

Speaker Change: The offering pharma company with solution.

Speaker Change: Not only on P. C. R company Diagnosic, but also N G. S companion diagnostic and also digital P. C. R. And you have seen recently also that we have open.

Speaker Change: So we.

Speaker Change: First of all investing into our organic growth, which is R and D. Kayagen maintains healthy investment on Rd ratio to sales, it's around 9% to 10%. It's a good ratio, but we always need to make sure that that ratio is paying off.

Thierry Bernard: It's around 9 to 10 percent. It's a good ratio. but we always need to make sure that that is paying off and that we have good return factors from those research and development investments.

Speaker Change: Return factors from those research and development investment second the new announcement of share buybacks are just proving our active listening to investors and to analysts. Many of you have been telling us for the last years that.

Thierry Bernard: New announcement of share buybacks are just proving our activity. to our investors and to analysts. Many of you have been telling us for the last years that dividends could open up our stock price to different kind of investors. We listened. We took our time and we decided to come with that. We perfectly understand that it's a long term. And the increase to up to 500, it's an authorization. That doesn't mean that it's going to happen on the given date. We said that we have 18 months to deploy that. But it's also that confirmed vision and willingness to return the appropriate level of capital to our shareholders.

Speaker Change: I was surprised to different kind of investors. We listened we took our time and we decided to come with that policy and we perfectly understand that it's a long term policy as well and the increase to up to 500, it's an authorization that doesn't mean that.

Speaker Change: Happen on the given date, we said that we have 18 months to deploy that but it's also that confirmingness to return the appropriate level of capital to our shareholders. They deserve that and we believe also in in our company first.

Thierry Bernard: They deserve that. And we believe also in our.

Thierry Bernard: Third, it's M&A, it's not one against the other or it's not that M&A is going to become less of a priority, we believe in M&A to create value, it has to be synergistic with our current portfolio.

Speaker Change: It's not one against the other or is not that MA is going to become less of a priority. We believe in MA to create value. It has to be synergistic with our current portfolio, we mainly focus on.

Thierry Bernard: We mainly focus on what we say Bolton or what we call Bolton and I would invite you to stay tuned because we have a very very good pipeline and I think we are in a position potentially to close some of those M&A in the coming And our next question comes from Jan Koch with Deutsche Bank. Please go ahead, Jan. and thanks for taking my My first question is on sample pack. What kind of growth should we assume over the coming quarters, given that the comms are actually getting a bit tougher? And do you expect a catch up in instrument sales once you have launched the new Q2.

Speaker Change: What we say bold on what we call Bolton and I would invite you to stay tune because we have a very very good pipeline and I think we are in a position potentially to close some of those MA in the coming weeks.

Yan: And our next question comes from Yonkoke with Deutsche Bank. Please go ahead Yan. Good afternoon. Thanks for taking my questions. My first question is on Sampletec, what kind of growth should we assume over the coming quarters given that actually.

Speaker Change: [noise] and do you expect a catch up in in instrument cells. Once you have launched then you instruments driven by by Pent up demand and then secondly on on 24 on could you remind us of the market potential you are seeing in China, given that China is not really a focus market for your partner.

Jan Koch: Could you remind us of the market potential you are seeing in China? Given that China is not really a focus market for your partner, do you believe that the installed base of instruments in China is sufficient to grab that market opportunity once you receive the necessary funds? Thanks a lot, Jan.

Speaker Change: Of instruments in China is sufficient to grab that market opportunity once you receive the the necessary approval.

Speaker Change: Thanks, a lot Ian on sample take this is a strategy, but let me highlight something what the current numbers are not really showing is that where we have decided to clearly put the research and development a ford in what.

Thierry Bernard: On SampleTech, this is a strategy, but let me highlight. What the current numbers are not really showing. is that where we have decided to clearly put the research and develop and what we call the high-value sample tech application like liquid biopsy. Microbiome Research. We are growing and we are in some of those fields growing at double digit and this is exactly where we want Second, to your point, obviously, there is no other competitor in SampleTek with such a program of investment into new systems, and it's not new, it has started three years ago when we started to upgrade Kayakube with Kayakube Connect, EZ1 to EZ2, and now we have those free launchers.

Speaker Change: Value simple take application like liquid bioc minimal residual diseases.

Speaker Change: Michrobiome research, we are growing and we are in some of those fields growing at double digit and this is exactly where we want to go second to your point. Obviously there is no other competitor in San Pertec with such a program.

Speaker Change: Of investment into new system, and it's not new it has started three years ago. When we started to upgrade kayaku with Kayaku connect is it one two is it to and now we have those free launchers. So all these together.

Thierry Bernard: So all these together, makes us believe that the guidance that we gave you in New York during our Capital Market Day last year in June to come back to a growth of around 3% per year is really a QuantiFERON® in China is the leading blood-based test for latent We have many competitors that are very local, that are not elsewhere but in China. It is not our top priority. We will bring the workflow of automation. Diasurin to the Regulatory Authorities, but The growth of quantiFERON absolutely does not depend on the performance in China. I would not qualify China as a priority for quantiFERON.

Speaker Change: Makes us believe that the guidance that we gave you in New York during our capital market day last year in June to come back to a growth of around 3% per year is really achievable to quantifiero in China honestly and.

Speaker Change: We have many competitor that are very local that are not elsewhere, but in China. It is not our top priority, we will bring the workflow of automation with diasurin to the regulatory authorities, but.

Speaker Change: Absolutely does not depend of the performance in China, I would not qualify China as a priority for Quantifun. It's a market. We are using all our presents including with Diasin to continue to take market shares, but this is how we would see it.

Thierry Bernard: It's a market. We are using all our presence, including with diethylene, to continue to take market shares. But this is how we work.

Speaker Change: And our next question comes from Jack Mian with Nephron Research. Please go ahead Jack Your line is open. Thank you.

Jack Meehan: And our next question comes from Jack Meehan with Nefron Research. Please go ahead, Jack. Your line is open. Thank you. Hello, everyone. I wanted to ask about the PCR strength in the quarter through two lenses. First was, you know, if you look, the 14% growth, chi acuity, high single digits, it implies everything else grew in the high teens. So I was just wondering if you'd talk about, you know, why that was so strong. And then on chi acuity, it does, it seems like things are going well on the consumable side, but it does also feel like that prior $105 million target might be a little bit of a stretch, given the instrument environment.

Jack Mian: Hello, everyone I wanted to ask about the P. C. R strength in the quarter through two lenses first was you know if you look the 14% growth Kai Qi high single digits. It implies everything else through in the high teens so it.

Speaker Change: Why that was so strong.

Speaker Change: And then on Kiacuity. It does it seems like things are going well in the consumable side, but it does also feel like that prior hundred 5 million dollar target might be a little bit of a stretch given the instrument environment was just curious you had any update.

Jack Meehan: I was just curious if you had any updated thoughts on that, too. Thank you.

Speaker Change: Thank you.

Thierry Bernard: Jack and so on the first question first of all especially if you compare to What has been disclosed by some competitors, I mean... We are growing in digital PCR. We continue to sell or to place instruments, obviously, given. Thank you all! You have seen from other disclosures that it's not necessarily the case. So on the rest of the PCR portfolio, what was quite interesting and encouraging this quarter was the performance of our OEM cells. And you remember that this is also an activity of Qiagen where we have always said it's difficult sometimes to plan for a growth on a quarterly basis because those are mainly bulk cells.

Speaker Change: Thank you Jack and so on the first question first of all especially if you compared with what has been disclosed by some competitors. I mean, we are growing in digital P. R. We continue to sell or to place instrument of you C.

Speaker Change: Environment on capital expenses of course, we would like to be able to place more but we still grow and we are posting as you said yourself very nice growth in consumable. So we are definitely taking market shares and you have seen from other disclosure that is not necessarily.

Speaker Change: The rest of the P. C. A portfolio what was quite interesting and encouraging this quarter was the performance of our OEM sales and you remember that this is also an activity of Kyagen, where we have always said, it's difficult sometimes to plan for.

Speaker Change: Those are mainly berkselves. So you have some time high quarters lower quarter to quarter. After so overall OEM for us is on a yearly basis, roughly $80 million activities, but it performs very well in Q1 so.

Thierry Bernard: So you have sometimes high quarters, lower quarter, the quarter after. So overall OEM for us is on a yearly basis. Roughly 80 million dollars activities, but it performed very well in Q1.

Thierry Bernard: Now, addressing your, is this a stretch or is there a stretch on kayak? For sure, we acknowledge that the capital sales environment, especially in the research lab of academia, is not healthy. But honestly, Jack, I mean. Solution, Kayakwiti, Staking Marketshares. It has been probably the fastest growing install base ever in diagnostic and life science. We continue to grow in consumables, as Roland said, as we said during this call. I don't judge the efficiency, I will not judge the efficiency of that solution just on a year, let alone on a quarterly basis. We confirm what we told you.

Speaker Change: No I'd resc.

I mean these solution Kayakuti is taking market shares it has been probably the fastest growing install base ever in diagnostic.

Speaker Change: And life Science.

Speaker Change: Continue to grow in in consumables as Roland said as we said during this call I don't judge the efficient I will not judge the efficiency of that of that solution just on a year letter loan on a quarterly basis, we confirm what we told you.

Thierry Bernard: We are on our way to get above $200 million by 2028, and this solution deserves to be the number one on the market on and we confirm that.

Speaker Change: Both $200 million by 2028, and this solution deserves to be the number one on the market on digital P. C R and we confirm that ambition.

Dan Brennan: The next question comes from Dan Brennan with T down. Please go ahead Mr. Brennan.

Dan Brennan: The next question comes from Dan Brennan with TD Cowen. Please go ahead, Mr. Brennan. Great. Thank you. Thanks for the questions.

Dan Brennan: Great. Thank you. Thanks for the questions maybe one for Roland and then Fitri just rolling just back on the tariff math. If you could did you guys ever size, what the gross impact is obviously, you're doing a terrific job offsetting a bit but I'd be interested to see just what that impact is on the growth side if between.

Roland Sackers: Maybe one for Roland and then for Thierry. Just Roland, just back on the tariff math, if you could, did you guys ever size what the gross impact is? Obviously, you're doing a terrific job offsetting a bit, but I'd be interested to see just what that impact is on the gross size. Between Cost Actions and Moving Production and Suppliers. Anything you can share on kind of how you're offsetting that, just a little more detail, since it is just a topic.

Dan Brennan: Production and suppliers anything you can share on kind of how you're offsetting that just a little more detail. Since it is just a topic and then b teary for you on M. A and a prior question that I hear you say something about the next couple of weeks like is there something can you just discuss what the pipeline looks like there and then just finally kind of what.

Thierry Bernard: And then, B, Thierry, for you, on M&A and a prior question, did I hear you say something about the next couple of weeks? Like, is there something? Can you just discuss what the pipeline looks like there?

Thierry Bernard: And then just finally, kind of what are you guys assuming for the rest of the year for Kyostat after the really strong quarter in first quarter? Thank you.

Roland Sackers: Roland, do you want to take the first part? Yeah, thank you, Dan. Yeah, to be honest, I wish I could because the reason why I think it's not as easy for us is because we started actually already quite early last year with some of the mitigation actions. As I said, we changed quite a lot of internal procedures. We really ramped up inventories. And therefore, it is not actually to set a baseline. But I think what is fair to say that our assumption right now is probably that it would be probably a few cents EPS for that period.

Dan Brennan: Why don't you want to take the first spot.

Speaker Change: Yes. Thank you Dan yeah to be honest I wish I could because the reason why I think it's not as easy for US is because we started actually already quite early last year with some of the mitigation extras as I said, we changed quite of internal procedures, we really went up inven.

Speaker Change: The baseline, but I think what is fair to say that that our assumption right. Now is probably that it's would be probably few cents E. P. S for that period as I said is clearly an area, which we were able to say we feel comfortable that that is in that given environment something but we can cover quite nicely and then we have to see what moves, but I would say so far we feel quite comfortable we still look into that it says as I S, where we can improve again a big impact.

Roland Sackers: Nevertheless, as I said, there's clearly an area which we were able to to offset so far. So I would say we feel comfortable that that is in a given environment, something that we can cover quite nicely. And then we have to see where it moves. But I would say so far, we feel quite comfortable. We're still looking into that if there's other areas where we can improve. Again, a big impact for us is clearly also that we are actively working with our customers and explain to them the actual situation. Thank you, Roland.

Thierry Bernard: And to follow up on the question on M&A, what I confirm is that it's clearly one of the top priorities of our capital allocation. As you know, we have a very healthy balance We have a very long lasting experience of M&A, especially Bolton. And I just can tell you that our pipeline is very solid. We are engaged in very discussions that are coming.

Thierry Bernard: Now I hope closing but as you can imagine it always takes two to tango and as long as the signature is not done I don't say anything but yes I confirm that in the coming weeks we should be in a position to communicate on some of those.

Thierry Bernard: On Kayastat, obviously, as you know, this winter has been another, once again, a quite strong respiratory season. We have been Able to answer customer needs here but our growth is not just respiratory all the parameters GI's and meningitis so let me put it like this you It's a strong start and so we confirm our guidance for Kyastat and we believe that it will be double digit at the end of the year.

Speaker Change: Able to answer customer needs here, but our growth is not just respiratory all the parameters gias and Menangitis. So let me put it like this it's a strong start and so we confirm our guidance for Kyostat and we believe that it will be double digit again.

Speaker Change: And the next question comes from Katherine Schulty with Baird. Please go ahead Ms Schulty.

Catherine Schulte: And the next question comes from Catherine Schulte with Bayard. Please go ahead, Ms. Schulte. Hey guys, thanks for the questions. Maybe first on China, I know a small part of your business, but seeing some decent declines there. What does that look like on the diagnostic side versus life sciences? Just be curious if there are any different trends between those two buckets. And my second question would be on QDI. Can you just talk about what you're seeing there? I think you said you grew high single digits in the quarter and you're expecting 15% in that longer term outlook at your investor day.

Katherine Schulty: Hey, guys. Thanks for the questions, maybe first on China, I know a small part of your business, but seeing some decent declines there is what does that look like on the diagnostic side versus life Sciences, which is be curious if there any different trends between those two buckets. My second question would be on.

Katherine Schulty: Can you just talk about what you're seeing there I think you said you grew high single digits in the quarter and you're expecting 15% in that longer term outlook at your Investor day. So just curious if you're still confident on that side. Thanks.

Catherine Schulte: So just curious if you're still confident on that.

Katherine Schulty: So thanks Katherine for the question I mean on China, I think there is no specific change to what we come saying in the last three years.

Thierry Bernard: So thanks, Catherine, for the question. I mean, on China. I think there is no specific change to what we come saying in the last... China is too big of a market to be ignored. and at the same time. and to complex of a market and to risky of a market those days to make it a priority. A very limited percentage of ourselves, Roland spoke about that, at the moment it's at 4%. The market is very specific in the sense that they favor... Local Manufacturing and they will always favor local manufacturing. Diagnostics. But as far as Qiagen is concerned...

Speaker Change: China is too big of a market to be ignored and at the same time, it's too specific and to complex of a market and to risk you of a market those days to make it a priority.

Katherine Schulty: It's very limited.

Katherine Schulty: Percentage of our sales or no spoke about that at the moment, it's at 4%.

Katherine Schulty: Market is very specific in the sense that they favor.

Katherine Schulty: Cold manufacturing and they will always favor local manufacturers it does impact not only life science, but also.

Katherine Schulty: Solutions.

Katherine Schulty: As far as Kayagen is concerned we continue to grow in 20 Feron.

Thierry Bernard: Avery Quok We have more difficulties and we are more impacted by that context that I described on life science and other activities. That's the way. Again, too large of a market to be ignored, too complex, too risky to make it a priority.

Katherine Schulty: Avery quarter, we have more difficulties and we are more impacted by that context that I describe on life science and other activities. That's the way to see it again, two large of a market to be ignored two complex two risky to make it a priority.

Thierry Bernard: QDI, what we are pleased with in Q1, and we communicated that, if you remember, in the deep dive we organized in December. This leading position from Qiagen, I remind you that... At around 100 million dollars, we are the leader on the market. Not only the leader, but we are also a profitable leader, unlike is moving, is evolving to a SaaS business model. said in December that it will take probably a year. start to see that normalization already. What we were pleased with in Q1 is that both activities of QDI, as Roland said, not only clinical, but also discovery, were doing better than Q4 and Q3 of last year.

Katherine Schulty: QDI, what we are pleased with in Q1, and we communicated that if you remember in the deep dive we organized in December this leading position from Kyogen are remind you that at around $100 million. We are the leader on the market.

Katherine Schulty: Also profitable leader and like competition.

Katherine Schulty: He's moving is evolving to a SaaS business model and we took we said in December that it will take probably a year, we start to see that normalization already in Q1, what we were pleased with in Q1 is that both activities of Q.

Thierry Bernard: So this is encouraging. Now, for the ambition for this year, I would put it as a high single digit. That's our objective, and this is what we want to deliver. And I continue to believe that the full normalization and transition to that SAS business model will happen throughout 2019.

Katherine Schulty: Food normalization and transition to that SAS business model will happen throughout 2025.

Katherine Schulty: [noise] and we'll move to our next question from Matt Stykes with Goldman Sachs. Please go ahead. Mr. Sykes. Thank you. Good morning. Thanks for my questions I'll leave it to one just wanted to focus on sample Tech you guys have talked about pretty clearly articulated strategy to improve.

Matt Sykes: And we'll move to our next question from Matt Sykes with Goldman Sachs. Please go ahead, Mr. Sykes. Thank you. Good morning. Thanks for your questions. I'll leave it to one. Just wanted to focus on sample tech. You guys have talked about a pretty clearly articulated strategy to improve growth in that area through the launching of the automated instruments, and you've given us a timeline. I guess my question is, given that timeline and given sort of the CapEx constraints that are currently in the environment from the customer side, do you feel that the value proposition, the cost savings, or higher throughput that you're offering through this automation will help penetrate through maybe a sustained weaker capital equipment environment, so you could still see that acceleration in sample tech as we move through 26?

Katherine Schulty: Instruments, and you've given us a timeline I guess my question is given that timeline and given sort of the capex constraints that are currently in the environment from the customer side do you feel that the value proposition the cost savings are higher throughput your.

Katherine Schulty: Will help penetrate through maybe a sustain weaker capital equipment environment. So you could still see that acceleration in sampletech as we move through 26.

Speaker Change: Wilmat, we believe so this is our assumption because none of those systems are me too.

Thierry Bernard: Well, Matt, we believe so. This is our assumption, because... None of those systems are They all come with innovation, and this is visible to customers. When I said about Kaya Symphony and our customers in LiquidBioC, this is the feedback. I said that Kaya Sprint was already highly regarded by some major pharma potential partners. This is encouraging. Why? Because they bring innovation in cost saving, in time to result, in easy-to-use handling. We believe that this will help us. to bring them to customers and get those. Obviously, if capital expense remains very low.

Speaker Change: The old comes with innovation and this is visible to customers when I said about Kaya Symphony and our customers in liquid Bioc. This is the feedback at the moment I said that Kaya spring was already.

Speaker Change: Bring them to customers and get those contract obviously.

Speaker Change: E for capital expense remains very low we might see some delays around 25 and 26, but over the long run our ambition for 28 remains unchanged because those are instruments that are bringing value and differentiation.

Thierry Bernard: We might see some delays around 25 and 26, but over the long run, our ambition for 28 remains unchanged, because those are instruments that are bringing value and differentiation. Thank you.

Speaker Change: Thank you.

Speaker Change: And our last question comes from Casey Woodring with J P. Morgan. Please go ahead Mr. Woodrink.

Casey Woodring: And our last question comes from Casey Woodring with J.P. Morgan. Please go ahead, Mr. Woodring. Great. Thanks for fitting me in, guys. Roland, you mentioned expecting to reach your 31% midterm margin goal well ahead of 2028. Does that well ahead mean 2026 or 2027? And I guess what are the variables that would get you there in 2026 versus 2027? And then on companion diagnostics, you said that the partnership revenue there grew double digits in the quarter. Can you just give us a sense as to what you're expecting from a revenues perspective from the companion diagnostics partnership revenue, how that's growing, and then how to think about that opportunity moving forward?

Great. Thanks for fitting me in guys. Roland you mentioned expecting to reach your 31% midterm margin goal well ahead of 2028 does that well ahead mean 2026 or 27 and I guess what are the variables that would get you there in 26 versus 27 and then.

Speaker Change: You said that Departmentship revenue there grew double digits in the quarter can you just give us a sense as to what you're expecting from a revenue perspective from that companion diagnostics partnership revenue, how that's growing and then how to think about that opportunity moving forward. Thank you.

Thierry Bernard: Thank you. Hi, Casey.

Speaker Change: Hi, Cassie I think we had so many news today that I want to keep something for probably later into the year. So again, we will update a number as we said at a given point when we also feel that well on our way with our planning for.

Thierry Bernard: I think we had so many news today that I want to keep something for probably later into the year. So, again, we will update that number, as we said, at a given point when we also feel that we were well on our way with our planning for 26. Again, for me, there's no question that we're going to reach it. For me, there's no question it's going to reach earlier. But we also want to give you the right magnitude, because we probably have to update not only the 26 number, but also the 28 ambition. So, give us a bit of time, and as always, once you feel ready, we will go on.

Speaker Change: 26 again for me there's no question that we're going to wage it from there's no question that's going to reach earlier, but we also want to give you the right magnitude because we probably have to update and not only the 26 number but also the 28 ambition so give us a bit.

Speaker Change: As always once you feel ready we will go out and to your question on Cdx on company diagnostic we see a potential and we have always disclosed the same of double digit those products are bringing VA.

Thierry Bernard: And to your question on CDX on companion diagnostic. We see a potential and we have always disclosed the same. Those products are bringing value to pharma. You know that we have probably the most extensive. Network of Pharma Contracts in the market we have more than 35 main contracts with farm. And what is very interesting is that we keep adding solutions. four years ago, five years ago. Qiagen companion diagnostic was mainly PCR. And then we added NGS capability. And then more recently, we added digital. And then last year, as you have seen, we added syndrome. So it's healthy.

Speaker Change: Probably the most extended network of pharma contracts in the market, we have more than 35 main contracts with pharma and what is very interesting is that we keep adding solutions and four years ago five years ago.

Speaker Change: Was mainly P. C. R. And then we added N G S capabilities and then more recently, we added digital PCR and then last year as you have seen we added syndromic capabilities. So it's healthy.

Thierry Bernard: It's a very good window for our technology as well. As you know, also, we have signed a network of what we call Day One. Laboratory Contract. Because what is the key of companion diagnostic, Casey, is that anytime the drug is available, you need to make sure that the test is available at the same time. So we have a network of partners labs all over the world that make sure that as soon as the drug hits the market, we are ready to test the patient. For more information visit www.FEMA.gov And this is why we believe that a double-digit growth for this business is perfectly achievable.

Speaker Change: A very good window for our technology as well as you know also we have signed a network of what we call day, One laboratory contract because what is the key of company on diagnostic K C is that anytime the drug is available you need to make sure.

Speaker Change: [noise], Okay, Terry enrolling thank you very much and thank you for all of you for joining our call. Let me close it here. If you have any questions or comments. Please don't hesitate to reach out to Dominican me. Thank you very much bye bye [noise].

Thierry Bernard: Okay, Terry and Roland, thank you very much. And thank you for all of you for joining our call.

John Gilardi: Let me close it here. If you have any questions or comments, please don't hesitate to reach out to Dominic and me. Thank you very much.

Operator: Bye bye.

Speaker Change: And ladies and gentlemen. This concludes today's conference call. Thank you for joining and have a pleasant day Goodbye.

Operator: And ladies and gentlemen, this concludes today's conference call. Thank you for joining and have a pleasant day. Goodbye.