Q2 2025 Repligen Corp Earnings Call
Unknown Executive: Ladies and gentlemen, and welcome to Repligen Corporation's second quarter of 2025 earnings conference call.
Good day, ladies and gentlemen.
Unknown Executive: My name is Greg, and I will be your coordinator. All lines have been placed on mute to prevent any And please note that there will be a question and answer session following the company's formal remarks. At that time, simply press star followed by the number one on your telephone keypad. Once again, star one.
And welcome to Repligen Corporation's second-quarter 2025 earnings conference call. My name is Greg, and I will be your coordinator.
All lines have been placed on mute to prevent any background noise.
Unknown Executive: The company would like to note that there will be a limited time frame for Q&A and as such, management kindly requests that each individual ask one question. to try to accommodate all. Thanks for understanding.
R1.
Jacob Johnson: And I would now like to turn the call over to your host, Jacob Johnson, Vice President of Investor Relations for Repligen. Jacob.
The company would like to note that there will be a limited time frame for Q&A and as such management kindly requests that each individual asked 1, question to try to accommodate all thanks for understanding.
And I would now like to turn the call over to your host. Jacob Johnson, vice president of investor relations for repligen Jacob.
Olivier Loeillot: Thank you, Operator, and welcome to our second quarter of 2025 report. On this call, we will cover business highlights and financial performance for the three-month period ending June 30, 2025. We'll provide financial guidance for the full year 2025.
Olivier Loeillot: Joining us on the call today are Repligen's President and Chief Executive Officer, Olivier Loeillot, and our Chief Financial Officer, Jason Garland. As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risk and uncertainties that may cause actual events or results to differ. Additional information concerning risk related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K for the fiscal year ended December 31st, 2024, and our current reports including the Form 8-K that we are filing today and other filings that we make with the Securities and Exchange Commission.
Thank you, operator and Welcome to our second quarter of 2025 report. On this call. We will cover business highlights and financial performance for the 3-month period ending. June 30th 2025 and will provide Financial guidance for the full year 2025
Join us on the call today, our replicants president and chief executive officer, Olivier luiso and our Chief Financial Officer. Jason Garland
as a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company are subject to risk and uncertainties that may cause actual events or results to differ.
Olivier Loeillot: Today's comments reflect management's current views, which could change as a result of new information, future events, or otherwise. The company does not oblige or commit itself to update forward-looking statements except as required by law.
Additional information, concerning risk related to our business is included in our quarterly reports on form 10q our annual report on form 10K for the fiscal year, ended December, 31st 2024 and our current reports, including the form AK that we are filing today and other filings that we make with the Securities and Exchange Commission.
Today's comments reflect Management's, current views which could change as a result of new information, future events or otherwise.
Olivier Loeillot: During this call, we are providing non-GAAP financial results and guidance unless otherwise noted. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Repligen's website and on sec.gov. Adjusted non-GAAP figures in today's report include the following, non-COVID and organic revenue and or revenue growth, cost of goods sold, gross profit and gross margin, operating expenses including R&D and SG&A, income from operations and operating margin, tax rate on pre-tax income, net income, diluted earnings per share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin.
The company does not oblige or commit itself to update forward-looking statements except as required by law.
during this call, we are providing non-gaap Financial results and guidance, unless other, otherwise noted reconciliations of gaap to non-gaap financial measures are included in the press release that we issued this morning, which is posted to wrapunzel website and on sec.gov
Adjust the non-gaap figures in today's report include the following non-covid and organic Revenue, Andor Revenue growth cost of goods. Sold, gross profit and gross margin operating expenses, including R&D and sgna.
Income from operations and operating margin.
Olivier Loeillot: For more information visit www.FEMA.gov These adjusted financial measures should not be viewed as an alternative to gap measures, but are intended to best reflect the performance of our ongoing operations.
Olivier Loeillot: Now, I'll turn the call over to Olivier. Thank you, Jacob.
The tax rate on pre-tax income, net income, diluted earnings per share, EBITDA, adjusted EBITDA, and adjusted EVA margins. These adjusted financial measures should not be viewed as an alternative to the GAAP measures, but are intended to best reflect the performance of our ongoing operations. Now, I'll turn the call over to Olivia.
Olivier Loeillot: Good morning, everyone, and welcome to our 2025 Second Quarter call. We had another outstanding quarter in Q2 with 17% organic non-COVID growth, the highest growth rate since 2022. There were highlights across the portfolio, led by chromatography, while filtration posted mid-teens non-COVID groups. consumable demand remains healthy and capital equipment grew heightened. CDMOs had a very strong quarter, while biopharma continued its momentum, with revenues growing 20%. Geographically, twins were consistent globally, with all regions growing mid-teens in the quarter. Odors grew over 20% year-over-year and high teens organically led by strength infiltration. This marks the eighth quarter in a row of orders exceeding non-COVID revenue and the fifth quarter of sequential order growth.
Thank you. Jacob. Good morning, everyone and Welcome to our 2025 second quarter call
We had another outstanding quarter in Q2 with 17% organic non-covid growth, the highest growth rate since 2022.
They were highlights across the portfolio. Led by chromatography. While filtration posted meetings, non-covid growth
Consumable demand remains healthy and Capital Equipment, grew High Teens.
CDMOs had a very strong quarter, while BioFarma continued its momentum with revenues growing 20%.
Geographically Trends were consistent globally with all regions growing mid teens in the quarter.
Orders grew over 20% year-over-year and High Teens, organically led by strength infiltration.
Olivier Loeillot: We believe this broad-based demand across our diversified portfolio and customer space highlights our ability to outpace industry growth. As a result, we are raising the midpoint of our organic growth guidance. Given the strong order trends we are seeing, we are investing in manufacturing labor to best serve our customers and preserve our lead time.
This marks the eighth quarter in a row of orders exceeding non-coastal order growth.
We believe these broad-based demand across our Diversified portfolio and customer space. Highlights our ability to outpace Industry growth.
As a result, we are racing towards the midpoint of our organic growth guidance.
Olivier Loeillot: While there have been a number of macro headlines in recent months, we remain focused on what we can control, which is delivering on our strategy in 2025 and beyond. I'll speak to this more in a moment, but we believe our Q2 results highlight that by executing on our innovation and commercial strategy, we can deliver differentiated growth. Importantly, should our customers face macro challenges or pricing pressure, our products will enable them to improve yield and productivity. Customer centricity is core to our foundation, and we will continue to innovate to enable our customers to produce breakthrough therapies in a more efficient manner.
Given the strong order Trends. We are seeing we're investing in manufacturing labor to best serve, our customers and preserve our lead times.
While there have been a number of micro headlines in recent months, we remain focused on what we can control, which is delivering on our strategy in 2025 and beyond.
I speak to this more in a moment, but we believe our Q2 results highlights that by executing on our Innovation and Commercial strategy, we can deliver differentiated growth
Importantly, should our customers face macro challenges or pricing pressure. Our products will enable them to improve yield and productivity.
Olivier Loeillot: In addition, we are encouraged by the traction at our strategic accounts and great execution by our entire commercial team.
Customers in electricity are core to our foundation, and we will continue to innovate to enable our customers to produce breakthrough therapies in a more efficient manner.
Olivier Loeillot: In short, we're excited about the momentum in our business, as highlighted by our year-to-date performance, which demonstrates the differentiated nature of Repligen and the effectiveness of our strategy.
Team.
In short, we're excited about the momentum in our business as I lighted by our year-to-date performance, which demonstrates a differentiator nature of repugen and the effectiveness of our strategy.
Olivier Loeillot: Unpacking Our Performance by NMarket Q2 2025 biopharma revenues grew 20% year-over-year and growth over 20%. This was driven by recent wins at large pharma accounts as we cross-sell our entire portfolio. Revenue from emerging biotechs grew high-teens, so orders remained muted. The CDMO revenues were up meaningfully while orders grew double digits. His strength was similar across our Tier 1 and Tier 2 CDMO cast. Year-to-date, both revenues and orders from biopharma and CDMOs are up greater than 20 percent, underscoring the continued momentum from our end market. Consumable revenue and orders, which exclude proteins, grew greater than 20% year-over-year, a record revenue quarter on a non-COVID basis.
And packing our performance by end market.
Q2 25 by your farmer revenues grew, 20% year-over-year, and all the growth over 20%.
This was driven by recent wins at large farmer accounts as we cross sell our entire portfolio.
Revenue from emerging biotechs grew high teens, so orders remain muted.
TDM more revenues were up, meaningfully while orders grew double digits,
The strength was similar across our Tier 1 and Tier 2 CDMO customers.
Year to date both revenues and orders from biofarma and cdmos are a greater than 20% underscoring the continued momentum from our end markets.
Consumable revenue and orders, which exclude proteins grew greater than 20% year-over-year. A record Revenue quarter on the non-covid basis.
Olivier Loeillot: Capital Equipment Revenue returned to growth in the high teens, while orders grew greater than 20%. After optimism around our Capital Equipment Funnel last quarter, it was great to see this convert to orders and revenues this quarter, driven by traction in both ATF and downstream systems. From a geographic point of view, growth was consistent across all regions in the Mid-Pacific. We would highlight China, all those picked up significantly in Q2. While we are hesitant to call this a trend, and there could have been some tariff-related dynamics at play in China, this is an encouraging sign. Coupled with new leadership, we're optimistic about China returning to growth in 2026.
Capital equipment revenue returned to growth in the high teens, while others grew greater than 20%.
After optimism around our capital equipment, and our last quarter, it was great to see this convert to orders and revenues this quarter, driven by traction in both ATF and downstream systems.
From a geographic, point of view, gross was consistent across all regions in the mid teens.
We would highlight that China orders picked up significantly in Q2.
While war is returned to call this a trend and they could have been some tariffs related Dynamics, at play in China. This is a non-core in Sign.
Olivier Loeillot: And outside of China, AIPAC orders nearly doubled sequentially. Even this momentum, we're investing more in this region. New modalities revenue grew mid-tenth in the quarter. Demand was fairly broad, including a pick-up in cell therapy activities.
Coupled with new leadership were optimistic about China returning to growth in 2026.
And outside of China, impact orders nearly doubled sequentially.
Given this momentum, we're investing more in this region.
New modalities revenue group meetings in the quarter.
Olivier Loeillot: With orders essentially flat in the quarter, our guidance now assumes new modality demand will be muted in the second half.
Demand was fairly broad, including a pickup in Sesser IP activity.
With orders essentially flat in the quarter, our guidance now assumes new modality demand will be muted in the second half.
Olivier Loeillot: While we don't typically comment on customers, given recent headlines, we wanted to share the following incremental details this quarter. A gene therapy platform represented 10 million of revenue in the first half of this year, and we have already recognized 3 million more in July. Our data guidance assumes minimal incremental revenue from this platform for the remainder of 2025, which represents a 1% headwind versus our prior guidance. Momentum in biopharma consumables and hardware, along with 20% of the growth in the first half of 2025, gives us confidence to increase our organic growth outlook despite that headwind.
Why we don't typically comment on customers given recent headlines? We wanted to share the following incremental details this quarter.
A gene therapy platform represented, 10 million of Revenue, in the first half of this year and we have already recognized 3 million more in July.
Our dated guidance assumes minimal incremental revenue from these platform for the remainder of 2025, which represents a 1% headwind versus our project guidance.
Olivier Loeillot: Our revenue guidance of $7.15 to $7.35 million reflects 12.5 to 15.5% organic non-COVID growth.
Momentum in biofarma, consumables, and hardware, along with 20% growth in the first half of 2025, gives us confidence to increase our organic growth outlook, despite that headwind.
Jason Garland: Jason will provide more details shortly.
Our Revenue guidance of 715 to 735 million reflects 12.5, to 15.5 organic non-covid growth.
Jason will provide more details shortly.
Olivier Loeillot: We recently completed our annual strategic planning process, and I would like to give you a brief update. While this is an internal exercise, we thought in the current environment, it might be helpful to share a few highlights as it relates to our outreach. Our vision is to be the global innovation leader in bioprocessing with a comprehensive portfolio of differentiated, data-driven solutions across therapeutic modalities. All of this is backed by a mission to inspire advances in bioprocessing as a preferred partner in the production of biologic drugs that improve human health. As we reflect on the last decade, we have utilized M&A and R&D investments to add innovative products to our portfolio, while diversifying our customer base and product offering.
We recently completed our annual strategic planning process and I would like to give you a brief update.
Once this is an internal exercise, we thought in the current environment, it might be helpful to share a few highlights as it relates to our outlook.
Our vision is to be the global Innovation leader. In bioprocessing with a comprehensive, portfolio of differentiated data, driven Solutions across therapeutic modalities
All of this is backed by a mission to inspire advances in bioprocessing, as a preferred partner in the production of biologic drug that improve human health.
As we reflect on the last decade, we have utilized m&a and R&D Investments to add Innovative products to our portfolio. While diversifying our customer base and product offering
Olivier Loeillot: As we look ahead, we will continue to maintain customer trust through quality and service, work to cross-sell our portfolio by focusing on key accounts, and be fit for growth. In addition, we see growth opportunities, including Asia, modalities like ADCs and cell therapy, and funds like digitization. These are key focus areas for future growth at Repligen. We think this results in our ability to outpace industry growth by 5%. Given this organic growth strategy, our strategic plan lays out a path to doubling the size of the company in the medium term, with only modest M&A assumptions. As our top line grows, we will remain focused on profitability to drive gross margin expansion and operating leverage.
As we look ahead, we will continue to maintain customer trust through quality and service work to cross, sell our portfolio by focusing on care accounts and be fit for growth.
In addition we see growth opportunities, including Asia modalities, like adc's and cell therapy and trends like digitization.
These are key Focus areas for future growth at repen.
Given these organic growth strategy. Our strategic plan lays out a path to doubling the size of the company in the medium term with only modest m&a assumptions.
As our Topline growth, we will remain focused on profitability to drive gross margin expansion and operating Leverage
Olivier Loeillot: Even the strong trends in capital equipment in the quarter, I wanted to touch on our system strategy. We embarked on this journey several years ago, and our portfolio now spans small- to larger-scale systems across our filtration and chromatography franchises. In addition to automation, configurability, and simplicity benefits, we have integrated our PAT capabilities into the systems and we'll continue to do so. The strength we have seen in hardware over the last 12 months is a positive leading indicator. Capital Equipment Placements will drive services and consumables pull-through in coming years, similar to the benefits we are seeing with ATF today.
Next.
Even the strong trends in capital equipment in the quarter. I wanted to touch on our system strategy.
We embarked on this journey, several years ago, and our portfolio now spans small to larger scale systems across our filtration and chromatography franchises.
In addition to automation configurability and simplicity benefits, we have integrated our PAT capabilities into the systems, and we will continue to do so.
The strength we have seen in hardware over the last 12 months is a positive leading indicator.
Olivier Loeillot: This is another example of innovation driving growth.
Capital Equipment, placements will drive services and consumable pull through in coming years. Similar to the benefits we are seeing with ATF today.
Olivier Loeillot: We plan to run the same playbook with a 908 bioprocessing portfolio for the upstream workflow. As it pertains to tariffs, we said last quarter we would leverage our global network so charges and pricing were appropriate. With modest investments, we anticipate by next year, the vast majority of our portfolio will have dual manufacturing in the US and Europe, which should position us well in this new trade environment. We have been passing surcharges through to customers. Finally, we have taken price actions to offset related inflation. The net result is a slight benefit to our 2025 revenue and a modest headwinds to March.
This is another example of innovation driving growth.
We plan to run the same Playbook with a 9008 bioprocessing portfolio for the Upstream workflow.
As it pertains to tariffs, we said last quarter, we would leverage our Global Network to charges and pricing where appropriate.
With modest investments, we anticipate that by next year, the vast majority of our portfolio will have dual manufacturing in the U.S. and Europe, which should position us well in this new trade environment.
We have been passing search charges through to customers.
Finally, we have taken price actions to offset related inflation.
So, net results is a slight benefit to our 2025 revenue and a modest headwinds to margin.
Olivier Loeillot: Finally, I wanted to highlight that we published our 2024 Corporate Sustainability Report in May. We take a pragmatic approach to advancing our sustainability-related ambitions. For example, we reduced our waste generation by 25% last year with the help of our Repligen performance system. As a testament to our efforts, we were honored to be named by Newsweek as one of the world's greenest companies in 2020.
Finally.
I wanted to highlight that we publish our 2024 corporate sustainability report in May,
We take a pragmatic approach to advancing our sustainability related, ambitions.
For example, we reduce our waste Generation by 25% last year with the help of our represent performance system.
As a testament to our efforts, we were honored to be named by Newsweek as 1 of the world's greatest companies in 2025.
Olivier Loeillot: Before I turn the call over to Jason, I'll provide an overview of our franchise-level performance. Filtration revenue grew mid-teens, excluding COVID in Q2. ATF, T-STEMS, and TFF consumables were all meaningful contributors to this growth. Filtration orders were very strong, as we had a record quarter for ATF order intake, and as mentioned earlier, good traction on system. We expect our hardware portfolio to complement healthy consumable demand to drive further filtration growth in the back half of the economy.
Before I turn the call over to Jason.
I'll provide an overview of our franchise level performance.
Filtration, Revenue, grew mid teens, excluding coid in Q2.
ATF C stands and tff consumables were all meaningful contributors to these growth.
Filtration orders were very strong as we had a record quarter for ATF order intake and as mentioned earlier, good traction on systems.
We expect our Hardware portfolio to compliment healthy consumable demand to drive further. Filtration growth in the back half of the year.
Olivier Loeillot: Chromatography had a record quarter with greater than 40% revenue growth. This was driven by large-scale column demand from Pharma and Europe as our Q1 orders translated to revenue growth in Q2. With recent Pharma customer wins, we did have a higher-than-normal mix of procured resins in the quarter. Chromatography orders grew low double-digit in quality.
Chromatography had a record quarter with greater than 40% revenue growth.
This was driven by large scale, column demands from farmer and Europe, as our q1 orders translated to revenue growth in Q2.
With recent far far, customer wins, we did have a higher than normal mix of procured raisins in the quarter.
Chromatography orders grew low, double digit in quarter 2.
Olivier Loeillot: After a very strong Q1, proteins posted high single-digit growth in Q2. This was driven by chromatography readings and ligands. After a very strong first half, our guidance assumes lighter protein revenue in the second half.
after a very strong quarter, 1 proteins, posted High single digit growth in quarter 2,
This was driven by chromatography raisins and legans.
Olivier Loeillot: We are continuing to develop custom and catalog chromatography resins with several product launches planned for the second half of Process analytics grew over 30% in Q2, with $3 million of revenue from the 908 bioprocessing acquisition and 12% organic growth. This was mainly driven by consumable and service uptake. Process analytics orders grew north of 20% in Q2, which was 12% organic.
After a very strong first half our guidance assumes, lighter proteins, Revenue in the second half.
We are continuing to develop custom and catalog chromatography raisins with several product launches planned for the second half of the year.
Analytics, grew over 30% in quarter 2, with 3 million of revenue from the 9008 bioprocessing acquisition and 12%, organic growth.
This was mainly driven by consumable and service. Uptick
Olivier Loeillot: We have lastly completed the initial integration of the 908 bioprocessing assets, moving their Boston operation to our Marlborough facility. We have also cross-trained both Sea-Tac and 908 Commercial.
Process analytics. Orders grew north of 20% in Q2, which was 12%. Organic
We have largely completed the initial integration of the 9008 bioprocessing assets, moving their Boston operation to our Marlborough facility.
We have also cross-trained, both cekc, and 9008 Commercial teams.
Olivier Loeillot: To summarize our Q2 performance, 17% organic non-COVID revenue growth showcases the bioprocessing recovery continues to play out as well as our differentiated product portfolio. Our order and funnel trends suggest this momentum should continue into the second half of the year. As a result, we are confident in our updated 2025 outlook and delivering above-market growth.
As well as our differentiated product portfolio.
Jason Garland: Now I'll turn the call over to Jason for financial highlights. Thank you, Olivier, and good morning, everyone. Today we are reporting our financial results for the second quarter of 2025 and providing an update to our financial guidance for the full year. Unless otherwise mentioned, all financial measures discussed reflect adjusted, non-GAAP measures. As shared in our press release this morning, we delivered second quarter revenue of $182 million. This is a reported increase of 15%. We were up 11% on an organic basis, which excludes the impact of acquisitions and currency, and up 17% on an organic non-COVID basis, which we believe best reflects our underlying performance in the quarter.
Our order and funnel Trends. Suggest this momentum should continue into the second half of the year as a result. We are confident in our updated 2025 Outlook and delivering above market growth.
Now, I turn the call over to Jason for financial highlights.
Thank you, Olivia and good morning everyone.
Today we are reporting our financial results for the second quarter of 2025 and providing an update to our financial guidance for the full year.
Unless otherwise mentioned our financial measures discussed reflect adjusted non-gaap measures.
as shared in our press release this morning, we delivered second quarter revenue of 182 million
This is a reported increase of 15%.
Jason Garland: Acquisitions contributed approximately two points of the reported growth, while foreign currency was also a two-point tailwind.
We are up 11% on an organic basis, which excludes the impact of acquisitions and currency, and we are up 17% on an organic non-COVID basis, which we believe best reflects our underlying performance in the quarter.
Jason Garland: As Olivier offered perspective on our product franchise performance, I'll provide more detail on our global regions. Starting with quarterly revenue, North America represented 49% of our total. Europe represented 38% and Asia Pacific and the rest of the world represented 13% with Europe gaining some share since last quarter. We saw equally strong performance across all three regions, each growing in the mid-teens. Asia growth was led by ATF. Europe growth benefited from Opus, Angenix, and Systems, while North America growth was broad-based across all four franchises. For orders, APAC and the rest of the world bounced back with strong growth, while America's grew nearly 20%, and EMEA orders were up mid-teens.
Acquisitions contributed approximately 2 points of the reported growth while foreign currency was also a 2-point Tailwind.
As Olivier offered perspective on our product franchise performance, I'll provide more detail on our global regions.
Starting with quarterly Revenue, North America represented 49% of our total
Europe represented 38%.
And Asia-Pacific and the rest of the world represented 13% with Europe, gaining some share since last quarter.
we saw equally strong performance across all 3 regions each growing in the mid teens.
Asia growth was led by ATF Europe growth benefited from Opus, Tangen, and systems. While North America growth was broad-based across all 4 franchises.
Jason Garland: While China revenues declined, it was encouraging to see orders from China rebound to north of 40% year-over-year and more than double sequentially. Even with some likely pull forward of a couple million dollars of revenue, we saw early wins from our new leadership in the region, as Olivier mentioned earlier. Transitioning to profit and margins, gross margin of 51.1% was flat on a reported year-over-year basis as strong volume and productivity overcame a tough comparison from COVID revenue, which was a one-point benefit to margin in the prior year. In addition, mix was a three-point headwind in the second quarter versus last year, driven by a higher-than-normal mix of Repligen-procured resin for opus columns.
For orders, the 8-pack and the rest of the world bounced back with strong growth, while America's grew nearly 20%, and the Maya orders were up in the mid-teens.
While China revenues decline, it was encouraging to see orders from China rebound to north of 40% year-over-year and more than double sequentially.
Even with some likely pull forward of a couple million dollars of Revenue. We saw early wins from our new leadership in the region as Olivia mentioned earlier,
Transitioning to profit and margins gross. Margin of 51.1% was flat on a reported year-over-year basis, as strong volume and productivity. Overcame, a tough comparison from coid revenue, which is a 1-point benefit to margin in the prior year.
Jason Garland: We expect that mix to be at more normal levels in the second half. Tariffs were a slight headwind to margin in this quarter. First-half gross margin was 52.3%, and as a result, we still see gross margins at 52 to 53% for the year. Continuing through the P&L, our adjusted income from operations was $22 million in the second quarter, up 8% year-over-year on volume leverage. This increase is driven by $12 million higher gross profit from higher sales and the gross margin discussed earlier, offset by an increase in operating expenses. Adjusted OPEX grew 9% on an organic basis, which is approximately half of organic non-COVID revenue growth of 17%.
In addition, mix was a 3-point headwind in the second quarter versus last year, driven by a higher than normal mix of repellent procured. Resin for Opus columns, we expect that mix to be at more normal levels in the second half.
Tariffs were a slight headwind to margin in this quarter. First half gross margin was 52.3%. And as a result, we still see gross margins at 52 to 53% for the year.
Continuing through the P&L, our adjusted income from operations was $22 million in the second quarter, up 8% year-over-year on volume leverage. This increase is driven by $12 million in higher gross profit from higher sales, and the gross margin discussed earlier, offset by an increase in operating expenses.
Jason Garland: Both exclude the impact of acquisitions and foreign currency. We continue to make strategic investments to support future growth. This translated to an adjusted operating margin of 12%. Margins declined 80 basis points year over year due to the aforementioned COVID and mixed headwinds, along with a point headwind from recent acquisitions. This more than offsets price, volume, and productivity benefits. Our second quarter adjusted EBITDA margin was 17.6% flat year over year. Adjusted net income was $21 million, a $1 million year-over-year decline. Higher adjusted operating income was offset by $3 million of lower interest income and higher tax provision.
Adjusted Opex grew 9% on an organic basis, which is approximately half of or organic non-covid. Revenue growth of 17% both exclude the impact of Acquisitions and foreign currency,
We continue to make strategic investments to support future growth.
This translated to an adjusted operating margin of 12%. Margin decline, 80 basis points year-over-year due to the aforementioned, coid and mix headwinds along with a point headwind from recent acquisitions.
This more than offsets price volume and productivity benefits. Our second quarter adjusted Eva. Margin was 17.6% flat year-over-year.
Decline.
Jason Garland: Our second quarter adjusted effective tax rate was 22.7% in line with our full-year guidance. Adjusted fully diluted earnings per share for the second quarter were $0.37 compared to $0.40 in the same period in 2024, down 6% year-over-year, also affected by last year's high-margin COVID. Finally, our cash position at the end of the second quarter was $709 million, up $12 million sequentially. This was driven by cash flow from operations.
Higher adjusted operating income was offset by $3 million of lower interest income and higher tax provisions. Our second quarter adjusted effective tax rate was 22.7%, in line with our full year guidance.
Adjusted fully diluted earnings per share for the second quarter were $0.37 compared to $0.40 in the same period in 2024, down 6% year-over-year. This decline was also affected by last year's high-margin COVID business.
Finally, our cash position at the end of the second quarter was 709 million up 12 million sequentially. This was driven by cash flow from operations.
Jason Garland: We are very happy with the strong first-half results delivering above-market revenue growth and margin expansion, which positions us to deliver on our improved outlook.
Jason Garland: I'll speak to adjusted financial guidance, but please note that our GAAP to non-GAAP reconciliations for our 2025 guidance are included in the reconciliation tables in today's earnings press release. Our guidance includes tariffs and updated foreign currency. As highlighted earlier by Olivier, we are increasing our organic revenue growth midpoint as we narrow towards the high end of the guidance range. We now see 10.5% to 13.5% organic revenue growth, which increased from 9.5% to 13.5%. This represents 12.5 to 15.5% organic non-COVID growth. We are increasing our organic growth expectations despite the aforementioned headwind from new modality. We are now assuming a 1% benefit from foreign currency versus our prior assumption of a 1.5% headwind.
We are very happy with the strong first half results, delivering above market revenue growth and margin expansion, which positions us to deliver on our improved outlook. I'll speak to our adjusted financial guidance. But please note that our GAAP to non-GAAP reconciliations for our 2025 guidance are included in the reconciliation.
Reconciliation tables in today's earning press release. Our guidance includes tariffs and updated foreign currency assumptions as highlighted earlier. By Olivier, we are increasing our organic Revenue growth midpoint as we narrow towards the high end of the guidance range.
We now see 10.5% to 13.5% organic revenue growth, which increased from 9.5% to 13.5%. This represents 12.5% to 15.5% organic non-COVID growth.
We are increasing our organic growth expectations. Despite the aforementioned headwind from new modalities.
Jason Garland: Putting this together, we are increasing our 2025 revenue guidance to $715 to $735 million, up from $695 to $720 million, or an increase of $17.5 million at the midpoint. To provide a clear walk of this midpoint increase, it is driven by $7.5 million of overall portfolio strength, which more than offsets $7 million of gene therapy headwind. In addition, we expect a couple million dollars of tariff surcharges, which incorporates this past weekend's agreement with Europe, and the remaining $15 million increase reflects the benefit of foreign currency changes. Regarding our revenue cadence, our normal seasonality would suggest third quarter revenue would be below the second quarter, but given the momentum we are seeing, we expect the third quarter to be in line with the second quarter.
We are now assuming a 1% benefit from foreign currency, versus our prior assumption of a 1.5% headwind.
Putting this together, we are increasing our 2025 revenue guidance to $715 to $735 million, up from $695 to $720 million, or an increase of $17.5 million. At the midpoint,
to provide a clear. Walk of this midpoint increase is driven by 7.5 million of overall portfolio strength, which more than offsets 7 million of gene therapy headwind. In addition, we expect a couple million dollars of tariffs or charges which incorporates this past weekend's agreement with Europe.
And the remaining 15 million dollar increase reflects the benefit of foreign currency changes.
Jason Garland: That said, the fourth quarter will represent our strongest revenue and margin quarter for the year. In terms of growth by franchise, we expect the following filtration growth of 10 to 12% up from 9 to 12%. This represents 13.5 to 15.5 non COVID growth. Chromatography growth of greater than 20% up from 10 to 15%. Our proteins outlook of 10 to 15% is unchanged, and PAT will grow approximately 25% versus our prior guidance of 20 to 25%, including the 908 Bioprocessing Act. We continue to expect to deliver adjusted gross margins in the range of 52 to 53%, which represents 160 to 260 basis points of year-over-year margin expansion, driven by volume leverage, pricing, and manufacturing productivity, offset primarily by inflation and some 2024 COVID sales drag.
Regarding our revenue, Cadence, our normal seed seasonality would suggest third quarter revenue would be below the second quarter, but given the momentum we are seeing, we expect the third quarter to be in line with the second quarter. That said, the fourth quarter will still represent our strongest revenue and margin quarter for the year.
in terms of growth by franchise, we expect the following
Filtration growth of 10% to 12%, up from 9% to 12%. This represents 13.5% to 15.5% non-COVID growth.
Chromatography growth of greater than 20% up from 10 to 15%.
Are proteins Outlook of 10 to 15% is unchanged and Pat will grow approximately 25% versus our prior guidance of 20 to 25% including the 908 bioprocessing acquisition.
Jason Garland: Our guidance assumes a slight headwind from tariff surcharges, offset by some benefit from foreign currency. We now expect our adjusted income from operations to be between 98 to $103 million, while maintaining our 13.5 to 14.5% adjusted operating margin guidance. The $2 million increase at the midpoint versus prior guidance reflects the top line momentum we have seen year to date. Relative to our prior outlook, foreign currency adds close to $4 million of operating expenses. We're also continuing to make strategic investments in expanding our global commercial team and ensuring we are fit for growth across our business processes and functions.
We continue to expect to deliver adjusted gross margins in the range of 52 to 53% which represents 160 to 260 basis points of view over your margin expansion, driven by volume leverage pricing and Manufacturing. Productivity offset primarily by inflation and some 2024 Co sales drag
Our guidance assumes a slight headwind from tariffs and search charges, offset by some benefit from foreign currency.
We now expect our adjusted income from operations to be between 98 to 103 million. While maintaining our 13.5 to 14.5% adjusted operating margin Guidance, the 2 million dollar increase at the midpoint versus prior guidance. Reflects the Topline momentum. We have seen here to date relative to our prior Outlook foreign currency as close.
List of $4 million of operating expenses.
Jason Garland: That said, we will continue to manage our organic investments and operating expenses at a rate that is lower than our organic sales growth, as we balance cost efficiency with investments that are critical to support future growth.
We're also continuing to make sure strategic Investments and expanding our global commercial team and ensuring we are fit for growth across our business processes and functions.
Jason Garland: Continuing through the P&L, we are updating our adjusted other income guidance. $22-$23 million or $1 million lower than our prior guidance due to lower interest income assumptions. Our 2025 adjusted effective tax rate expectations are unchanged at 22-23%. Given these dynamics, we now expect our adjusted fully diluted earnings per share to be between $1.65 and $1.72, a one cent increase at the midpoint from our prior range, which represents five to nine percent growth versus last year. Our balance sheet remains strong as we ended the second quarter with $709 million of cash, and we are well positioned to manage the current environment.
That said, we will continue to manage our organic Investments and operating expenses at a rate that is lower than our organic sales growth as we Balance cost, efficiency with Investments that are critical to support future growth.
Continuing through the p&l. We are updating our adjusted other income guidance to 22 to 23 million or 1 million dollar lower than our prior guidance. Due to lower interest income assumptions. Our 2025 adjusted effective tax rate. Expectations are unchanged at 22 to 23%.
Which represents 5% to 9% growth versus last year.
Jason Garland: We will remain prudent in our spending while maintaining flexible dry powder for potential acquisitions. We still expect CapEx to be down 20 to 25% versus 2024 with our spending back to pre-COVID level.
Our balance sheet remains strong, as we ended the second quarter with $709 million in cash. We are well positioned to manage the current environment. We will remain prudent in our spending while maintaining flexible dry powder for potential acquisitions. We still expect capex to be down 20 to 25% versus 2024, with our spending back to pre-COVID levels.
Olivier Loeillot: As we wrap, we are encouraged by our strong first half financial results, especially considering some of the headwinds we continue to face from recent new modality headlines. We believe this performance reflects solid execution on our differentiated strategy. Olivier and I would like to thank our Repligen teammates for helping us to navigate a unique environment while delivering above market.
Unknown Executive: With that, I will turn the call back to the operator to open the line. Thank you. And at this time, I would like to remind everyone in order to ask a question, press star than the number one on your telephone keypad. Once again, star one. And please note, there will be a limited timeframe for Q&A. And as such, management kindly requests that each individual ask one question to try to accommodate all. And we will pause just a moment to compile the Q&A route.
As we wrap, we are encouraged by our strong. First half Financial results especially considering some of the headwinds we continue to phase from recent new modality headlines. We believe this performance reflects solid execution on our differentiated strategy Olivier and I would like to thank our repentant teammates for helping us to navigate a unique environment while delivering above market growth with that, I will turn the call back to the operator, to open the line for questions.
Thank you. And at this time I would like to remind everyone in order to ask a question. Press star, then the number 1 on your telephone keypad. Once again the star 1 and please note there will be a limited time frame for Q&A and as such management kindly requests that each individual asked 1 question to, to try to accommodate all thank you and we will pause just a moment to compile the Q&A roster.
Puneet Souda: And it looks like our first question today comes from the line of Puneet Souda with Leering Partners. Puneet, please go ahead. Great. Thanks. Thanks, Olivier, Jason, Jacob. Maybe first question, just given the order book strength you're seeing here, and thanks for the color on CDMOs and biopharma. Could you elaborate a bit on the growth that you're seeing on the clinical trial side versus the commercial campaigns? We saw uptick among the CROs in the quarter, so just wondering if you're seeing any of that.
And it looks like our first question today comes from the line of Pune suda with Lee ring Partners Punnett. Please go ahead.
Puneet Souda: And then a broader, more important question here is, how much of any of this is a result of a pull forward from pharma and CDMO customers that are manufacturing to get ahead of the tariffs and move the inventory into U.S.? So we've been getting that question and just wanted to see what your customers are telling you, and is there any element of pull forward here?
Uh, great, thanks. Um, thanks Olivia, Jason. Jacob. Um, maybe first question, just uh, given the order book strength, you're seeing here, uh, and thanks for the color on cdmos and bio Pharma. Um, uh, could you elaborate a bit on, uh, the growth that you're seeing on the clinical trial side versus the commercial campaigns? Um, we saw, you know, uptick among the crows uh, in the quarter. So just wondering if you're seeing any of that and then a broader more important question here is how much of any of this poll is is is this is a result of a pull forward, uh, from Pharma and cdmo customers that are manufacturing to get ahead of the tariffs and move the inventory into us. Uh, so we've been getting that question and just wanted to see, uh, you know, what, your customers are telling you and is is is there an, any, any element of pull forward here?
Olivier Loeillot: Hey, good morning, Puneet. Yeah, thanks for the question. I think I'll start by answering the second question. So we've seen really very little pull forward, at least that we're aware of, apart probably from China, where we think maybe a couple of million were indeed pulled forward because of the uncertainty, particularly during the first two months of the quarter about where tariffs would land. So probably a couple of million in China, but outside of China, we've really not seen anything like that. And we would probably not be the first company seeing that for the reason that we are more and more clinical than commercial still today.
Hey, good morning, Punnett. Yeah, thanks for the question. I think I'll start by answering the second question. So, we've seen really very little pull forward, at least that we are aware of, apart probably from China, where we think maybe a couple of million were indeed pulled forward because of the uncertainty, particularly during the first two months of the quarter about where tariff food lands. So, probably a couple of million in China, but outside of China.
Olivier Loeillot: And that's probably a good link then to your first question, which is, have we seen any changes lately on the behavior of our customers? Honestly, not really. I mean, as you know, we think last year, we landed with probably about 35% of our business with commercial products, 65% clinical. It's probably fair to assume the commercial percentage is higher now today, we were just updating it once per year, but I guess it's going to be higher because of the traction we have on ETF, the traction we have on fluid management and the great results we get from our Key Account Management team, but we don't have an exact number for the time being here.
We've really not seen anything like that and we would probably not be the first company thing that for for the reason that we are more more clinical than commercials still today, and that's probably a good link. Then to your first question question, which is, have we seen any changes lately on on the behavior of our customers? Honestly, not really I mean, as, you know, we think last year we landed with probably about 35% of our business with commercial product, 65 clinical. It's probably fair to assume the commercial percentage is higher. Now today, we were just updating it once per year, but I I guess it's going to be higher.
Because of the traction we have on ATF, the traction we have on trade management, and the great results we get from our clear account management team, we don't have an exact number for the time being here.
Puneet Souda: Got it. That's very helpful. And then just briefly on the gene therapy side, appreciate your sizing the, you know, Sarepta headwind, trying to understand, you know, broadly speaking across all of the AAVs, you know, can you maybe size your exposure? And how should we think about this customer, you know, going into 2026? Are you assuming anything there? And lastly, if I could, we all get 2026 questions, anything you can provide there at a company level would be helpful. Thank you again.
Got it. Uh, that's that's very helpful. And then, uh, just briefly on the gene therapy side. Appreciate your sizing. The, you know, Sarepta had went um, um, trying to understand, you know, broadly speaking across um all of the aavs. Um you know, can you maybe size your exposure and how should we think about this customer? Um, you know, going into 2026? Are you assuming anything there? Um, and lastly, if I could we we all get 2026 questions anything, you can provide their, at a company level would be helpful. Thank you again.
Olivier Loeillot: Yeah, so as you know, we typically don't comment on customers and specific programs, but given the recent headline we've seen on that specific platform program, we've decided to be a little bit more specific this time. So again, what we've been saying is that we've got very de minimis extra revenue expected to come for the rest of this year. And for the time being, we obviously don't comment about 26 and even less on specific program.
Olivier Loeillot: I mean, it's very early to say anything about what's going to happen. You've probably heard about the latest news last night that the FDA apparently has given the right again to sell to the ambulatory patient population. So it's definitely too early to say anything at this stage. In terms of the overall new modality business, I mean, for us this year, it's still an important one. I mean, we had very nice growth in the first half of the year, about 10%, which is if you compare it to the overall growth of the business of 15% for the organic non-COVID growth, it's a little bit lower, but it still means that the business is still doing pretty well and we're still very bullish about the future.
Olivier Loeillot: But we just want to play across all of these new modalities and where maybe gene therapy has got more headwinds today. We see a lot of good stuff happening on the cell therapy side, ADC as well, and we're definitely going to continue to innovate and make sure we support those customers in those new modalities here right now.
Olivier Loeillot: And as far as 2026 is concerned, we never comment in advance. We were going to tell you that when we report our Q4 results beginning of 2026. Got it. I appreciate it. That's fair. Thank you.
Given the right to gain to sell to the ambulatory patient population. So it's definitely too early to say anything at this stage in term of of the overall, new modality business, I mean, for us this year, it's still an important 1. I mean, we we, we had very nice growth in the first half of the Year about 10%, which is if you compare it to the overall growth of the business of 15%, for the organic non-covid growth, it's a little bit lower but it still means that the business is still doing pretty well. And we are still very bullish about the future, but we just want to play across all of these new modalities and where maybe gene therapy has got more headwinds today. We see a lot of good stuff happening on the cell therapy side, ADC as well. And we're definitely going to continue to to innovate and make sure we support those customers in those new modality Arena. And as far as 2026 is concerned, we never come and in advance and V Punnett where we're going to tell you that. When we report our Q4, with those beginning of 2026,
Got it, I appreciate it. That's fair. Thank you.
Matt Larew: Thanks Puneet, and our next question comes from the line of Matt Larew with William Blair.
Thanks pit.
Matt Larew: Matt, please go ahead. Good morning. Two areas where your results and comments stand out are on capital equipment and China.
And our next question comes from the line of Matt LaRue with William Blair, Matt. Please go ahead.
Olivier Loeillot: Curiously, if you could talk about both those on capital equipment, maybe what you're seeing in terms of maybe new account wins or new penetration versus replacement, that might be a difference. And then on China, you referenced having a new team there, maybe some pull forward, but also doing some investment. Thanks, Matt.
Good morning at 2 areas where your results and comments, stand out our Capital Equipment and and China, curious, if you could talk about both those are on Capital Equipment, maybe what you're seeing in terms of maybe new account wins, or, or new penetration versus replacement. That might be a difference and then on China, you referenced having a new team there. Maybe some pull forward, but but also doing some investing because you're cured by what you see. So, just just hearing about what you saw on the court that was encouraging on both sides.
Olivier Loeillot: Good morning.
Olivier Loeillot: So let me start with capital equipment. Yeah, we're obviously very delighted by the performance we've had in quarter two. You might remember, like, we were pretty optimistic in quarter three and quarter four of last year. But then for me, quarter one was a little bit lower. So it was really great to see like all of these funnels we were talking about in quarter one to materialize and generate both very high sales and orders in in the quarter two. So we think it's probably very much linked to the differentiated nature of our systems. As you know, we are including our PAT technologies in many of our systems right now.
Olivier Loeillot: In fact, I think 25% of any system we sold in the beginning of this year is including this FlowVPX technology. So that's definitely helping us a lot. I would also add, like, we are still a small actor in the field. I mean, so it's obviously easier to grow faster when you've got a smaller part of your business on that side. But we still feel like the differentiating nature of our portfolio, both on the ETF side but also downstream for both TFF and Chrome, is enabling us indeed to win some market share here. And then talking about China, yes, you're right.
Yeah, so that's that's good morning. So let me start with Capital Equipment. Yeah, we're obviously very delighted by the performance. We've had in quarter 2. You might remember like we were pretty optimistic in quarter 3 and quarter 4 of last year, but unfortunately, quarter 1 was a little bit lower. So it was really great to see like all of these funnel. We were talking about in quarter 1 to materialize and generate both very high sales and orders in in the quarter too. So we think it's probably very much linked to the differentiated the nature of our systems as you know, we are including our P Technologies in many of our systems right now. In fact, I think 25% of any system we've sold in the since the beginning of this year is including this flow VPX technology. So so that's definitely helping us a lot. I would also add like we are still a small actor in the field. I mean, so it's obviously easier to grow faster when you've got a smaller part of your business on that side, but we
Still feel like the differentiating nature of our portfolio post on the ATF side but also Downstream for both tff and chrome is enabling us, indeed to win some market share here.
Olivier Loeillot: I mean, we want to be a little bit careful here because we've had so many quarters in a row of a difficult situation. Like we were extremely happy to see such a huge rebound of orders in quarter two. In fact, our orders grew more than 40 percent versus quarter two of last year. So we do think there is a little risk of acceleration here. That's why I mentioned earlier, probably for a couple of million. I think beyond that, we are delighted by having our new team in place. Both at Global Asia, but also China leadership.
Olivier Loeillot: And we start to see a huge difference on customers reopening doors to us and listening to the great innovation we are capable to sell. I'm very bullish on China, as you heard previously. I think this market is going to start to grow again very nicely from 2026 onwards. And we want to play a big role down there.
And then talking about China. Yes, you're right. I mean, we want to be a little bit careful here, because we've had so many quarters in a row of of difficult situation. Like, we were extremely happy to see such a huge rebound of orders in quarter 2. In fact, our orders grew more than 40% versus quarter 2 of last year. So we, we do think there is a little risk of acceleration here. That's why I mentioned earlier, probably for a couple of million. I, I think beyond that we are delighted by having our new team in place both at the global Asia. But also China leadership and we start to see a huge difference on customers reopening doors to us and listening to the great Innovation. We are capable to sell. I'm very bullish on China. As you heard previously, I think this Market is going to start to grow again. Very nicely from 2026 onwards and we want to play a big role down there for sure.
Matt Larew: Okay, thank you, and then as a follow-up, biotech up high teens, reference orders remain muted, but that was down high single digits last quarter. So maybe just trying to get a sense whether there's fits and starts here, whether it's larger orders or perhaps a couple of accounts that are driving it, just trying to assess kind of the flip and growth this quarter and how we should think about that going forward. Thank you. Yeah, no, there is still one of the market segments that I'm very, very careful about that is still this small biotech one. And yes, it was great to see our sales going up significantly this quarter, high teens as you mentioned, but indeed, all those were muted.
Okay, thank you and then as a follow-up uh, biotech up High Teens reference, orders will remain muted, but that was down high single digits last quarter. So maybe was trying to get a sense, whether there's fits and starts here, whether it's larger orders or perhaps a couple of accounts that are driving. It just trying to assess kind of the flipping growth, this quarter. And and how we should think about that, going forward. Thank you.
Olivier Loeillot: So as we do, like probably everybody else, we're tracking the funding of biotech. And unfortunately, Q2 funding was not very high. I mean, it was a little bit higher than quarter one at $8.7 billion versus $8 billion. But this is still a drop of 42% versus Q2 of 2024. So obviously, there is still some headwind on that side. We were happy by sales, but we are not sure we can still claim victory on that side. All right. Thank you, Matt.
Yeah, no. Is there is still 1 of the market segments that I'm very, very careful about that is still this small biotech 1 and yes was great to see our sales going up significantly. This quarter High Teens as you mentioned but indeed others were muted. So as as we do like probably everybody else who are tracking the funding of Biotech and andronic Q2 funding was not very high. I mean was a little bit higher than quarter 1 at 8.7 billion versus 8 billion. But this is still a drop of 42% versus Q2 of 2020 4. So so obviously, there is still some headwind on that side. We were happy by itself, but we are not sure we can still claim victory on that side.
All right. Thank you, Matt.
Dan Arias: And our next question comes from the line of Dan Arias with Stiefel. Dan, please go ahead. Good morning, guys. Thank you.
And our next question comes from the line of Dan eras with stifles. Dan. Please go ahead.
Dan Arias: My one question is just a clarification on the outlook here. Jason, the 1% headwind that's been worked into the guide, that sounds like it's directly tied to the specific platform that you mentioned. So not really adjusting for pressure at the industry level, but you mentioned the assumption for new modalities is muted in the back half. So can you maybe just more explicitly talk to Account Specific Expectations versus what you're now thinking for the overall new modalities class and then how that's changed and how that relates to the growth outlook for the year. Thank you.
Yeah, good morning guys. Thank you my 1 question is just a clarification on the outlook here. Jason the 1% headwind that's been worked into the guide that sounds like it's directly tied to the specific platform that you mentioned. So not really adjusting for pressure at the industry level but you mentioned the Assumption for new modalities is muted in the back half. So can you maybe just more explicitly talked to
Um, account-specific expectations versus what you're now thinking for the overall, new modalities class and then how that's changed, and how that relates to the growth outlook for the year. Thanks.
Olivier Loeillot: Yeah, so I think I'll take this one, Dan. So I think indeed, you're right. I mean, with the headwind, we mentioned one person is coming from that specific platform. But the good news is we are capable to more than compensate for it, which is why, thanks to the portfolio's strength, that's why we decided to increase our guidance for this year. And if you think about it, it's really across the board. I mean, remember, like the majority of our business is going into monoclonal antibodies, and the monoclonal antibody market is doing very well. And we are benefiting from a lot of win across our entire portfolio.
Olivier Loeillot: So that's really where we are. We are seeing so much goodness really during the last two quarters with orders now that are year to date, more than 20% that this is going to be more than capable to compensate for that specific headwind on that new modality program. But beyond that one, I mean, your modality has still been doing pretty well. I mean, I mentioned earlier, we've been growing 10% so far. We indeed estimate that probably sales will be more muted in terms of growth during the second half, but that's going to be more than being compensated by the rest of the portfolio here.
Yeah, so last thing I'll take this 1 then so I think indeed you're right. I mean we see the the headwind we mentioned 1 person is coming from that specific platform, but the good news is we are capable to more than compensate for it, which is why thanks to the portfolio strengths. So, that's why we, we decided to increase our guidance for, for, for this year. And if, if you think about it, it's, it's really across the board. I mean, remember, like the majority of of our business is going into monocular antibodies and the monoclonal antibody Market is doing very well and we are benefiting from a lot of win across our entire portfolio. So that's really where where we are we are seeing so much goodness really doing the
The last two quarters with orders now that are here to date are up more than 20%, which is going to be more than capable of compensating for that specific headwind on that new modality program. But beyond that one, I mean, your modality has still been doing pretty well. I mentioned earlier, we've been growing 10% so far. We indeed estimate that probably sales will be more muted in terms of growth during the second half, but that's going to be more than compensated by the rest of the portfolio here.
Dan Arias: All right, well, thank you, Dan.
Doug Schenkel: And our next question comes from the line of Doug Schenkel with Wolf Research. Doug, please go ahead. Good morning, everybody, and thank you for taking me on the call. One topic, the revenue growth outlook. You talked about growing five points better than market growth. First, what do you think market growth is? Our model supports an outlook in a normal period for high single digit to low double digit growth for the category. Does that seem reasonable to you? Second, does five points hold up even if new modalities remain under sustained pressure? And then third, you talked about doubling revenue in the medium term.
All right. Well, thank you, Dan.
And our next question comes from the line of Doug Shankle. With wolf research, Doug, please go ahead.
Olivier Loeillot: Could that be as soon as three years? Okay, so a lot of questions, Doug. I'm going to try to remember all of them. So the first one really is, yes, we've always said we estimate this market to be growing anywhere between 8% and 12% prior to COVID. I mean, at least from what we're seeing from a Repligen point of view, we think bioprocessing is really almost back to where it was before COVID. So yeah, you would say probably your tax year is going to be 8% growth, a good year would be 12%. And we think like with what we have right now in our portfolio, and again, that's one thing I liked among others in this quarter is every single franchise has been doing very well.
Good morning everybody. And thank you for, uh, taking me on the call, uh, 1 topic. Uh, the revenue growth Outlook, you talked about growing 5 Points better than market growth. Um, first, what do you think market growth? Is our model supports an Outlook in a normal period for high, single digits to low double digit growth. For the category. Does does that seem reasonable to you? Second does, you know 5 Points? Hold up? Even if new modalities remain under sustained pressure and then third, you talked about doubling Revenue in the medium term could that be as soon as 3 years, thank you.
Olivier Loeillot: So that's a good signal for us that we're going to be indeed capable to grow faster than the rest of the market.
Olivier Loeillot: I think I'll capture your last question first now and then go back to the second one. In terms of the doubling of the size of our business, our strike plan is typically five years. And I think everybody understands midterm to be five years. Obviously, what's the moving piece here is the M&A activity that might happen or not happen in the next five years. We said like we are counting on modest M&A to be able to double the business, which doesn't mean we're only going to do modest M&A. But in order to double the business, we would only need modest M&A to achieve that.
Okay, so a lot of questions I'm going to try to remember all of them. So the first 1 really is. Yes. We we've always said we estimate this Market to be growing anywhere between 8 and 12 person prior to Coe. I mean, at least from what we're seeing from a repeat Jen point of view we think bioprocessing is really almost back to where it was before coid, so, yeah, you would say probably a tax year is going to be 8% growth. A good year would be 12. And uh and we think like with what we have right now in our portfolio and again, that's 1 thing I like among others in this quarter, is every single franchises have been doing very well. So, so and that, that's a good signal for us, that we're going to be indeed capable to grow faster than, than, than the rest of of the market. I, I, I think, I, I'll capture your last question first now. And then I go back to the second 1 in term, of of the doubling of, of the size of, of our business, our track plan, is typically 5 years. Um, and I think everybody understand midterm to be 5 years, obviously,
Olivier Loeillot: But for us, the strike plan is five years typically. And then do you want to repeat your second question, maybe? Yes, it was really just about the five, sorry, the five points better than market. Does that hold up even if new modalities remain under sustained pressure? That's it. So no, absolutely, Doug. And again, you heard me repeating several times, the way we operate is to make sure we are working across multiple modalities, across multiple customers, and at each of these customer across multiple programs they have as a customer. And that's why we mentioned several times that on new modality, we constantly have about 20 plus customers that are generating more than a million US dollar sales.
What what's what's moving piece? Here is the m&a activities that might happen or not happen in the next 5 years. We we said like we are counting on Modest m&a to to be able to double the business, which doesn't mean we're only going to do modesty many. But in order to double the business, we would only need modest estimate to achieve that. But for us a strat plan is 5 years. Typically. Yeah. And then you want to repeat your second question. Maybe.
yes, it was really just about um, the fee, the sorry, the um 5 Points better than Market does that hold up, even if new modalities remain under sustained pressure
Olivier Loeillot: In fact, in quarter two, we had five of these customers generating more than 1 million of sales. And then I mean, where maybe there is more headwind today on gene therapy, we are starting to see a lot of excitement and great opponents coming from cell therapy, but also on the ADC side as well. So and luckily enough, we decided to add one specific resources about six months ago to focus on some of these other new modalities. So yeah, we're absolutely confident about being able to deliver that 5% above market growth, even with some of the potential headwind and some specific new modalities today.
Doug Schenkel: Great. Thank you very much.
We constantly have about 20. Plus customers that are generating more than a million US dollar sales. In fact, in quarter 2, we had 5 of these customer generating more than 1 million of sales. And then, I mean, where maybe there is more headwind today on gene therapy, we are starting to see a lot of excitement and and great opportunities coming from Cell Therapy but also on the ADC side as well. So and luckily enough, we decided to add 1 specific resources about 6 months ago to focus on some of these other new modalities. So yeah, we're actually confident about being able to the to deliver that 5% above market growth, even with some of the potential headwind and some specific new modalities today. Yes.
Great, thank you very much.
Rachel Votendal: Thanks, Doug. And our next question comes from the line of Rachel Votendal with J.P. Morgan. Rachel, please go ahead. Perfect. Good morning. Thanks so much for taking the questions. I wanted to dig into the equipment trends you saw in the quarter given the strength in equipment revenues, but also orders. We've heard from a few of your peers in the industry calling out a pause in equipment orders due to that global trade uncertainty. So can you spend a minute talking about your conversations with customers given that backdrop? Did you see any pause in equipment orders due to that global tariff dynamic?
Thanks Doug.
And our next question comes from the line of Rachel vaten doll with JP Morgan Rachel. Please go ahead.
Perfect. Good morning. Thanks so much for taking the questions. I wanted to dig into the equipment Trend. You saw in the quarter, given the strength and Equipment revenues, but also orders, um, we've heard from a few of your peers in the industry, calling out a pause and Equipment orders due to that global trade uncertainty. So can you spend a minute talking about your conversations with customers? Given that backdrop? Did you see any positive equipment orders due to that Global terrorist dynamic?
Olivier Loeillot: So good morning, Rachel. No, not really, honestly. Again, if you look at the last four quarters for us on equipment, the anomaly for us was really quarter one. Because with all of the product launches we've had now over the last two to three years, both on the ATF side, but also Chrome and TFF systems, we've built a very strong funnel. So for me, really, the anomaly was more Q1, where there was a lot of delays of customers making the decision to buy those equipment, where in quarter two, we've seen a very big difference on that side.
Olivier Loeillot: And again, as I mentioned earlier, our systems are very differentiated. Also, to be fair, we've got a pretty small market share, so it's easier to grow faster when you have a small market share than when you have the market in your hands. So that's definitely how it played out. And then from a geographical point of view, I would say we've been growing very nicely across the three regions. So we've really not seen any specific behavior from US customers with the potential upcoming on showing of investment or with some of the customers in Asia either. So it's really very much across the board here.
So good morning Rachel. No no not really. Honestly again if you look at the last 4 quarters for us on equipment. The and normally for us was really quarter 1. And because we we with all of the product launches, we've had now over the last 2 to 3 years, both on the ATF side, but also Chrome and tff systems. We we built a very strong funnel. So, for, for me, it is, yeah, I normally was more q1, where there was a lot of delays of customers, making the decision to, to buy those equipment. Where important to, we we've seen a very big difference on that side. And, and again, as I mentioned earlier, our systems are very differentiated. But also to be fair, we we've got a pretty small market share, so it's easier to grow faster when you have a small market share than when you have the market in your hands. And so, that's definitely how it played out. And then from a geographical point of view, I would say we've been growing very nicely across the 3 regions. So we've really not seen any specific behavior from us customers with
The potential upcoming investments or partnerships with some of the customers in Asia either. So it's really very much a crossroad here.
Rachel Votendal: Great, and then a quick follow-up. Just on AAV exposure, you had previously disclosed that last year new modalities were roughly 18% of revenues and you'd estimated that roughly two-thirds of that was tied to AAV, which would imply roughly 12% of total company revenues. Given all the moving pieces, the last few months, and even what you've kind of given us on this call, can you provide us some updated estimates on your total AAV exposure for this year? Yeah, I will, Rachel, and that's a great question. As you know, we typically update the exact number only once per year at the end of the year.
Great. And then a quick follow-up. Just on AEV exposure. You had previously disclosed that last year. New modalities were roughly 18% of revenues, and you'd estimated that roughly 2/3 of, that was tied to aav, which would imply roughly, 12%, of total company revenues given all the moving pieces, the last few months, and even what you kind of given us,
On this call. Can you provide us some updated estimates on your total aav exposure for this year?
Olivier Loeillot: But obviously, with the current headlines and so on, we looked a little bit deeper. So I'll start by telling you, this year so far, new modalities represented 17% of our sales. So it's down a little bit compared to last year. And if you look at growth across the board, I mean, we've been growing 10% on new modalities, where the rest, the entire company has been growing 15%. So it's obvious that some of these headwinds have already slowed down a little bit of growth that could have been even higher, in fact, if new modalities would have been doing better.
Yeah, no, no, I will reach the end. That's a great question. As, you know, we typically update the exact number only once per year at the end of the year, but but obviously for, for, with the current headlines and so on, we, we looked a little bit deeper. So, I I, I start,
Olivier Loeillot: So we also check whether, because it's always very difficult, and we mentioned that several times, I mean, there is so much you know about where your products are really going into, particularly at CDMOs, who are, in many cases, reluctant to give you the exact number. So we estimate that the AAD component of our new modalities is lower than what we thought at the end of last year. And for different reasons, we would deep dive much more than we did probably earlier. But also, we've seen new modalities picking up very nicely, one of them being cell therapy, where we've seen a very big growth happening, passing in quarter two versus quarter one and versus quarter two of last year.
By telling you since you're so far new modalities represented 17% of our sales. And so it's down a little bit compared to last year and if you look at growth uh across the board I mean we we've been growing 10% on new modalities where the rest the entire company has been growing 15%. So it's obvious that some of these headwinds have already slowed down a little bit. The growth that could have been even higher in fact, if new modalities would have been doing better. And so we also check whether because it's always very difficult and we mentioned that several times, I mean there is so much, you know, about where your products are. We going into party at cdmos where in many cases, reluctant to give you the exact number. So we estimate that the AV component of our new modalities is lower than what we thought at the end of last year. And and for for different reasons we we Deep dive much more than we did probably earlier but also within new modalities, speaking of very nicely 1 of them,
Rachel Votendal: So overall, yes, gene therapy is still an important modality for us. The last piece I would mention is beyond that specific program, we've seen absolutely no slowdown from any of the other customers. And then, you know, like every technology in gene therapy is very specific, and has got a different viral load and so on. So I think it would be dangerous to put everybody in the same basket at this stage. It's helpful. Thanks, guys. Thank you. Thanks, Rachel.
Being self therapy where we've seen a, a very big growth happening passing in quarter 2 versus quarter 1, and versus quarter 2 of last year. So overall, yes, gene therapy is still an important modality for us. The last piece I would mention is beyond that specific program. We've seen absolutely no slowdown from any of the other customer we and and you know, like every technology engine therapy is very specific and has got different viral load and so on. So it's I think I think it's would be done dangerous to, to to put everybody in the same basket at this stage here.
That's helpful. Thanks guys.
Thank you. Thanks. Rachel
Luke Sergott: And our next question comes from the line of Luke Sergott with Barclays. Luke, please go ahead.
Luke, please go ahead.
Salem Salem: This is Salem Salem on for Luke. Thanks for taking our questions. I just want to drill down into the equipment strength again here. Was this mostly seen on the filtration side? I mean, what was kind of the main driver if not? And if you could size the ATF business now, currently as a percent of revenue, that would be appreciated. Yeah, sure. So the vast majority of our equipment is going into filtration. Because if you think about it, it's ATF on one side, which is filtration, and then it's our TFF system, which is a majority of our downstream system sales today.
This is Salem Salem on for Luke, thanks for taking our questions. I just want to drill down into the equipment strength again. Here. Um, was this mostly seen on the filtration side? I mean, what was kind of the main driver if not. And if you could size the ATF business, now, uh currently as a percent of Revenue, um, that would be appreciated, thank you.
Salem Salem: So the vast majority of our sales are going into filtration for equipment in ADM. Got it. That's super helpful. Thank you.
Yeah sure. So the vast majority of our equipment is going into filtration because if you think about it it's ATF on 1 side which is filtration and then it's our TFS system which is a majority of our Downstream system sales today. So the vast majority of our sales are going into filtration for for equipment in India.
Olivier Loeillot: And then kind of a cleanup question here. What's your split between equipment and consumables currently? I believe it was around 50-50 a couple of years ago. Are you still in that ballpark today? No, the split is 70-30. Again, to be updated at the end of the year as well, I mean, I would think we're going to slowly but surely see even more consumables than equipment, because that's the way it works for bioprocessing company. I mean, every time you sell equipment, you're going to get the revenue on consumables for the next five to 10 years. So it's going to probably move a bit more consumable in the future.
Got it. Uh, that's super helpful. Thank you. And then um kind of a, a clean up. Question here. What's your split between equipment and consumables? Currently is I I believe it was around 5050, a couple of years ago. Uh are you still on that that ballpark today?
No, there's a split of 70/30. Yeah, again, it is to be updated at the end of the year as well. I mean, I would think we are going to slowly but surely see even more consumables than equipment because that's the way it works for a bioprocessing company. I mean, every time you sell the equipment, you're going to get the.
Olivier Loeillot: But at this stage, we estimate it's about 70-30. Got it, thank you. Thanks for the question.
There's a revenue on consumable for the next 5 to 10 years. So it's going to probably move towards a bit more consumable in the future. But at this stage we estimate, it's about 7030. Yeah.
Got it. Thank you.
Paul Knight: And our next question comes from the line of Paul Knight with KeyBank.
Thanks for the question.
Paul Knight: Paul, please go ahead. Congratulations on the quarter. You know, there's, you know, clearly, there's a tremendous momentum in the CAR T market right now. What, what technologies really fit from Repligen? And what's your view on CAR T right now? Yeah, good morning, Paul. really good question. I mean, what we are really excited about lately is we start to see a lot of cell therapy customers starting to use our ATF technology. I mean, it's pretty obvious when you think about it, because cell therapy is all about getting a maximum amount of cells. So how do you get that?
And our next question comes from the line of Paul Knight with KeyBank. Paul, please go ahead.
Congratulations on the quarter. Um, you know, there's, you know, clearly there's a tremendous, uh, momentum in the car T market right now. Uh, what, what technologies, um, really fit from religion and what's your view on? Carti right now?
Olivier Loeillot: And I know ATF is the obvious solution for that. So this is really one of the drivers for us, where we start to see much more carty customers coming to us. But one of the things I said several times already is all of these new modalities are going through two waves. I mean, you've got the first wave where everybody's excited about it. And then you enter into a bit of a hangover period where people start to see cost of goods are more challenging, where people start to see from a regulatory point of view, it's more challenging than expected, and so on.
Yeah, good morning. Paul really good question. I mean, what we are really excited about lately is we start to see a lot of sales therapy customers starting to use. Uh, our ATF technology. I mean, it's it's pretty obvious when you think about it because, uh, it says therapy is all about getting a maximum amount of sales. So how do you get that? And I know ATF is the obvious solution for that. So this is really 1 of the driver for us where we start to see much more carti customers coming to us, but but 1 of of the thing, I said, several times already is all of these new modalities are going through 2 ways. I mean you've got the first waves where everybody is excited about it and then you want to turn into a bit of Hangover period where people start to see cost of goods are more challenging
Olivier Loeillot: And then comes the second wave. I really believe we are entering into that second wave right now for cell therapy. And it's not only carty. I mean, we see kind of the same happening lately with allogenic as well. So I personally think that cell therapy in general will be entering into that new phase of growth.
Olivier Loeillot: And we, as a very innovative bioprocessing company, we have a very important role to play on that side, for sure. Is your quiet optimism on China due to the fact that they seem to be a rapidly developing originator? Yeah, that's part of it. Obviously, Paul, I mean, beyond that, look at the amount of money that is being injected right now into the system. And some of you might have heard me saying earlier, one of the main reasons why China went through a real turmoil during the last several years was not so much because of the geopolitical issues, but was mostly because the government has decided to shift completely from focusing on biosimilars to focusing on innovation, innovative drug development.
Where people start to see from a regulatory point of view, it's more changing than expected and so on and then comes the second wave. I really believe we are entering into that second wave right now for self therapy and it's not only Ki. I mean, we see kind of the same happening lately with allogenic as well. So I I personally think that sells are in general will be entering into that new phase of growth and we as a very Innovative bio Processing Company, we have a very important role to play on that side for sure.
Is your quiet optimism on China, due to the fact that they seem to be a rapidly, developing originator.
Olivier Loeillot: And here we are now, five years later, where they've done so much on the antibody side, partly by specific, but also antibody drug conjugates that this country is now the second largest pipeline of innovative drugs on the market. And that we see a lot of U.S. and European companies starting to buy IP from China. So when you look at the billions of U.S.
Yeah, that's part of it. Uh, obviously, Paul. I mean be beyond that is. Look at the amount of money that is being injected right now into the system then. So some of you might have heard me saying, earlier 1 of the main reason. Why China went through a real thermal during the last several years, was not so much because of the geopolitical issues, but was mostly because of government has decided to ship completely from focusing on Bayou, similar to focusing on Innovation Innovative drug development. And here we are now 5 years later where they've done so much on on, on the antibody side partly by specific but also antibiotic conjugates that this country is now the second largest pipeline of innovative drugs on the market and that we see a lot of us and European companies starting to buy.
Olivier Loeillot: dollars that are going to be injected back in the China ecosystem, it's obvious that there will be a lot of good business to make down there, which is why we brought that new leadership and why we're starting investing quite heavily in China in particular. Thanks Olivier. Thank you.
IP from China. When you look at the billions of U.S. dollars that are going to be injected back into the China ecosystem, it's obvious that there will be a lot of good business opportunities down there. This is why we bought that new leadership and why we're starting to invest quite heavily in China in particular.
Thanks Olivia.
Justin Bowers: And our next question comes from the line of Justin Bowers with Deutsche Bank. Justin, please go ahead. Justin, you may be muted. Thank you. Good morning, everyone.
Thank you.
With Deutsche Bank, Justin, please go ahead.
Justin, you may be muted.
Jason Garland: Can you help us understand what the strategy session revealed about the margin trajectory over the next five years, both gross margins and EBIT, and then drilling down a bit more, just the moving parts on the margins for this quarter and the outlook for the next year? I'm a little confused about tariff and FX. Thank you. Yeah, sure. So, again, with the strapline that we went through, a lot of focus on how we can grow the top line in the markets. But to your point, we bring that down to the gross margin and the operating or EBITDA margin level.
Thank you. Good morning, everyone. Can you help us understand what the strategy session revealed about the margin trajectory over the next 5 years. Both gross, margins and ebit, and then drilling down a bit more. Um, just a moving Parts on the margins for this quarter and the outlook for the next year, I'm a little confused about, um, tariff and FX, thank you.
Jason Garland: So, again, we continue to see a path for a margin expansion year over year over that next sort of five-year window, still targeting to get towards the 30% EBITDA. So, that will be in the cards. It'll be a mix of continuing to drive productivity within our footprint and our manufacturing plans, driving volume leverage and obviously the ability to take price, I'll say modestly, through the course of the period. So, it's a good outlook for the year or for the quarter. I'm sorry. For the, just for the quarter.
Yeah, sure. So um, again with the the strap plan that we went through, uh, a lot of focus on how we can grow the Top Line in the markets. But but to your point, we bring that down to, to the to the gross margin in the in the operating or ibido margin level. So again, we kind of, we continue to see a path through the margin expansion year-over-year over that next sort of 5 year window, still targeting uh, you know, to get towards the, the 3030, uh, percent ibida. So that that will be in the cards. It'll be a a mix of continuing to drive, um, you know, productivity within our footprint and our and our manufacturing plants, you know, driving volume leverage and obviously the ability to take uh take price. Uh, I'll say modestly through the course of the period so it's a good outlook for the for the year or for the quarter
Nervous. But
Jason Garland: Look, first, I'll start with the year sort of view. Look, we continue to see a path to expand margin in 2025, consistent with our guidance. There's no change. We see, you know, we expect 160 to 260 basis points for gross margin, gross margin rather, and 60 to 160 basis points for operating margin. We started the year really well in first quarter, right? And a lot of that was some benefits from, from proteins and the mix that came with it. So that reversed in the second quarter. And then we also called out that, that we had a high amount of chromatography sales in the quarter.
Jason Garland: And in fact, the highest quarter of resin passed through. So this is resin that we procure and then, and then within the, within our office columns at a, at a very slight markup. And so that mix alone was, you know, north of 300 to 350 best of, of sort of sequential college pressure. You know, from an operating margin, we also had now 908 that we consolidated for a full quarter, right? We only had one quarter in one month rather in one queue. And so though FX was a help, it was a benefit. Tariffs was a little bit of a drag.
Oh, I'm sorry. For for the, uh, just for the, the quarter. Um, look, first I'll start with the year. Sort of you look, we we continue to um, see a path to expand margin in in 2025 consistent with our our guidance. There's no change. We see uh you know, we expect 160 to 260 basis points for ghost, margin gross margin rather than 60 to 160 basis points for operating margin. We started the year really well in first quarter, right? And a lot of that was some benefits from from proteins, um, and the mix, uh, that came with it. So that reversed in the second quarter and then we also called out that that, um, we had a high amount of chromatography sales in the quarter and in fact, the highest quarter of resin passed through. So this is resin that we procure and then and then sell within the within our Opus columns at a, at a very slight markup. Um, and so that mix alone was, you know, north of 3.
Jason Garland: But then all that, we also generated, you know, north of two, 250 basis points of, of margin increase from volume and the operating performance. So, you know, we're north of 52% gross margin for the first half. We expect about a 100 BIP sequential pickup in the third quarter versus two queue from kind of unwinding that unfavorable mix. And then, and then another step up probably 100 BIPs in the fourth quarter, just on, on highest volume or high volume with, with fourth quarter being our highest, you know, sales quarter. So, and then for, you know, that will fall through that margin.
3000 to 350 bits of, of, sort of sequential call it, um, pressure. Um, you know, from an operating margin. We also had, uh, now 9008 that we Consolidated for a full quarter, right? We only had 1 quarter in in or 1 month rather in 1 q. And so, um, though FX was a help, it was a benefit tariffs was a little bit, uh, of a drag. Um, but then all that we also generated, you know, North to 2 250 basis points of of margin.
Jason Garland: And then we expect, you know, our, our OPEX to remain flattish through the year. We had a couple of discrete kind of one-time items in the quarter that unwind and then we'll continue to invest in and drive, you know, commercial spending and, and fit for growth investment.
Jason Garland: So, I think we're balancing this, this mix of strategic investments for growth and, and disciplined cost management for margin expansion. Thanks, Jason.
Increase from volume and and the operating performance. So, you know, we're north of 52%. Uh, gross margin for the first half. We expect about a 100 bipin that unfavorable mix. And then uh and then another step up uh probably 100 bips in the fourth quarter just on on highest volume or high volume with with uh fourth quarter being our highest, you know, sales quarter. So and then for you know that will fall through to OPM margin. Um and then we expect, you know, our our Opex to remain flattish through the year. We had a couple discreet kind of 1 time items in the quarter that unwind and then we'll continue to invest and and drive, uh, you know, commercial spending and and fit for growth Investments. So, uh, I think we're balancing this, this mix of strategic Investments for growth and, and discipline cost management for margin expansion.
Jason Garland: Quick follow up on the pricing. What is what is the pricing assumption over the interim or the strategic period? And how's that? How's it tracking this year in 2025? Yeah, we assume low single digit. And that's that's where we what we've achieved so far this year for the first half. And, and, you know, again, it's similar to what we've achieved, or we would, you know, assume for the five year period. Thank you. Thanks, Justin.
Thanks Jason quick, follow-up on on the pricing. What is what is the pricing assumption over? The the interim where the Strategic period and, and, how's that, how's that tracking this year in 2025?
Yeah, we we assume low single digit and that's, that's where we what we've achieved so far this year for the first half. And, and, um, you know, again, it's it's similar to what we had achieved or we would, uh, you know, assume for the, the 5 year period.
Thank you.
Matt Hewitt: And our next question comes from the line of Matt Hewitt with Craig Hallam Capital Group. Matt, please go ahead. Good morning. Thanks for taking the question.
Thanks Justin.
And our next question comes from the line of Matt Hewitt with Craig Hallam Capital group. Matt, please go ahead.
Olivier Loeillot: Maybe as you look at the back half of the year, and maybe even start to think about 2026, how should we be thinking about new product launches? And are there any key launches that you might want to call out as potential drivers as part of that five year process?
Olivier Loeillot: Thank you. Good morning, Matthew. So as you know, we launched already two key products this year. We launched a new version of our analytical CTEQ protein concentration Solo, Solo VPA Plus. And then we also launched our mixers based on the Metanova technology, single use mixers at the beginning of quarter two. The next big launches for us will be across protein franchises, where we've got multiple reasons that are going to be launched, mostly targeting new modalities, but really across different modalities in the second half of this year. And in terms of these product generating sales, in the very short term, typically there is a bit of a lapse of time between the time you launch a product and the time you start to regenerate a lot of sales, which can be up to about a year or so.
Good morning. Thanks for taking the question. Uh maybe as you look at the back half of the year and maybe even start to think about 2026. How should we be thinking about new product launches and our any are there any key launches that you um might want to call out as potential drivers as part of that 5 year process? Thank you.
Olivier Loeillot: There have been some exceptions. I mentioned earlier, partly on the resin side, one of the products last year generated really important sales right after. But in most cases, there is a little bit of lapse of time between the launch and generating significant sales.
Matt Hewitt: We've got it, thank you. All right, thanks, Matt.
And then we also launched our mixers based on the meta, Nova technology thing, you single use mixers at the beginning of quarter 2. So next big launches for us will be across the protein franchises, where we've got multiple reasons that are going to be launched mostly targeting new modalities but but really across different modalities in the second half of this year and in term of these 6 product generating sales in the very short. Um, typically there is a bit of a lapse of time between the the time you launch a product and the time you start to regenerate a lot of sales which can be up to about a year or so um, there have been some exception. I mean as we we mentioned earlier party on the raisin side 1 of the product last year. Generated really important sales right after but in most cases, there is a little bit of lapse of time between the launch and generating significant sales. Yeah.
Got it. Thank you.
Subhu Nambi: And our final question today comes from the line of Subhu Nambi with Guggenheim Security. Please go ahead. Thank you for taking my question. Olivier, thank you for sharing all the details. Investors would like Tangible KPIs to track Repligen's progress towards the 5% growth of the market that you mentioned today.
All right. Thanks Matt.
And our final question today comes from the line of subu nambi with Guggenheim Securities subunit. Please go ahead.
Olivier Loeillot: It would be really helpful if you could walk us through any big wins for ATF or any other major products expected either this quarter or something that we're anticipating in the second half of the year. Can you repeat the question? Your line is a little fuzzy. So, investors would like tangible KPI to track repligens progress towards the 5% growth above the market that you mentioned today. It would be really helpful if you could walk us through any big wins for ATF or any of the major products we expect in this market. or even second. Okay, your voice is very difficult to understand.
Hey guys, thank you for taking my questions. All of you. Thank you for sharing all the details. Um, investors would be tangible kpis to track represent progress towards the 5% growth of the market that you mentioned today. So, it would be really helpful. If you could walk us through any big events for ATM for any other major products inspected, either this quarter
Or something that you're interested in the second half.
So, could you repeat the question? Your line is a little bit fuzzy and very choppy.
Um so investors would like kpi to track represents progress towards the 5% growth of the markets that you mentioned. Today, it would be really helpful. If you could walk us through any big wins for ETFs or any other major products, we expect in this quarter.
Or even second half.
Olivier Loeillot: I think I understood what KPIs are we tracking to make sure we deliver 5% more than the rest of the market. So, I mean, we track a lot of KPIs, be sure about that. I mean, one of them is, and we didn't talk about it this time, is really the funnel we have, because beyond obviously the order intake, and I didn't mention it, but we have not, we've just had eight quarters in a row now where our orders were higher than sales. And as you know, we brought that book to bill concept several quarters ago.
Olivier Loeillot: Now it's eight quarters for us in a row where we've been significantly above one, but also it's five quarters in a row that our orders have been increasing sequentially. So, the only other stuff I didn't mention yet is funnel, because obviously when your order grows that fast, there is a risk that your funnel is slowly but surely becoming lower. The good news is our funnel still keep on growing as well. I mean, we, in fact, it's mid-teens higher than it was a year ago. So, that's one of the stuff we're tracking really very closely. In fact, every week I'm getting a date on my funnel to see how it's doing and so on.
Right. Okay? Yeah, yeah. Your voice is very difficult to understand but I think I understood, what kpis are we tracking to make sure we deliver 5% more than the rest of the market. So I mean, we we track a lot of kpi Ip sure about that. I mean 1 of them is and we don't talk about it this time. It's really the funnel we have because Beyond obviously the order intake and I didn't mention it, but we have not we've we've just had 8 quarters in a row now where our orders were higher than sales and as you know, we we brought that book to Bill concept to several quarters ago. Now it's 8 quarter for us in a row where we've been significantly above 1 but also its 5 quarter in the road that our orders have been increasing sequentially. So the only other stuff I didn't mention yet is, is funnel because obviously, when your order grows that fast, there is a risk as that your funnel is slowly, but surely becoming lower. The good news, is our funnel still keep on growing as well. I mean, we in fact, it's, it's
Olivier Loeillot: And then in terms of franchises, again, I mentioned every franchises have been doing really well. So, it's not that we're tracking one versus the other. Obviously everybody talks about ETF because we know we have a lot of traction. I mean, we had a record quarter of orders in quarter two for ETF, but that's just one product among many others where everybody else is doing very well as well. Apologies for the bad line. Thank you for that.
Meetings higher than it was a year ago for so that that's 1 of the stuff we're tracking really, very closely. In fact, every week, I'm getting update on my funnel to see how it's doing and so on. And, and then in term of franchises, again, I mentioned every franchises have been doing really well. So it's not that we're tracking 1 versus the other. Obviously, everybody talks about ATF because we know, we, we have a lot of traction. I mean, we had a record quarter of orders in quarter, 2 for ATS but that's just 1 product. Among many others, where everybody else is doing very well as well.
Jason Garland: Can I ask a follow-up? Can you achieve the market margin expansion even if you were not able to double the revenue in the midterm? Are there other levers you could still pull to achieve the margin expansion? Yeah, certainly volume will be a big part of our growth. But there are additional levers. When you look at the things that we're driving, we have our Repligen performance system, RPS, that's constantly driving productivity in the factories, we'll continue to optimize our footprint over the coming years. You know, we again, we talked about earlier, there's the ability to capture low single digit price.
I apologize for that line. Thank you for that. Uh, um, can I ask a follow-up? Can you achieve? The market margin expansion even if you were not able to double the revenue in the midterm, are there other levels you could still put to achieve the margin expansion.
Jason Garland: I think we're also building out a lot of muscles in our sourcing as well to help, you know, offset inflation or even drive that to a net benefit. So, you know, certainly the leverage will be a part of that story, but not the only piece, and we'll be focused on executing all of those and as well as kind of balancing that with growth, right, which is why we keep talking about the fit for growth sort of view of this, you have to, you know, be able to position yourself to meet that expansion as well. So we would certainly build that into our thinking.
Yeah. Certainly volume will be a big part of our of our growth. Um, but there are additional levers. When you look at the things that we're driving, we have our, our refuge in, um, performance system, RPS, that that's constantly driving productivity in the factories. We'll continue to optimize our footprint over the coming years. Um, you know, we we again, we talked about earlier there, there's the ability to capture those single digit price. Um I think we're also building out a lot of muscles in our sourcing as well to help you know offset inflation or even drive that to a net benefit. So you know certainly the
The Leverage will be a part of that story but not the only piece and, and we'll be focused on executing all of those and as well as kind of balancing that with, with growth, right? Which is why we we keep talking about the fit for growth, sort of view of this, you have to, you know, be able to position yourself to meet that, that, uh, expansion as well. So, um, we would, we would certainly build that into our thinking, so,
Cool. Thank you so much, guys.
Jason Garland: Thank you.
Unknown Executive: And that does conclude our... Oh, sorry, I was just gonna say that concludes our Q&A session.
Thank you.
Olivier Loeillot: So I will now turn the call back over to Olivier Loeillot for closing remarks.
Olivier Loeillot: Olivier. Yeah, thank you. I just wanted to thank everybody for joining us today. I mean, you heard we are really excited about the momentum we have in our business. We'd like just to thank all of our Repligen colleagues for helping us delivering these very strong results. And as you heard, we remain focused on our strategic plan for 2025. And we are looking forward to speaking with everyone again very soon. Thank you very much.
Oh, sorry. I was just going to say that concludes our Q&A session, so I will now turn the call back over to Olivia and Leo for closing remarks. Olivia.
Yeah, thank you. I just wanted to thank everybody for joining us today. I mean, you heard, we are really excited about the momentum. We have in our business would like just to thank all of our repeat and colleague for helping us delivering this very strong results. And as you heard, we remain focused on our strategic plan for 2025 and we are looking forward to speaking with everyone again very soon. Thank you very much.
Unknown Executive: Thank you, and ladies and gentlemen, again, that concludes today's call. Thank you all for joining, and you may now disconnect. Thank you. [music]
Thank you, and ladies and gentlemen. Again, that concludes today's call. Thank you all for joining, and you may now disconnect.
Thank you.