Q2 2025 Bio Rad Laboratories Inc Earnings Call

Gill: Thank you for standing by. My name is Gill, and I will be your operator for today's call. At this time, I would like to welcome each and every one of you to the BIORAD Second Quarter 2025 Results Conference Call and Webcast. All lines will be placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to read a question, kindly press star when again. It is now my pleasure to turn today's call over to BIORAD's Head of Investor Relations, Mr. Edward Chung. Please go ahead.

Thank you for standing by. My name is Gil and I will be your operator for today's call at this time. I would like to welcome each and everyone of you to the buyer. Right, second quarter, 2025 results conference call and webcast.

Edward Chung: Good afternoon, everyone, and thank you for joining us. Today, we will review the second quarter 2025 financial results and provide an update on key business trends for BIORAD. With me on the call today are Norman Schwartz, our Chief Executive Officer; Jon DiVincenzo, President and Chief Operating Officer; and Rup Lakaraju, Executive Vice President and Chief Financial Officer. Before we begin our review, I'd like to remind everyone that we will be making forward-looking statements about management's goals, plans, and expectations, our future financial performance, and other matters. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Our actual results may differ materially from these plans, goals, and expectations.

Alliance will be placed on you to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad, if you would like to be there, your question kindly press star 1 again, it is now my pleasure to turn today's call over to buyer, dad's head of investor relations Mr. Edward chunk. Please go ahead.

Good afternoon, everyone and thank you for joining us.

today, we will review the second quarter, 2025 Financial results and provide an update on key business trends for beograd

Edward Chung: You should not place undue reliance on these forward-looking statements, and I encourage you to review our filings with the SEC, where we discuss in detail the risk factors in our business. The company does not intend to update any forward-looking statements made during the call today. Finally, our remarks today will include references to non-GAAP financials, including net income and diluted earnings per share, which are financial measures that are not defined under generally accepted accounting principles. In addition to excluding certain atypical and non-reoccurring items, our non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG in order to provide investors with a better understanding of BIORAD's underlying operational performance. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release.

Ative officer, John D Vincenzo president and Chief Operating Officer and root block Raju, Executive, Vice President and Chief Financial Officer. Before we begin our review, I'd like to remind everyone that we will be making forward-looking statements about Management's goals, plans and expectations, our future, financial performance and other matters. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Our actual results May differ materially from those these plans goals and expectations.

You should not Place undue Reliance on these forward-looking statements and I encourage you to review our filings with the SEC where we discuss in detail. The risk factors in our business, the company does not intend to update any forward-looking statements made during the call today.

Edward Chung: We have also posted a supplemental earnings presentation in the Investor Relations section of our website for your reference. With that, I'll now turn the call over to our Chief Operating Officer, Jon DiVincenzo.

Finally, our remarks today will include references to non-GAAP financials, including net income and diluted earnings per share, which are financial measures that are not defined under Generally Accepted Accounting Principles. In addition to excluding certain atypical and non-recurring items, these non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG in order to provide investors with a better understanding of Bio-Rad's underlying operational performance. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release. We have also posted a supplemental earnings presentation in the Investor Relations section of our website.

Jon DiVincenzo: Thank you, Ed. Good afternoon, everyone, and thank you for joining us today. We are pleased to share our second quarter 2025 results, which reflect solid execution across the business. Both revenue and operating margin exceeded consensus expectations, underscoring the strength of our portfolio and the discipline of our teams in a challenging and rapidly evolving macroeconomic environment. Our clinical diagnostics business remained stable, while our life science segment benefited from the strength in our process chromatography portfolio. Product mix and a continued focus on cost control and discretionary spending helped drive an outperformance in operating margin for the quarter. While we continue to face headwinds in the academic market due to constrained government funding, we saw signs of stabilization, particularly in consumables. This resilience highlights the enduring demand for our differentiated assays and reagents, including droplet digital PCR consumables, which saw high single-digit revenue growth versus 2024.

Website, for your reference with that. I'll now turn the call over to our chief operating officer. John de Vincenzo. Thank you Ed. Good afternoon, everyone. And thank you for joining us today.

We are pleased to share our second quarter 2025 results, which reflect solid execution across the business.

Both revenue and operating margin exceeded consensus expectations.

I'm just going to have our portfolio and the discipline of our teams in the challenging and rapidly evolving, macroeconomic environment.

Our clinical Diagnostics business remains stable while our life science segment benefited from the strength in our process chromatography portfolio.

Product mix and a continued. Focus on cost control and discretionary spending helped drive at outperformance in operating margin for the quarter.

While we continue to face headwinds in the academic market due to constrained government funding, we saw signs of stabilization, particularly in consumables.

Jon DiVincenzo: The second quarter was a busy one for our DDPCR team as we completed the development of the QX Continuum platform and successfully closed the acquisition of Stillate Technologies, adding new platforms and a fantastic team of colleagues to BIORAD. Synchronized with the closing of the Stillate acquisition, we launched the rebranded QX700 series DDPCR instruments. The combination of the QX Continuum and QX700 series products are positioned to expand our droplet digital PCR portfolio for customers requiring a simplified workflow and flexibility at various budget levels. Although it is early, customer feedback has been very positive. We look forward to showcasing these innovations at the upcoming DDPCR World Conference in Seoul, Korea, this September, along with a series of satellite events across APAC, EMEA, and the Americas. Also during the quarter, several of our key DDPCR partners made progress in bringing this technology to the diagnostic market.

This resilience highlights the enduring demand for our differentiated assays and reagents, including droplet digital PCR consumables, which saw High single-digit Revenue growth versus 2024

The second quarter was a busy 1 for our ddpcr team. As we completed the development of the QX, Continuum platform and successfully closed the acquisition of still a Technologies. Adding new platforms and a fantastic team colleagues to buy red.

Synchronized with the closing of the still acquisition, we launched the rebranded QX70 series ddpcr instruments, the combination of the QX, Continuum, and QX 700 series products are positioned to expand our droplet, digital PCR portfolio for customers, requiring, a simplified workflow and flexibility at various budget levels.

Although it is early, customer feedback has been very positive.

We look forward to showcasing showcasing these Innovations at the upcoming ddpcr World Conference in Soul Korea. This September along with a series of satellite events across APAC, Amia, and the Americas.

Jon DiVincenzo: Insight Molecular Diagnostics, formerly Oncocyte, announced positive clinical data for its assay in kidney transplant monitoring. We are supporting its path toward FDA approval in 2026 and the development of a kitted IVD solution, an exciting advancement for the transplant community. Genioscopy advanced its ColoSense colon cancer screening test, which is powered by our DDPCR technology. The assay was recently included in the National Comprehensive Cancer Network guidelines, a critical enabler for clinical adoption and reimbursement. We're encouraged with their progress and the potential of ColoSense. Operationally, our teams continue to drive improvements through strong execution of lean initiatives, careful cost management, and actions to actively mitigate tariff impacts. In diagnostics, strength outside of China helped offset local reimbursement pressures, resulting in 3.7% growth in our rest of the world markets. In China, volume-based procurement, or VBP, has not impacted our portfolio.

Also, during the quarter, several of our key ddpcr Partners, made progress in bringing this technology to the diagnostic Market.

Insight molecular Diagnostics formerly Anka site and now it's positive clinical data for its assay in kidney, transplant monitoring

We are supporting his path toward FDA approval in 2026 and the development of a kitted IBD solution, an exciting advancement for the transplant community.

Geneoscopy Advanced its Cola sense colon cancer, screening tests which is powered by our ddpcr technology.

And Diagnostics strength outside of China, helped offset, local reimbursement. Pressures resulting in 3.7% growth in our rest of world markets in China, volume-based, procurement or vbp.

Jon DiVincenzo: Beyond the previously noted diabetes testing reimbursement reductions, we haven't faced any new reimbursement challenges. While we factored headwinds from the recent diagnosis-related group or DRG policy changes affecting diagnostic panels into our first quarter guidance, the impact was not significant in the second quarter. Our local team continues to diligently monitor the evolving landscape of Chinese government policies. And finally, I'm excited to welcome Rajat Mehta as BIORAD's new Executive Vice President of Global Commercial Operations. Rajat brings deep experience across diagnostics and life sciences, most recently leading a large regional diagnostics division of LabCorp. He has lived and worked globally and brings expertise in commercial transformation, digital innovation, and customer-centric strategies. Rajat succeeds Mike Crowley, who is retiring after a remarkable 26-year career with BIORAD. I have enjoyed working with Mike during my first year and personally thank him for his support.

Has not impacted our portfolio.

Face any new reimbursement challenges.

While we factored headwinds from the recent diagnosis Related Group or drg policy changes affecting diagnostic panels into our first quarter Guidance, the impact was not significant in the second quarter.

Our local team continues to diligently monitor the evolving landscape of Chinese government policies.

And finally, I'm excited to welcome Raja meta as brd's. New Executive Vice President of global commercial operations. Raj brings deep experience with Diagnostics and Life Sciences. Most recently leading a large like Regional diagnostic division of Lab Corp. He has lived and worked globally and brings expertise in commercial transformation, digital Innovation, and customer Centric. Strategies.

Jon DiVincenzo: We all wish Mike all the best in his retirement. So thank you again for your continued support. I'll hand the call over to Rup for a detailed review of our financial results.

Project succeeds Mike Crowley who is retiring after a remarkable 26 year career with biorad. I have enjoyed working with Mike during my first year and personally thank him for his support. We all wish Mike all the best in his retirement.

Rup Lakaraju: Thank you, Jon, and good afternoon. I'd like to start with a review of the second quarter 2025 results. Overall, we executed well during the quarter. Net sales for the second quarter of 2025 were approximately $652 million, which represents a 2.1% increase on a reported basis versus $638 million in Q2 of 2024. On a currency-neutral basis, this represents a 1% year-over-year increase and was primarily driven by sales of our process chromatography products. Sales of the life science group in the second quarter of 2025 were $263 million, compared to $251 million in Q2 of 2024, which is an increase of 4.9% on a reported basis and 3.8% on a currency-neutral basis, primarily driven by the increase in process chromatography and food safety product sales. Currency-neutral sales increased in the Americas and EMEA, partially offset by decreased sales in Asia-Pacific.

So, thank you again for your continuous support. I'll hand the call over to root for a detailed review of our financial results.

Thank you, John, and good afternoon. I would like to start with the review of the second quarter 2025 results. Overall, we executed well during the quarter. Net sales for the second quarter of 2025 were approximately $652 million, which represents a 2.1% increase on a reported basis versus $638 million in Q2 of 2024 on a currency-neutral basis.

Central basis, this represents a 1% year-over-year increase in was primarily driven by sales from our process chromatography products.

Rup Lakaraju: Our process chromatography business experienced strong double-digit growth on a year-over-year basis due to orders pulled into the second quarter by customers. The orders represented approximately 20% of the quarter's process chromatography sales. Zooming out of the second quarter results, we now expect low double-digit growth for this product area in 2025 versus our prior high single-digit growth outlook. Excluding process chromatography sales, our core life science group revenue decreased 1.7% year-over-year and 2.7% on a currency-neutral basis, reflecting ongoing softness in the biotech and academic research markets, which affects instrument demand. Sales of the clinical diagnostics group in the second quarter of 2025 were approximately $389 million, compared to $388 million in Q2 of 2024, essentially flat on a reported basis and a decrease of 0.7% on a currency-neutral basis.

Sales of the life science group in the second quarter of 2025 or 263 million compared to 251 million in Q2 of 2024, which is an increase of 4.9% on a reported basis and 3.8% on a currency neutral basis. Primarily driven by the increase in process chromatography and food, safety product sales, currency neutral sales, increased in the Americas and Amia partially offset by decreased sales and Asia Pacific.

our process chromatography business experience, strong double-digit growth, on a year-over-year basis, due to orders, pulled into the second quarter by customers, the orders represented, approximately 20% of the quarters, processed chromatography sales,

Zooming out of the second quarter results. We now expect low double-digit growth for this product area in 2025 versus our prior High single digit growth Outlook.

Excluding process chromatography sales, our core life science group Revenue, decreased 1.7% year-over-year and 2.7% on a currency neutral basis reflecting ongoing softness in the biotech and academic research markets, which affects instrument demand.

sales of the clinical Diagnostics group in the second quarter of 2025 were approximately 389 million,

Rup Lakaraju: The decrease is because of the previously discussed lower reimbursement rate for diabetes testing in China, partially offset by increased demand for our quality control and immunology products. On a geographic basis, currency-neutral sales decreased in Asia-Pacific, partially offset by increased sales in EMEA and the Americas. Q2 reported gross margin was 53% as compared to 55.6% in the second quarter of 2024. On a non-GAAP basis, second quarter gross margin was 53.7% versus 56.4% in the year-ago periods. The decrease in non-GAAP gross margin, excuse me, was due to higher material costs and reduced fixed manufacturing absorption because of lower instrument demand. SG&A expense for the second quarter of 2025 was $208 million, or 31.9% of sales, compared to $195 million, or 30.5% in Q2 of 2024. Second quarter non-GAAP SG&A spend was $201 million versus $194 million in the year-ago period.

Compared to 388 million in Q2 of 2024, essentially flat on a reported basis and a decrease of 7% on a currency neutral basis, the decrease is because of the previously discussed lower reimbursement rate for diabetes testing in China, partially offset by increased demand for our quality control and Immunology products.

On a geographic basis, currency neutral sales decreased in Asia Pacific partially offset by increased sales in Amia and the Americas.

Q2 reported gross margin was 53% as compared to 55.6% in the second quarter of 2024 on a non-gaap basis. Second quarter, gross margin was 53.7 versus 56.4% in the year ago. Period, the decrease in non-gaap gross margin. Excuse me was due to higher material, costs and reduced fixed manufacturing absorption because of lower instrument demand.

Rup Lakaraju: The year-over-year increase in non-GAAP SG&A expense was primarily due to higher variable compensation costs. Research and development expense in the second quarter on a GAAP and non-GAAP basis was $61 million, or 9.3% of sales, compared to $59 million, or 9.2% of sales in Q2 of 2024. A slightly higher year-over-year R&D was primarily due to project-related spending. Q2 operating income was $77 million, or 11.8% of sales, compared to $101 million, or 15.9% of sales in Q2 of 2024. On a non-GAAP basis, second quarter operating margin was 13.6% compared to 16.7% in Q2 of 2024, reflecting the lower gross margins. The change in fair market value of equity security holdings, primarily related to the ownership of Sartorius AG shares, contributed $250 million to our reported net income of $318 million, or $11.67 per diluted share.

Sgna expense for the second quarter of 2025 was 208 million or 31.9% of sales, compared to 195 million, or 30.5% in Q2 of 2024. Second quarter, non-gaap sgna, spend was 2011, million versus 194 million in the year ago period.

Year-over-year increase in non-GAAP. The best DNA expense was primarily due to higher variable compensation costs.

Research and development expense in the second quarter on a gaap. And non-gaap basis was 61 million or 9.3% of sales compared to 59 million or 9.2% of sales. In Q2 2024, a slightly higher year-over-year. R&D was primarily due to project related spending

Due to operating income of $77 million, or 11.8% of sales.

13.6% compared to 16.7% in Q2 of 2024, reflecting the lower gross margin.

Rup Lakaraju: Non-GAAP net income, which excludes the impact of the change in equity value of the Sartorius shares, was $71 million, or $2.61 diluted earnings per share for the second quarter of '25. Moving on to cash flow. For the second quarter of 2025, net cash generated from operating activities was $117 million, compared to $98 million for Q2 of 2024. Net capital expenditures for the second quarter of 2025 were $46 million, and depreciation and amortization for the second quarter was $41 million. Regarding free cash flow, we were pleased with the generation of $71 million, which compares to $55 million in Q2 of 2024. For the first six months of 2025, we generated free cash flow of $166 million, resulting in a year-to-date free cash flow and non-GAAP net income conversion ratio of 117%.

The change in fair market, value of equity, security Holdings, primarily related to the ownership of storious. AG shares contributed, 250 million to our reported net income of 318 million or $11.67 per diluted. Share non-gaap net income. Which excludes the impact of the change in equity value of the sartorio shares with 71 million or 2.61 cents diluted earnings per share for the second quarter of 25.

Moving on to cash flow for the second quarter of 2025. Net cash generated from operating activities was 117 million compared to 98 million for Q2 of 2024.

Net capital expenditures for the second quarter of 2025 were $46 million, and depreciation in the second quarter was $41 million.

Rup Lakaraju: We continue to target a full year of free cash flow of approximately $310 to $330 million for 2025. During June, we purchased an additional 170,860 shares of our stock for a total cost of $40 million, or an average purchase price of approximately $233 per share, on top of the $99 million share repurchase we called out for April. In aggregate, we bought back 593,508 shares during the second quarter for a total cost of $139 million, or an average price of approximately $234 per share. We will continue to be opportunistic with our buyback program and still have $337 million available for share repurchases under the current board-authorized program. Moving on to the non-GAAP guidance for 2025.

Regarding free cash flow. We are we were pleased with the generation of 71 million which compares to 55 million in Q2 of 2024. For the first 6 months of 2025, we generated free cash flow. 166 million resulting in a year-to-date free. Cash flow to non-gaap net income conversion ratio of 117%. We continue to Target full year of free cash flow of approximately 310 to 330 million for 2025.

During June, we purchased an additional 170,860 shares of our stock for total cost of $40 million for an average purchase price of approximately 233 per share on top of the 99 million share repurchase. We called out for April.

In aggregate. We bought back 593,508 shares during the second quarter for a total cost of 139 million or an average price of approximately 234 per share.

We will continue to be opportunities with our buyback program that still have 337 million available for share repurchases. Under the current board authorized program.

Rup Lakaraju: We are raising our 2025 full-year guide to reflect the Q2 results, the close of the Stillate acquisition, the evolving state of academic and biotech research funding, and the impact of changes in the macroeconomy, including tariffs. Overall, we now expect total currency-neutral revenue to be in the range of flat to 1% growth, with the midpoint approximately 25 basis points higher than our previous guide. With respect to our life science business, we see consumable demand from academic customers more durable than our prior expectations, in addition to an improved outlook for our process chromatography business that I called out earlier. With the recent close of the Stillate acquisition, we now expect revenue for our DDPCR portfolio to increase mid-single digit in 2025 versus low single digit previously. We continue to see a slow biotech recovery and soft demand for instruments.

Moving on to the non-gaap guidance for 2025, we are raising our 2025 full year guide to reflect the Q2 results, the close of the Stila acquisition, the evolving state of academic, and biotech research funding, and the impact of changes in the macro economy, including tariffs overall. We now expect total currency neutral Revenue to be in the range of flat to 1% growth with the midpoint approximately 25 basis points higher than our previous guide.

With respect to our life science business. We see consumable demand from academic, customers more durable than our prior expectations, in addition to an improved outlook for our process chromatography business. That I call that earlier,

with the recent close of the still acquisition. We now expect revenue for our ddpcr portfolio to increase mid single digit in 2025 versus low single digit previously.

Rup Lakaraju: In aggregate, we now expect our life science business to increase in the range of flat to 1% for the full year versus flat to down 3% previously. For our diagnostics business, we are further tightening our range to approximately growth of 0.5 to 1.5% for 2025 versus 0.5 to 2.5% previously. This represents a 50 basis point reduction at the midpoint and primarily reflects continued market softness. Reflecting the easing of trade tensions with China and delays in implementing tariffs in other regions, we now expect a reduced headwind of approximately 30 to 40 basis points to operating margin. The remaining tariff headwinds are primarily related to supplier costs in EU manufactured products that are imported to the US. Factoring in the reduced tariff headwind, the updated full-year non-GAAP gross margin is projected to be between 53.5% and 54.5% versus 53% and 54.5% previously.

We continue to see a slow biotech recovery and soft demand for instruments in aggregate. We now expect our life science business to increase in the range of flat to 1% for the full year versus flat to down 3% previously.

For our Diagnostics business. We are further tightening our range to approximately growth of 0.5, to 1.5% for 2025, versus 0.5 to 2 and a half 2.5% previously. This represents a 50 basis point reduction at the midpoint and primarily reflects continued Market softness,

Reflecting the easing of trade tensions with China and delays in implementing tariffs and other regions. We now expect a reduced headwind of approximately, 30 to 40 basis points to operating margins. The remaining tariff. Headwinds are primarily related to supplier costs and EU manufactured products that are imported to the US.

Rup Lakaraju: Full-year non-GAAP operating margin is now projected to be between 12% and 13% versus 10% and 12% previously, reflecting our updated gross margin outlook along with proactive cost actions we've taken in managing the business. We continue to anticipate incurring an IPR&D expense in the third quarter, as previously disclosed. Due to a further weakening of the US dollar, we now expect currency exchange to be approximately a 100 basis point tailwind to 2025 revenue, with a 10 basis point positive impact on operating income. Notwithstanding our updated outlook for 2025, there are still many moving pieces which we continue to monitor closely. Finally, we had previously mentioned having an Investor Day this November. However, after careful consideration of the continued market volatility and the global geopolitical status, we've decided to move our Investor Day to the spring of 2026.

Factoring in the reduced. Tariff headwind, the updated, full year non-gaap. Gross margin is projected to be between 53.5% and 54.5% versus 53% and 54.5% previously.

For your non-gaap operating margin is now. Projected to be between 12 and 13% versus 10 and 12%. Previously reflecting our updated, gross margin Outlook along with proactive cost actions. We take in in managing the business. We continue to anticipate incurring in IP R&D expense in the third quarter as previously disclosed

Due to a further weakening of the US dollar, we now, expect currency exchange to be approximately a hundred basis points, Tailwind to 2025 Revenue, with a 10 basis, point positive impact on operating income.

Rup Lakaraju: We will provide more detail on a specific date in early 2026. I'll now turn the call over to Norman for his remarks.

Norman Schwartz: Thanks, Rup. You know, I think, as we all know, the second quarter remained tumultuous, but it does seem we're all getting used to it for what it's worth. You know, I think, you know, in any case, it's good to see our customers adapting to the current situation and figuring out how to navigate. And, you know, it's nice to see some positive signals relating to NIH funding for 2026. You know, we discussed tariffs. Obviously, it's still evolving. The US government policies are a work in process. But I think, to the credit and determination of BIORAD employees around the world, you know, as a company, we remain resilient and continue to advance our business on many fronts. Probably good to take a moment here to welcome the Stillate employees to BIORAD.

After careful consideration of a continued Market volatility and the global geopolitical status. We've decided to move our investor day to the spring of 2026. We will provide more detail on a specific date in early 2026. I'll now turn the call over to Norman for his remarks.

Thanks Ruth. Uh, you know, I think as we all know

uh, the second quarter remained tumultuous uh,

But it does seem we're all getting used to it uh for what it's worth.

Uh, you know.

I think uh, you know, in any case, it's good to see our customers adapting to the current situation and figuring out how to navigate. Uh and you know, it's nice to see some positive signals relating to to NIH funding for for 2026.

um,

You know, we discussed tariffs, obviously, it's still evolving. Uh,

The US government policies are are a work in process, uh but I think to the credit and determination of buyer and employees around the world. Uh you know, as a company we remain resilient and and continue to advance our business on on many fronts.

Norman Schwartz: I've had the chance to interact with some of them in the last few weeks, and I think they are a great addition to BIORAD. As Jon mentioned, Mike Crowley, who's been leading our global commercial operations, is retiring after a long and distinguished career at BIORAD. Mike has been an important part of BIORAD's success over the years. Just a call out, thank you, Mike, for all your contributions. So I think that concludes our prepared remarks. Gayle, I think we'll now open it up to take questions.

Uh probably probably good to take a moment here. To welcome the uh Stella employees to buy a red. Uh, I've had the uh the chance to interact with some of them in the last few weeks. And uh and I think they are a great addition to buyer add

Uh, as John mentioned, uh, Mike Crowley, who's been leading, our global commercial operations is retiring.

After a long and distinguished career at at buyer, add Mike has been an important part of, by its success over the years. Uh, just, uh, call out. Thank you, Mike for all your contributions.

So, I think that concludes uh, our prepared remarks uh, Gail. I think we'll now open it up to take questions.

Gill: This time, I would like to remind everyone that in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Okay, so your first question comes from the line of Patrick Donnelly with CT. Your line is open.

This time I would like to remind everyone that in order to ask a question, press 4, then the number 1 on your telephone key.

To a pause for just a moment to compare the Q&A roster.

Okay, so your first question comes from the line of Patrick Donnelly with CT. Your line is open.

Speaker 6: Hey, guys. Thank you for taking the questions. Maybe first, hey, Rup, how are you? Maybe first, just on the process chrome side, you know, nice to see those results this quarter. I think you hinted at maybe a little bit of pull forward. Can you just talk about, I guess, what you saw in the quarter, what sense you have for how much of that was pulled forward, what's sustainable? Just want to talk through, you know, given what's going on with tariffs and everything, it felt like maybe there was a little bit of an impact there. So it'd be helpful if you could just talk through that and the expectations for the remainder of the year on that piece.

Rup Lakaraju: Yeah, of course. So first of all, I'll start out with maybe for the full year, we actually raised kind of that previous guide on process chrome from high single digits to low double digits. So I think that maybe answers your question on sustainability. We think it is sustainable. Yes, we've had both in Q1 and Q2 a little bit of movement between quarters because these are customer conversations where they want to pull it forward for their own purposes. Can't necessarily say it's because of tariff-related. That's not necessarily the driver, but just in terms of their production timeframes and these sort of things. So we were more than happy to help support it. And as I said earlier, I think we see that as continuing to sustain through the rest of the year and expect it to be still good for us.

Hey guys, thank you for taking the questions. Um, maybe first, hey route, how are you? Um, maybe first, just on, on the process, Chrome side, you know, nice to see those results, this quarter. I think you hinted at at maybe a little bit of of pull forward. Can you just talk about? I guess, what you saw in the quarter, what sense you have for, for how much of that was pulled forward? What sustainable, just want to talk through, uh, you know, given given what's going on with tariffs and everything. It felt like maybe there was a little bit of an impact there, so it would be helpful if you could just talk through that and the expectations for the remainder of the year on on that piece. Yeah, of course. So first of all, I'll start out with maybe for the full year. We actually raised kind of the previous guide on process Chrome from high single digits to low double digits. So I think that maybe answers your question on sustainability. Uh, we think it is sustainable. Yes, we've had both in q1 and Q2 a little bit of movement between quarters, because these are customer customer conversations where they want to pull it forward for their own purposes. Can't necessarily say it's because

Of tariff related. We that's not necessarily the driver, but just in terms of their production time frames and and these sort of things that we were more than happy to help support it. And as I said earlier, I think we, we see that as continuing to sustain through the rest of the year, uh, and expect it to be, still good for us.

Speaker 6: Okay, understood. And then in the guidance, I just wanted to clean up. I know Stillate is now in the guidance. Can you just peel back what contribution that is to the organic number move? I just want to make sure I understand where the raise came from, what's organic, what's Stillate. If you could just help us out there, it would be appreciated.

Rup Lakaraju: Yeah, so we got a few different reasons. So Stillate is now in the guide, as we had indicated we would once we closed the transaction, which we did as of June 30th. So that's in there. So when we take the guide up, included in there is the DDPCR growth rate moving up to that mid-single digits that we talked about. That movement is solely Stillate-specific because Continuum we already had in our original guide coming into the year because we expected it to be released in 2025, although we didn't specifically give dates, as you know. So that piece is in there, and that contributes to that DDPCR growth rate increase, which obviously then takes our range up overall to that 0 to 1% versus the previous wider range that we had, including down to the minus 3%.

Okay understood. Um and then in the guidance, I just wanted to clean up. I know. Stila is now in the guidance, can you just peel back? What contribution that is to the organic number move? I just want to make sure I understand where the Rays came from. What's organic. What's still a if you could just help us out, there would be appreciate it. Yeah. So so we got a few different reasons. So still is now in the guy.

Rup Lakaraju: And so maybe just to summarize, right, so there's process chrome, which we just talked about in terms of increased growth opportunity, the DDPCR, including Stillate, and then the third piece is consumables, which have continued to be more durable, which we commented on during the script.

Uh, overall, to that 0 to 1% versus the previous, uh, wider range that we had, uh, including the down to the minus 3%.

And so, maybe just a just to summarize, right? So there's process Chrome which we just talked about in terms of increased uh, growth opportunity, uh, the ddpcr including Stella. And then the third piece is consumables which have continued to be more durable, which we commented on uh, during the script.

Speaker 6: Yep, no, that's helpful. And then maybe last one, just on the margins, you know, obviously a lot of moving pieces there with some of the tariff moves. Can you just talk about, again, the delta, the bridge from the old guide to the new, what are the moving pieces, what's tariffs, what's not, would be helpful. Thanks, Rup.

Rup Lakaraju: Yeah, of course. So the biggest piece, tariffs have come down significantly. So that's a big piece, right? If you remember in the prior calls, we'd indicated we could see up to 130 points of headwind on tariffs at the bottom line. We now think that that's 30 to 40 bips of headwind on the op margin related to tariffs. So significant change there. So if you think about the op margin change from 10 to 12% previously to now the 12 to 13%, you can see about 100 bips of that is related to tariffs. The rest of it is related to, one, expecting to see, because of Stillate and other things, some better absorption from the manufacturing standpoint. And then, of course, that mix continuing to be stable for us and positive, if you will, because of the consumable pull through. So those are the different pieces there.

Yep. It's helpful. Um and then maybe last 1 just on the margins, you know, obviously a lot a lot of moving pieces there with, you know, some of the Tariff moves. Can you just talk about again the Delta you know the bridge from the old guy to the new 1 of the moving pieces? What's tariffs? What's not would be helpful. Thanks. Yeah, of course. So so the biggest piece uh tariffs have come down significantly. So that that's a big piece, right? If you remember in the in the prior calls we didn't get it. We could see up to 130 points of Edwin on, on tariffs at the bottom line. We now think that that's 30 to 40 bibs of uh, headwind on the up Margin, uh, related to tariffs, so significant change there. So, if you think about the op margin, change from 10 to 12 percent, previously, to now, the 12 to 13%, you can see about 100 bits of that is related to tariffs. The rest of it is related to 1 uh, expecting to see because of Stila and and and other things, uh, so better absorption uh, from the manufacturer

From a factoring standpoint, and then, of course, the mix continuing to be, um, uh, stable for us and, uh, positive, if you will, because of the consumable pull-through. So those are the different pieces there.

Speaker 6: Thanks, guys.

Thanks guys.

Rup Lakaraju: Thanks, Patrick.

Thanks Patrick.

Gill: Your next question comes from the line of Dan Leonard with UBS. Your line is open.

Norman Schwartz: Thank you very much. My first question is on the diagnostics market in China. I could use a bit of help understanding how all the headlines relate or don't relate to BIORAD over there and why.

Your next question comes from the line of Dan Leonard, the UVS your line is open.

Thank you very much.

Rup Lakaraju: Yeah, maybe I can start, Jon. At least jump in, Norman, jump in. So I guess there's three pieces if you think about right now. I mean, China still overall is soft. So I'll start with that. So maybe that's the other four pieces. So that's number one. China's continuing to be soft. With that said, I think in terms of some of the elements that, you know, Jon mentioned, I think in his part of the script, you know, VBP, we've not seen any impacts of VBP, and we continue to not see impact from VBP. So that's not something we've seen. You mentioned DRG. That's something we actually saw earlier in the year. And Dan, if you remember, we actually indicated that we took our numbers down after the during the Q1 call for the rest of the year because of some softness in diagnostics.

My first question is on the Diagnostics Market in China. I could use a bit of help understanding how all the headlines, relate to or don't relate to biorad over there and why

Yeah. Um, maybe I can start John. Please step in Norman jump in. Um,

So there, I guess there's 3 pieces. If, if you think about right now, I mean China's still overall is, is soft. Uh, so I'll start with that, so maybe that's whether 4 pieces. So that's number. 1 China's continuing to be soft with that said. I think in terms of some of the elements that, you know, John mentioned, I think in his part of the script, you know vbp, we've not seen any impacts of vbp and and we continue to not see impact from vbp so that's not something we've seen. Um you mentioned drg that's something we actually saw earlier in the year and Dan, if you remember we actually indicated that we took our our numbers down after the during the q1 call uh, for the rest.

Rup Lakaraju: Part of that was some of this China DRG piece that was in there. So we'd already contemplated that. And, you know, we haven't seen any significant change or change from what we've commented on back then. The final piece is around the reimbursement rate changes. I mean, it's something our teams continue to monitor, as Jon said. But we haven't seen any news that we've got further reimbursement rate changes that could negatively impact us.

Jon DiVincenzo: Yeah, exactly, Rup. And I think, hey, Dan, this is Jon DiVincenzo. Essentially, it reflects our mix versus maybe some other suppliers. We are a specialty diagnostic supplier. A large part of our portfolio are quality controls, which are not necessarily affected by reimbursement. And then the other areas that we, you know, we called out, yes, we were affected by the diabetes reimbursement, but other areas, especially the areas are not really targeted at this time by those policies. So I just think it's where they've looked at the bigger spend, the larger maybe areas there. It has not affected us, and we don't think that it's part of their view moving forward.

A year because of some softness and Diagnostics part of that was some of this China drg piece that was in there. Uh, so we'd already contemplated that and, you know, we haven't seen any significant change or change, uh, from what we've commented on back, then the final piece is around the reimbursement rate changes. I mean, it's something our teams continue to monitor as John said. Uh, we haven't seen any news that. Uh, we've got further reimbursement rate changes that could negatively impact us. Yeah, exactly Reuben. I think, um,

Hey Dan. This is Johnny Venzo. Um,

Norman Schwartz: And Jon, on the panel testing pressures over there, I know you supply panel tests through the BioPlex 2200, but from a mix perspective, is that just not a big part of your mix in China?

Essentially, it reflects our mix versus, maybe some other suppliers, we are a specialty diagnostic supplier. A large part of our portfolio. Our holy controls, which are not necessarily affected by reimbursement. Um, and then the other areas that we, you know, we called out. Yes, we were, we were, uh, affected by the diabetes reimbursement, but other areas, especially the areas and not really targeted at this time by those policies. So, I just think it's where they've looked at the bigger spend larger, um, maybe, um, areas there, and it has not affected us. And we don't think that it's part of their, um, view, moving forward.

Jon DiVincenzo: Right, exactly. I think that's the explanation, yeah.

Norman Schwartz: And then for my follow-up question on the tariff environment, I appreciate that there is lesser operating margin headwind due to the rollbacks. I'm wondering if I'm wondering more, how are you managing your business given all the uncertainty? Are there actual countermeasures you've put in place for a more severe tariff environment that you've had to roll back, or are there things that are in flight which remain in flight? If you could just talk through that process a little bit for me, that would help. Thank you.

In in John on the panel testing, um, pressures over there, I know you supply panel tests through the bioplex 2200, but from a mixed perspective is that just not a big part of your mix in China, right? Exactly. I think that's the okay. Yeah explanation. Yeah.

And then for my follow-up question on the tariff environment, I appreciate that there is lesser operating margin headwind due to the rollbacks. I'm wondering if I'm wondering more, um,

Jon DiVincenzo: Yeah, so we have taken a number of actions. Obviously, we've taken a fine, fine look at all of our different suppliers across various geographies. We have already started to move some of the way we move materials around the world where we make product. We have plans in place to even be more flexible in the future and adapt to, you know, what's the best source of those products. So we've worked with suppliers. We've worked with our own teams. We built, you know, we replicated in some areas some manufacturing capabilities if it becomes necessary. We didn't want to overdo it because of all the volatility still out there. But as things settle down now, we think we're in pretty good shape where we know where the challenges are. We have some flexibility from our suppliers, and we have flexibility in our own plants to move manufacturing around.

Yeah, uh, so we have taken a number of actions. Obviously, we’ve uh...

Jon DiVincenzo: So we feel like, you know, as much as we could be, we have some adaptability there and some resilience.

Norman Schwartz: Thank you very much.

Taken a fine, fine. Uh, look at all of our different, um, Supply, uh, suppliers across various geographies, we have already started to move some of the way we move materials around the world where we make, uh, product, uh, we, we have plans in place to even be more flexible in the future and adapt to, you know, what's, um, the best, uh, source of those those products. So we've worked with suppliers, we've worked with our own teams, we built, um, you know, replicated in some areas, some manufacturing capabilities, if it's becomes necessary, we didn't want to overdo it because of all the volatility still out there. But as things settled down now, we think we're in pretty good shape where we know where the challenges are, we have some flexibility from our suppliers and we have flexibility in our own plants to uh, move manufacturing around. So we're we feel like, you know, as much as we could be, we we have some uh, adaptability there and some resilience.

Jon DiVincenzo: Thanks, Dan.

Thank you very much.

Thanks Sam.

Gill: Your next question comes from the line of Brandon Couillard with the Wells Fargo. Your line is open.

Speaker 6: Hi, good afternoon. Rup, as we look at the second half, how should we think about revenue margin phasing between third and fourth quarter? And did the second half organic guide actually come down if we exclude the Stillate contribution?

Your next question comes from the line of Brandon cuyo with the Wells Fargo. Your line is open.

Hi. Good afternoon. Ruth, as we look at the second half, how should we think about revenue margin phasing between the third and fourth quarters? And did the second half organic guide actually come down if we exclude the Stila contribution?

Rup Lakaraju: No, it did not organically. I mean, we've got some headwind in the diagnostic side, but life sciences continue to, inclusive of Stillate, is helping support kind of that overall increase, if you will. In terms of the profiling, you know, I think Q3 is going to look similar to Q2 from a top-line perspective. And then, of course, we've got the fourth quarter with a seasonal increase that we expect to see overall. So we may see a little bit of strength in Q3 over Q2, but not much. But then we've got Q4 stepping up, you know, kind of reasonably, although probably not as much as what we saw before. I think some of that's moved around a little bit into whether it's Q3 into Q2, et cetera, from an overall profiling standpoint.

Right. But life sciences, uh, continue to include clubs still at any of his, uh, helping support, kind of that overall, increase if you will, uh, in terms of the profiling, uh,

Rup Lakaraju: From a margin standpoint, what you're going to end up seeing is Q3 margins being somewhere in the similar range of Q2 and then in Q4 because we do have part of it's the mix with higher quality systems and some of the DDPCR flow-through Q4 margins and then the improved absorption to be better than Q3 and Q2 from an overall standpoint to land within kind of that midpoint of the range of what we provided, the 53.5% to 54.5%.

You know, I think Q3 is going to look similar to, uh, Q2 from a Topline perspective, uh, and then, of course, we've got, uh, the uh, fourth quarter with, uh, seasonal increase that we expect to see, uh, overall. So we may see a little bit of strength in Q3 over Q2, uh, but not much, but then we've got Q4, uh, stepping up. Um, you know, kind of reasonably. Uh, although probably not as much as what we saw before. Uh, I think some of that moved around a little bit into whether its Q3 and Q2 Etc, uh from an overall profiling standpoint from a margin standpoint, what you're going to end up seeing is uh Q3 margins uh being somewhere in the similar range of Q2 and then

Jon DiVincenzo: And we spent quite a bit of time with our commercial teams and customers to look at that ramp that we have in the fourth quarter. Fourth quarter is a significant increase over the previous few quarters there. But it's a little bit of timing, and it's kind of year over year we see a number of areas of our business have larger orders. And we have both high confidence in the orders coming through as well as all of our supply teams to be able to deliver that product during the quarter. So pretty good confidence level in the fourth quarter number as well, even though it's up.

In Q4 because we do have part of its the mix with higher quality systems, um, and and some of the ddpcr, uh, follow flow through, uh, Q4 margins and then the improved absorption, um, to be better than Q3 and Q2, uh, from an overall standpoint to, to land within kind of that midpoint of, of the range of what we provided the 53 and a half percent to 54 and a half percent.

Speaker 6: Okay, thanks. That's helpful. Then on DDPCR, did you comment on how instruments performed in the quarter? And then secondly, it's nice to see Continuum finally coming to market. I think you mentioned that it was already baked into the guidance. But do you think there's any pent-up demand in the market for that system? And how are you kind of positioning it relative to the Stillate platform?

And we spent quite a bit of time with our commercial teams and customers, uh, to look at that brand that we have in the fourth quarter, fourth quarter is, um, you know, uh, significant increase over the previous few quarters there. Um, but that's a little bit of timing and it's kind of a year over year. We see a number of, of areas of our business, uh, have larger orders and and uh uh, we have both um, high confidence in the orders, coming through, as well as all of us. Our supply teams to be able to deliver that product during the quarter. So pretty good confidence level in the fourth quarter number as well. Even though

Jon DiVincenzo: Yeah, so I, you know, recognize the team did a great job not only kind of getting to the finish line and closing the acquisition, but, you know, keeping that focus on Continuum and having very, very robust quality data to be able to launch that into the marketplace. There's a lot of excitement about it. I mean, the Continuum platform was designed to replace QPCR. It's a 96-well plate standard format. And there's a lot of excitement about that, you know, bringing more precision and sensitivity to those applications. So a lot of excitement there. So we're kind of on track to what we had kind of forecasted going into the year. On the QX700 series, you know, the teams already rebranded them, positioned them. We're moving, you know, we have hundreds of thousands of assays that have been developed over the last decade or so.

Okay, thanks, that's helpful. Um, then I'm digging PCR. Did you comment on how instruments performed in the quarter? And then, secondly, it's nice to see Continuum, uh, finally coming to market. I think you mentioned that it was already baked into the guidance. But do you think there's any pent-up demand in the market for, uh, that system and how you kind of positioning it relative to the Stella platforms? Thanks.

Yeah. So um

Jon DiVincenzo: We're moving those on to Continuum and to the QX700. So there's, you know, we, a week after we closed the deal, we had our sales team in Pleasantine, California, being trained on them. And we continue that training globally, both in sales and service. So we're doing everything possible to drive, share, and expand overall the market for digital PCR. So a lot of excitement for both those products coming to the market on our assay content.

We're moving. Uh, you know, we have hundreds of thousands of assets that have been developed over the last decade or so we're moving those on to Continuum and to the QX 700. Um, so there's you know, we a week after we closed the deal, we had our sales team in Pleasanton California being trained on them. And uh, we continue that training globally, both in sales and service. So we're doing everything possible to drive. Share, uh, and expand overall, the market for digital PCR. So, um, a lot of excitement, uh, for both, those products coming to the market,

On our, our work as a content.

Speaker 6: I think any comment on just how instruments, DDPCR instruments, performed in 2Q? Thanks.

Rup Lakaraju: Yeah, they were, I mean, on a sequential basis, they were slightly better. But on a year-over-year basis, it was relatively weak overall. Still very soft, particularly in the academic market where people are not sure of their budgets overall. So we see softness across the board instruments, not just digital PCR, but all the other instruments as well.

I think any caller on just how instruments the gdps are. Instruments performed in 2 Cube, thanks.

Speaker 6: Yeah. Great, thanks.

Yeah, they they were I mean a sequential basis. Uh they were slightly better. Uh but on a year-over-year basis, it it was relatively weak. Oh, overall still very soft particularly in the academic Market where people are not sure of their budgets overall. So we see softness across the board. Uh instruments not just digital PCR, but all the other instruments as well. Yeah.

Jon DiVincenzo: And, you know, just a little bit of color to that. We have not factored in any kind of end-of-year budget flush. But potentially, that's some upside for us as we speak to customers on a kind of daily basis here. And potentially, there'll be a little more confidence in their budget, and there could be a little bit of upside, but we have not factored it into our forecast.

Great, thanks.

And, you know, just a little bit of color that we, we have not factored in any kind of end of year budget flush. Um, but

Potentially there's some upside for us as we we uh speak to customers on a kind of daily basis here and potentially they'll be a little more confidence in their budget and there could be a little bit upside but we have not factored into our forecast.

Gill: Your next question comes from the line of Jack Meehan with Nefron Research. Your line is open.

Norman Schwartz: Good afternoon. Hi, everyone.

Our next question comes from the line of Jack mihan with nestron. Research. Your line is open.

Rup Lakaraju: Jack.

Norman Schwartz: First question, wanted to ask about the process chrome strength in the quarter. How much of this is just small numbers and easy comps versus can you talk about what you're seeing in terms of order patterns with your customers and any recovery there?

Good afternoon. Hi everyone.

Jon DiVincenzo: Yeah, yeah. So I think we're getting back to a normal state where it's not a matter of, you know, customers being overstocked anymore. There might be some of that in some places, but I think it's more, it's more of a appropriate relationship between how they need product, when they need product, and when they're ordering from us. So you're right, it's an easier comp. Last year was a soft year as we allowed our customers to adjust to kind of their inventory levels they wanted. And now we think it's more of a direct correlation between their demand and what they're ordering from us. And it's more similar to the volume that we saw, you know, in years past before kind of the volatility of supply chain challenges and overall their own managing their inventory.

First question, I wanted to ask about the process Chrome strength in the quarter. How much of this is just small numbers and the comps? Can you talk about what you're seeing in terms of order patterns with your customers and any recovery there? Yeah. So, um,

uh,

I think back to a normal state where it's not a matter of...

uh, you know, uh,

customers being overstocked anymore. That might be some of that in some places, but I think it's more is more of a appropriate relationship between how they need product when they need product, when they're ordering from us. So, uh, you're right. It's a, it's an easier comp last year was a soft year as we, um,

Norman Schwartz: Okay. And then sticking with life sciences, you called out food safety as a growth driver. It's been a while since we talked about that product family. Anything to note there?

A lot of our customers to adjust to kind of their inventory levels. They wanted and now we think it's more of a direct correlation between their demand and what they're ordering from us and it's more similar to the volume that we saw. You know, in years past before, kind of the uh, volatility of of supply chain challenges, and and overall their own managing their inventory.

Jon DiVincenzo: You know, our food safety business is an interesting one because we're essentially taking our products that are used in life science research and either developing specific contents for the food applications. And that area continues to grow high single digit. We have a very strong team focused on that. It's not a huge business for us, but it is an interesting kind of additional market, applied market that does not have some of the challenges that we see today in life sciences or in biotech. So it's, you know, it's an area that we're looking to see what more could we do there in the next few years.

Okay, and then sticking with life sciences you call that food safety as a growth driver, it's been a while since we talked about that product family, anything to note there.

you know, our

Norman Schwartz: Okay. And last one, wanted to circle back on the US federally funded research customers. Just as you look at them as a customer class, talk about how the demand played out throughout the quarter on consumables and instruments. Was it stable? Did it strengthen or weaken at all? How are you feeling about that?

Stacy business is interesting 1 because we're essentially taking our products that are used in life science, research, and and other developing specific content for the food applications. Um, and and that area has continues to grow High single digit. We have a very strong team focused on that. Uh, it's not a huge business for us. Um, but it is, uh, an interesting kind of additional Market. Applied Market that, uh, do not have some of the challenges that we see today in life sciences are in biotech. So it's, you know, it's an area that we're looking to see what more could we do there. Uh, the next few years,

Rup Lakaraju: Yeah, Jack, it was stable throughout the quarter and improved from where it was in Q1, where I think there was a bit more paralysis, if you will. And that's part of what we're anticipating for the rest of the year to see that continuity from Q2 through the rest of the year.

Okay, and last one, um, to circle back on the U.S. federally funded research customers. Just as you look at them as a customer class, can you talk about how the demand played out throughout the quarter on consumables and instruments? Was it stable? Did it strengthen or weaken at all? How are you feeling about that?

Yeah, Jack. It was, uh,

Stable throughout the quarter and improved from where it was in q1 where I think there was a bit more paralysis if you will. Um, and and that's part of what we're anticipating for the rest of the year to see that continuity from Q2 through the rest of the year.

Norman Schwartz: Okay. Thank you, guys.

Rup Lakaraju: Thanks, Jack.

Okay, thank you guys. Thanks Jack.

Gill: Your next question comes from the line of Tycho Peterson with Jeffries. Your line is open.

Your next question comes from the line of Tyco Peterson with Jeffrey. Your line is open.

Speaker 6: And thanks to Madan for Tycho. Rup, to go back to process chrome, just, and I appreciate the disclosures in the deck you guys did this quarter, but it seems to suggest that on a dollar basis, process chrome was up like $15, $16 million year over year. Are you saying 20% of that is tied to pull forward? So maybe a few million was pulled forward. And then any more color you can provide on just the strong double-digit growth, just given the revenue base of that business, you know, and those disclosures, I mean, that would suggest that the strong double digits was something like 50% plus in the quarter. So any more clarity you can just add in terms of the magnitude of the process chrome growth and the comp you had in Q2? Thank you.

Rup Lakaraju: We like you, Matt. Yeah, I know. Matt, you got a lot of, I appreciate all the numbers there. Listen, I think you're a little high on some of those numbers. So when we think about process chrome and where it landed for the quarter, you know, obviously, we've got an easy comp from a 24 standpoint. And as we talked about, we've got, I think, as Jon said, a more, you know, normalized environment. So that's been a good, on a sequential basis, we saw strength on process chrome as a result and obviously a very strong compare on a year-over-year basis. It's not quite 50% on a year-over-year. It's kind of, you know, maybe closer to half that or slightly above half of that sort of number. How you ought to think about it.

Of the process Chrome growth and the and the comp you had um, into gear. Thank you. We like your map. I know Matt, you got you got a lot of uh I appreciate all the numbers there. Uh listen. I think you're you're uh, a little high on some of those numbers. Uh, so, so when we think about, uh, process Chrome and and where it landed for the quarter, um, you know, obviously we've got an easy comp from from a 24 stand point. And then, as we've talked about, we've got, I think, uh, as John said, a more, you know, normalized environment. So, so that's, that's been a good honest, sequential basis. We saw strength on process Chrome, uh, as a result and, and, and obviously, a very strong compared on a year-over-year basis. Um, it's not quite 50% on a year-over-year. Um, it's kind of, you know, maybe closer to half that or slightly above half of that sort of number how you ought to think about it.

Speaker 6: Okay, thanks. That's helpful. And then just to go back to the new digital PCR launch, it sounds like you had the whole team out there right after it closed. Can you just talk about what you're doing on the commercial side to stimulate demand? Are you running any promotions for existing DDPCR customers? I understand it's a different part of the market. Or are you running any kind of targeted programs for high-end QPCR customers? Just talk about how you're kind of positioning the 700 series in the continuum going forward. Thanks.

Jon DiVincenzo: Yeah, and we will share more details at a webinar coming up here. But it's exactly the point is that this is not to replace our existing or solid base. It's really to expand the number of users for digital PCR. It is a very simple workflow at the right kind of price points to take share from QPCR. And also, as you said, on the high end, you know, with the QX700HT and our existing QX600 products, we continue to have the high sensitivity products in the market. And we see a number of applications where, you know, rather than next-gen sequencing, they can apply digital PCR for kind of faster and less expensive solutions for them. So it's expansion of the marketplace primarily.

Okay, thanks, that's that's helpful. Um, and then just to go back to the the new digital PCR launch. It sounds like you have the whole team out there, right after it closed. Can you just talk about what you're doing? On the commercial side to, um, stimulate demand? Are you running any promotions for existing ddpcr customers? I understand it's a different part of the market. Where are you running any kind of targeted programs for cyan qpcr? Customers. Just talk about how you're kind of positioning the 700 series in the Continuum. Um, going forward. Thanks. Yeah. And we will uh, share more

Jon DiVincenzo: Of course, there's some areas where it'll hit kind of the center of the existing DDPCR market, but in general, it's to expand the number of users of droplet digital PCR.

More details uh, at a webinar coming up here. But um, it's exactly. The, the point is that this is not to replace our exist to exist our solid base. It's really to expand the number of users for digital PCR. Um, it is a, um, you know, very simple workflow at the right kind of price point to, uh, take share from qpcr. Uh, it also, as you said in the high end, you know, with the QX 700 HT and our existing QX, 600 products, we continue to have the high sensitivity products in the market. Um, and we, we see a number of applications where, you know, rather than Next Generation sequencing, they can apply digital PCR for, you know, faster, um, and less expensive, uh, solutions for them. So, it's expansion of the marketplace primarily. Of course, there's some areas where it'll hit kind of the center of the existing, uh, ddpcr Market. But in general, it's to, uh, expand the number of users of of, uh, droplet digital PCR.

Speaker 6: Thanks. And maybe if I could sneak one more in. OUS, academic government, would just be curious kind of what demand trends look like both in Asia and Europe in 2Q and kind of how you're thinking about the funding and demand backdrop XUS for ANG for the rest of the year. Thank you.

Jon DiVincenzo: Yeah, so maybe Rup will give more details on it. But, you know, when we say academic, we're specifically talking about global academic, you know, where some countries in Europe have shifted budgets to defense or other areas. You know, it's a zero-sum game in some areas. So they're slowing down some investments in academic. So it's not just a US phenomenon. It's a global phenomenon. I can't say I know exactly in China if it's really seen that way or not, but certainly US and Europe are similar in pressures on academic funding.

Thank you. Maybe if I can just sneak 1 more in. Um uh oh us academic government would just be curious. Kind of what demand Trends look like both in Asia and Europe in 2 q and kind of how you're thinking about the funding and demand backdrop xus for uh Ang for the rest of the year. Thank you. Yeah, so maybe rupo um, give more details on it. But you know when we say academic we're not, we're specifically talking about global academic, you know, where some countries in Europe, um, have shifted budgets to defense or or other areas. Um, you know, it's a

Rup Lakaraju: No, I think you're spot on, Jon. And just from an APAC standpoint, China is continuing to be soft. We're seeing some movement, positive movement in Korea and Japan, which is great to see because they've been kind of jammed up for a bit of time now. But China is kind of in that softness category, if you will.

Zero Sum game, and some areas of their, uh, slowing down some investments in academic. So it's not just the US phenomena. It's, it's a global phenomena. I can't say, I know exactly in China, if it's really seen that way or not, but, um, certainly us and Europe are similar in pressures on on academic funding. I think you spot on John and, and just from a APAC standpoint. Um, China is is continuing to be soft. We're seeing some movement positive movement in in Korea and Japan, uh, which is great to see, because they, they've been kind of jammed up for a bit of time now. Uh, but China is kind of in that softness category, if you will

Speaker 6: Super. Thank you.

Rup Lakaraju: Yep.

Thank you. Yep.

Gill: Thank you, everyone. Okay, sorry.

But in both. Thank you, everyone.

Jon DiVincenzo: I'm sorry. From an academic standpoint, just to reiterate what we said earlier, you know, our customers are focused on keeping their people and keeping the research going. So I actually commend them for their ingenuity in making that happen. But it shows in our results for our assays and reagents that are continuing to be used. We can see the research is continuing. Even in uncertainty, you know, they're moving science forward. And I think it's commendable that with all the disruptions and unknowns that they continue to do that, we see that in our numbers.

I'm sorry, just from an academic standpoint just to reiterate what we said or even, you know, our, our customers are focused on keeping their people and keeping the research going. Um, so I actually commend them for their Ingenuity and making that happen. Um, but it shows in our results for our, uh, assays and reagents that are continued to be used. We can see the researchers continuing, um, even under uncertainty, you know, they're they're moving science forward. And uh, I think it's commendable that with all the disruptions and unknowns that they continue to do that. We see that in our numbers.

Gill: Okay, so your next question, Thomas Miller-Learness, Connor McNarrow with RBC. Your line is open.

Okay, so your next question comes from the Lioness Connor. Morrow, with RBC your line is open,

Speaker 6: Hi, this is David Carter for Connor. I just wanted to call to ask about, can you confirm if the organic number for Q3, which goes from like a negative three that goes to about positive 5% in the fourth quarter?

Hi. This is a Ricardo for Connor. I just wanted to call to ask about. Can you confirm if the organic, uh, number for Q3 which goes from like a negative 3 that goes to about positive 5% and the fourth quarter?

Rup Lakaraju: That sounds about right because you're looking at it from a total company standpoint. Is that right?

Speaker 6: Yeah, that's correct.

Uh that sounds about right because you're, you're looking at it. I was from a total company standpoint. Is that right?

Rup Lakaraju: Yep. Yeah. So that's right in terms of how that progresses through the year, roughly.

Jon DiVincenzo: And again, part of that is in the fourth quarter last year is when we first saw the reimbursement changes in China. So that's annualized at that point in time. So, you know, that's kind of a, it's not necessarily because all of a sudden there's a better market dynamic. It's more of the comp to it.

Yeah, that's correct. Yep. Yeah. So so um, that's right in terms of how that progresses through the year roughly

And again part of that is in the fourth quarter last year, was when we first saw the reimbursement changes in China. So that's annualized at that point in time. So you know that kind of a it's not necessarily because all of a sudden, there's a better Market Dynamic, it's more of the comp to it.

Speaker 6: And just to follow up on the Continuum, how has the response been for the lower throughput customers? Because I know that was one aspect of the portfolio. There was a gap for that for the DDPCR. How is the uptake from that portion of customers?

Jon DiVincenzo: Yeah, I think it's too early to give you actual results, but actually the flexibility on the Continuum where you can have one sample or 96 samples is cost-effective, and it also meets those customers, you know, more episodic when they're actually using the platform. So that's one of the advantages that we're touting to the product, but probably a little too early to tell that there's direct customer user feedback yet. Give us a month or so.

Speaker 6: Okay, it's still early rounds. No problem. Thank you.

Rup Lakaraju: Thanks. Have a good one, Carter.

And just to follow up on the continued on, how is the response been for the lower throughput, uh, customers, good enough. That was 1. Aspect of the portfolio. There is a gap for that for the ddpcr. Uh, how is the uptake from that portion of customers? Yeah, I think it's too early to give you um, actual results. But actually the flexibility on the Continuum where you can have 1 sample or 96 samples. Uh, it's cost-effective and it also meets those customers that, you know, more episodic when they're actually using the platform. So that's 1 of the advantages that we're touting to the product but um, uh, probably a little too early to tell that there's Direct Direct Customer user feedback yet. Give us a month or so okay still early rounds, no problem, thank you.

Thank you. Jose Ricardo.

Gill: Thank you, everyone. And that concludes our Q&A session for today. I will now turn the call back over to Mr. Edward Chung for the closing remarks. Please go ahead.

Rup Lakaraju: Thank you for joining today's call. As previously discussed, we are planning to host a webinar on droplet digital PCR in our updated portfolio on August 26 at 1:00 p.m. Eastern Time, 10:00 a.m. Pacific. We will post registration information on the investor relations section of biorad.com shortly. As for upcoming investor conferences this fall, we'll be participating at the Wells Fargo Healthcare Conference in Boston and the Morgan Stanley Global Healthcare Conference in New York. Our CEO, Norman Schwartz, will also be participating on an industry panel at the Nefron Healthcare Summit in Napa. As always, we appreciate your interest, and we look forward to connecting soon.

Thank you, everyone and that concludes our Q&A session for today. I will now turn the call back over to Mr. Edward Chong for the consumer marks. Please go ahead.

Thank you for joining today's call as previously discussed. We are planning to host a webinar on droplet digital PCR and our updated portfolio on August 26th at 1 pm Eastern Time, 10 a.m. Pacific. Uh, we will post registration information on the investor relations section of biorad.com shortly. Uh, as for upcoming investor conferences, this fall will be participating at the Wells Fargo Healthcare conference in Boston and the Morgan Stanley Global Healthcare conference in New York. Um,

our CEO Norman Schwarz will also be participating on an industry panel at the nephron Healthcare Summit in Napa as always, we appreciate your interest and we look forward to connecting soon.

Gill: Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect. Have a nice day ahead, everyone.

Ladies and gentlemen, that concludes today's call. Thank you all for joining and you may now disconnect have a nice day ahead. Everyone.