QuidelOrtho FY Conference Summary Company Overview - **Company**: QuidelOrtho (NasdaqGS: QDEL) - **Industry**: Life Science Diagnostics and Medical Devices Key Points Performance and Financials - QuidelOrtho achieved approximately **1% organic growth** excluding COVID-related revenues, while the industry is experiencing mid-single digit growth [3][4] - The company reported a **19.5% adjusted EBITDA margin** last year, which is expected to increase to **22% this year** due to successful margin improvement initiatives [4] - Cost reductions of about **$140 million** have been realized since mid-2024, contributing to margin improvements [4] Revenue Headwinds - The shutdown of the U.S. donor screening business is expected to create a **2-3 point headwind** on total reported revenue for the year [6] - COVID-related revenues are declining, contributing an additional **2-3 point headwind** [7][10] - Excluding these impacts, the base business is growing at **4-5%**, driven by solid growth in Labs, Immunohematology, and Triage businesses [8][9] China Market Insights - China accounts for about **11% of total revenues**, with a year-to-date growth of **2.5%** expected to reach mid-single digits for the full year [12] - QuidelOrtho has largely avoided the impacts of VBP and DRG due to its use of dry slide technology and focus on routine chemistry [12][13] Pricing Dynamics - Pricing in the legacy Quidel business remains stable, while the legacy Ortho business experiences **1-1.5% pricing pressure** upon contract renewals [15][17] - Continuous improvement programs are in place to offset pricing erosion [17] Product Development and M&A - The decision to discontinue the Savanna product was driven by resource allocation towards the Rheonix product, which is expected to launch with FDA clearance by late 2025 or early 2026 [19][20] - The Rheonix product is anticipated to have competitive advantages in turnaround time and ease of use [21] Cross-Selling Opportunities - The integration of Quidel and Ortho has allowed for successful cross-selling, particularly with the Triage product, which has seen high single-digit growth due to the Ortho sales team [41][42] Future Outlook - For fiscal 2026, QuidelOrtho targets mid-single digit growth, with a **1-point headwind** from the donor screening business [43][45] - The Labs business is expected to maintain mid-single digit growth, while Immunohematology is projected to grow at **3-4%** [46][57] - The company aims for **100-200 basis points** of EBITDA margin improvement in 2026, driven by direct procurement initiatives [72][74] Cash Flow and Tariff Impact - The gross tariff impact for 2025 is estimated at **$20-25 million**, with potential reductions in 2026 depending on U.S.-U.K. tariff negotiations [65][66] - QuidelOrtho aims to achieve **50% free cash flow conversion** of adjusted EBITDA by the second half of 2027 [94][95] Conclusion - QuidelOrtho is navigating through various challenges, including revenue headwinds from donor screening and COVID declines, while focusing on margin improvements and product development. The company is optimistic about future growth and profitability, particularly with the anticipated launch of the Rheonix product and ongoing cost-saving initiatives.

Core Insights - QuidelOrtho Corporation, a leader in in vitro diagnostics, will participate in two upcoming investor conferences, enhancing its engagement with the investment community [1][5]. Company Overview - QuidelOrtho Corporation specializes in various diagnostic solutions, including clinical chemistry, immunoassay, immunohematology, and molecular testing, aimed at improving patient outcomes [3]. - The company is committed to advancing diagnostics to support a healthier future, reflecting its dedication to innovation and collaboration with healthcare providers [2][3]. Upcoming Events - Management will participate in the Evercore ISI 8th Annual Healthcare Conference on December 2, 2025, at 10:00 a.m. ET [5]. - Additionally, they will engage in the Citi Global Healthcare Conference on December 3, 2025, at 1:00 p.m. ET [5].

Core Insights - QuidelOrtho Corporation (QDEL) reported adjusted earnings per share (EPS) of 80 cents for Q3 2025, a decrease from 85 cents in the previous year, but exceeding the Zacks Consensus Estimate by 56.9% [1] - The company experienced a GAAP loss per share of $10.78, compared to a loss of 30 cents per share in the same quarter last year [1] Revenue Performance - QuidelOrtho's total revenues for Q3 2025 were $699.9 million, down 3.8% year-over-year on a reported basis and 4.6% at constant exchange rates (CER), but still above the Zacks Consensus Estimate by 5.3% [2] - Respiratory revenues fell to $112.3 million, a decline of 32.1% on a reported basis and 32.2% at CER, while Non-Respiratory revenues increased to $587.6 million, up 4.6% on a reported basis and 3.5% at CER [2] Business Unit Breakdown - QuidelOrtho's revenues are derived from five business units: Labs, Immunohematology, Donor Screening, Point of Care, and Molecular Diagnostics [3] - Labs revenues were $373.8 million, reflecting a 5% increase on a reported basis and 4.4% at CER [3] - Immunohematology revenues reached $142 million, up 7.7% on a reported basis and 5.2% at CER, while Donor Screening revenues dropped to $14.7 million, down 47.3% on a reported basis and at CER [4] - Point of Care revenues were $164.6 million, down 20% on a reported basis and 20.3% at CER, and Molecular Diagnostics revenues totaled $4.8 million, down 14.3% on a reported basis and 14.8% at CER [5][4] Geographical Revenue Distribution - North America revenues were $381.4 million, reflecting a decline of 12.6% on a reported basis and 12.5% at CER [6] - EMEA revenues increased to $91.8 million, up 9.3% on a reported basis and 2.4% at CER [6] - Revenues from China amounted to $84.6 million, reflecting a 5.2% increase on a reported basis and 4.8% at CER [7] - Other regions generated $142.1 million in revenues, up 12.3% on a reported basis and 12% at CER [9] Margin and Expense Analysis - Adjusted gross profit declined 4.6% year-over-year to $341 million, with an adjusted gross margin contracting 50 basis points to 48.7% [10] - Adjusted operating profit totaled $119.6 million, reflecting a 0.1% improvement from the prior-year quarter, with an adjusted operating margin expanding 70 basis points to 17.1% [11] Financial Position - QuidelOrtho ended Q3 2025 with cash and cash equivalents of $98.1 million, down from $151.7 million at the end of Q2 2025 [12] - Total debt at the end of Q3 2025 was $2.66 billion, compared to $2.61 billion at the end of Q2 2025 [12] - Cumulative net cash used in operating activities was $26.7 million, compared to net cash provided of $19.3 million a year ago [12] Guidance and Outlook - QuidelOrtho reiterated its financial outlook for 2025, projecting total revenues in the range of $2.68 billion to $2.74 billion, with the Zacks Consensus Estimate at $2.71 billion [13] - The company expects stable growth across most business lines, particularly in Labs and Immunohematology, with mid-single-digit growth anticipated in China [14] - For the full year, COVID-19 revenues are projected to be between $70 million and $100 million, with adjusted EPS expected to be between $2.00 and $2.15, compared to the Zacks Consensus Estimate of $2.28 [15] Overall Performance - QuidelOrtho's Q3 2025 results exceeded expectations, with both earnings and revenues beating the Zacks Consensus Estimate, driven by strong performance in Labs and Immunohematology [16] - However, the decline in respiratory revenues and decreases in Donor Screening, Point of Care, and Molecular Diagnostics units present challenges [17]

Core Insights - QuidelOrtho's shares fell 12.8% after disappointing Q3 financial results and a reduced full-year earnings forecast [1] - The company's Q3 revenue was $699.9 million, a 3.7% decrease year-over-year, despite adjusted earnings per share of $0.80 beating Wall Street expectations [1] - A significant GAAP net loss, including a non-cash goodwill impairment charge, raised investor concerns [1] - QuidelOrtho lowered its adjusted earnings per share guidance for the full year by 10.6% at the midpoint [1] Market Reaction - QuidelOrtho's shares have shown extreme volatility, with 35 moves greater than 5% in the past year, indicating significant market impact from recent news [3] - The previous notable stock movement occurred 17 days prior, when shares gained 5.5% following positive news regarding the company's commitment to transfusion medicine and FDA approval of a new product [4] Stock Performance - Since the beginning of the year, QuidelOrtho's stock has declined by 47.9%, currently trading at $23.47, which is 50.7% below its 52-week high of $47.61 [5] - An investment of $1,000 in QuidelOrtho shares five years ago would now be worth $82.80 [5]

Revenue Performance - Total revenues for the nine months ended September 28, 2025, decreased by 3% to $2,006.6 million compared to $2,075.1 million for the same period in the prior year [110]. - Revenue from respiratory products accounted for 14% of total revenues for the nine months ended September 28, 2025, down from 17% in the prior year [110]. - Labs revenue increased by 5% for the nine months ended September 28, 2025, primarily due to growth in reagents, consumables, and services [125]. - Donor Screening revenue decreased by 57% for the nine months ended September 28, 2025, primarily due to the wind-down of the U.S. donor screening business [125]. - Point of Care revenue decreased by 23% for the nine months ended September 28, 2025, driven by a decline in sales of QuickVue and Sofia SARS Antigen assays [125]. - Total revenues for North America were $1,098.8 million for the nine months ended September 28, 2025, down 10% from $1,220.2 million for the same period in 2024 [148]. - Total revenues for EMEA increased by 9% to $91.8 million for the three months ended September 28, 2025, compared to $84.0 million for the same period in 2024 [151]. - Total revenues for the nine months ended September 28, 2025, were $268.0 million, a 7.4% increase from $249.9 million for the same period in 2024, driven by growth in Immunohematology and Point of Care revenues [152]. - In China, total revenues for the three months ended September 28, 2025, were $84.6 million, a 5.2% increase from $80.4 million in the same period of 2024, driven by a 7% increase in Labs revenues [154]. - Total revenues for the nine months ended September 28, 2025, in China were $243.0 million, a 2% increase from $238.1 million in 2024, supported by a 6% increase in Labs revenues [156]. - Total revenues for Other segments for the three months ended September 28, 2025, were $142.1 million, a 12.3% increase from $126.5 million in the same period of 2024 [157]. Cost and Expenses - Cost of sales, excluding amortization of intangible assets, decreased to $364.3 million, or 52.1% of total revenues, for the three months ended September 28, 2025 [126]. - Cost of sales decreased to $1,052.8 million, or 52.5% of total revenues, for the nine months ended September 28, 2025, down from $1,114.7 million, or 53.7% of total revenues, for the same period in 2024 [127]. - Selling, marketing, and administrative expenses for the nine months ended September 28, 2025, decreased by $27.4 million, or 4.7%, to $551.9 million from $579.3 million for the same period in 2024 [130]. - Research and development expenses for the nine months ended September 28, 2025, decreased by $31.0 million, or 18.1%, to $140.4 million from $171.4 million for the same period in 2024 [132]. Impairment and Charges - Goodwill impairment charge recognized was $700.7 million for the three months ended September 28, 2025, compared to $1.7 billion for the nine months ended September 29, 2024 [135]. - In Q3 2025, the company recorded a non-cash goodwill impairment charge of $614.8 million for the EMEA unit, $68.1 million for China, and $17.8 million for Latin America, representing a full impairment of goodwill allocated to these units [182]. - The quantitative goodwill impairment assessment utilized a discounted cash flow method and market approach, incorporating significant assumptions such as future revenue growth rates and EBITDA margins [183]. - The projected future revenue growth rates and EBITDA margins are based on historical experience and internal annual operating plans, extrapolated over the forecast period [183]. - Discount rates for the impairment assessment were determined using a weighted average cost of capital adjusted for specific risk factors related to the reporting units [183]. - Market multiples were derived from comparable publicly traded companies using the guideline public company method [183]. - The company believes the assumptions used in the goodwill impairment assessment are reasonable and consistent with those used by other market participants [184]. Financial Position and Outlook - The Optimization Plan is expected to incur approximately $100 million in pre-tax charges through 2027, aiming for net cost savings of about $50 million [112]. - The planned wind-down of the U.S. donor screening portfolio is expected to be substantially complete by the first half of 2026 [111]. - The company expects overall demand for non-respiratory and respiratory products to continue to fluctuate due to various market factors [118]. - The company plans to continue evaluating strategic opportunities to expand product lines and improve operational efficiencies [119]. - Interest expense, net was $126.6 million for the nine months ended September 28, 2025, compared to $122.9 million for the same period in 2024, reflecting a 3% increase [139]. - Income tax benefit for the three months ended September 28, 2025, was $23.9 million, with an effective tax rate of 3.2%, compared to an income tax benefit of $8.9 million and an effective tax rate of 30.9% for the same period in 2024 [142]. - Adjusted EBITDA for North America was $604.8 million for the nine months ended September 28, 2025, a decrease of 10% from $670.2 million for the same period in 2024 [150]. - Adjusted EBITDA for EMEA increased by 89% to $24.4 million for the three months ended September 28, 2025, compared to $12.9 million for the same period in 2024 [151]. - Adjusted EBITDA for the nine months ended September 28, 2025, was $59.2 million, up 61.5% from $36.6 million in the prior year, primarily due to increased revenues and lower operating expenses [153]. - Adjusted EBITDA for China remained stable at $36.8 million for the three months ended September 28, 2025, compared to the same period in 2024 [155]. - Adjusted EBITDA for Other segments for the nine months ended September 28, 2025, was $111.7 million, a 14% increase from $97.9 million in the prior year [159]. - As of September 28, 2025, the company had $98.1 million in cash and cash equivalents, a slight decrease from $98.3 million as of December 29, 2024 [160]. - The company entered into a Credit Agreement on August 21, 2025, securing a total of $3.45 billion in loans, including a $1.15 billion Term Loan A and a $1.45 billion Term Loan B [161]. - Capital expenditures for the nine months ended September 28, 2025, were $136.4 million, focused on expanding manufacturing capabilities [166]. - There has been no material change in the company's exposure to market risk as described in the Annual Report [185].

Financial Data and Key Metrics Changes - Total reported revenue for Q3 2025 was $700 million, a 4% decrease from $727 million in the prior year, primarily due to lower COVID and donor screening revenue [13][14] - Adjusted EBITDA was $177 million, with an adjusted EBITDA margin of 25%, reflecting a 180 basis point improvement year-over-year [10][17] - Adjusted diluted EPS was $0.80 for Q3, representing a 36% growth year-to-date [17][24] Business Line Data and Key Metrics Changes - Labs business revenue grew by 4%, driven by solid demand for VITROS, ImmunoAssay, and clinical chemistry platforms [6][9] - Immunohematology business grew by 5%, supported by strong demand from blood banks and hospitals [7] - Point-of-care business, particularly the Triage product line, posted 7% growth, with significant contributions from international markets [8][9] Market Data and Key Metrics Changes - North America revenue decreased by 12% overall, but increased by 5% year-over-year when excluding respiratory revenue and the U.S. donor screening exit [9] - Latin America experienced a 21% overall growth, with labs growing by 22% [9] - Japan, Asia-Pacific, and China each grew approximately 5%, while Europe, Middle East, and Africa grew by 3% [9] Company Strategy and Development Direction - The company is focused on margin improvement initiatives, achieving over $140 million in cost savings, aiming for sustainable mid to high 20s EBITDA margins [5][10] - Continued investment in strategic areas to position for long-term growth, including R&D advancements and new product launches [10][11] - The company is preparing for the anticipated FDA clearance of Lex Diagnostics by late 2025 or early 2026, which is expected to impact future growth [12][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's progress and the path ahead, emphasizing a focus on sustainable, profitable growth [12][24] - The company anticipates a typical respiratory season, with revenue timing consistent with pre-pandemic patterns [21][24] - Management acknowledged challenges from tariff impacts but remains committed to offsetting these in 2025 [11][19] Other Important Information - The company recorded a $701 million goodwill impairment charge in Q3, resulting in no goodwill remaining on the balance sheet [20] - Adjusted recurring cash flow is expected to represent 25-30% of adjusted EBITDA for the full year [19][24] - The company expects full-year 2025 total reported revenue between $2.68 billion and $2.74 billion, with adjusted EBITDA guidance of $585 million to $605 million [21][24] Q&A Session Summary Question: Can you provide more details on competitive wins? - Competitive wins have been evenly distributed across geographies, with significant wins in North America, Latin America, and EMEA, focusing on profitable growth rather than just market share [26][27] Question: What is the growth outlook for China? - The company expects mid-single-digit growth in China, with some impact from BBP and debundling dynamics, but less than competitors due to a high proportion of instruments used in stat labs [30][31] Question: Can you elaborate on the 2025 guidance and margin expectations? - The company narrowed its guidance while maintaining the same midpoint, with expectations for slightly lower margins in Q4 due to higher instrument revenue and incentive compensation [34][35] Question: What is the performance of the Sophia franchise? - The Sophia install base remains stable and expanding, with solid performance expected for the flu combo test in the upcoming respiratory season [43][44] Question: How will Lex Diagnostics impact margins? - Lex is expected to have a diluted impact on margins initially, with a more significant rollout planned for the second half of 2026 [50][51]

Financial Highlights - Total revenue for Q3 2025 was $700 million, a decrease of 5% year-over-year on a constant currency basis[5] - Adjusted EBITDA for Q3 2025 was $177 million, representing a 25% margin[5] - Adjusted diluted EPS for Q3 2025 was $080, a decrease of 6% year-over-year[6] - Year-to-date 2025 total revenue was $201 billion, a decrease of 3% year-over-year on a constant currency basis[11] - Year-to-date 2025 adjusted EBITDA was $444 million, representing a 22% margin[11] - Year-to-date 2025 adjusted diluted EPS was $166, an increase of 36% year-over-year[11] Revenue Breakdown - Recurring revenue accounted for 82% of total revenue in Q3 2025[7] and 84% year-to-date[10] - North America accounted for 57% of revenue in Q3 2025[7] and 58% year-to-date[10] - Labs business unit contributed 51% of revenue in both Q3 2025 and year-to-date 2025[7, 10] Financial Guidance - The company projects full-year 2025 revenues to be between $268 billion and $274 billion[22] - The company anticipates an adjusted EBITDA margin of 22% for full-year 2025[22]

Revenue Performance - Total revenue for Q3 2025 was $700 million, a 4% decrease from $727 million in the prior year period, primarily due to lower COVID-19 and Donor Screening revenue[4]. - Non-respiratory revenue was $588 million, an increase of 5% as reported and 4% in constant currency; excluding Donor Screening, non-respiratory revenue grew 6% in constant currency[6]. - Total revenues for the three months ended September 28, 2025, were $699.9 million, down 3.7% from $727.1 million in the same period of 2024[33]. - Total revenues for the nine months ended September 28, 2025, were $2,006.6 million, a decrease of 3.3% from $2,075.1 million[39]. - Total revenue excluding COVID-19 and Donor Screening for the three months ended September 28, 2025, was $658.3 million, reflecting a growth of 5.0% from $626.9 million[43]. - Donor Screening revenue significantly declined by 57.2% to $40.8 million from $95.4 million[39]. - Molecular Diagnostics revenue increased by 4.7% to $18.0 million from $17.2 million[39]. Profitability and Loss - GAAP diluted loss per share for Q3 2025 was $10.78, compared to a diluted loss per share of $0.30 in the prior year period[5]. - GAAP net loss for Q3 2025 was $733 million, compared to a net loss of $20 million in the prior year period, including a non-cash goodwill impairment charge of $701 million[5]. - Adjusted net income for the three months ended September 28, 2025, was $54.7 million, with a diluted EPS of $0.80, compared to $57.4 million and $0.85 in the prior year[26]. - Adjusted EBITDA for Q3 2025 was $177 million, compared to $171 million in the prior year period, with an adjusted EBITDA margin of 25%[8]. - Adjusted EBITDA for the three months ended September 28, 2025, was $177.1 million, with an adjusted EBITDA margin of 25.3%[31]. Operational Changes - The company is winding down its U.S. Donor Screening portfolio, impacting overall revenue[5]. - GAAP operating expenses decreased by 6%, driven by cost-savings initiatives[6]. - Cash used for operating activities was $(26.7) million for the nine months ended September 28, 2025, compared to $19.3 million provided in the same period of 2024[23]. - Cash provided by financing activities increased to $166.9 million in the nine months ended September 28, 2025, from $117.7 million in the prior year[23]. Asset and Liability Management - Total assets decreased from $6,423.6 million in December 2024 to $5,675.1 million in September 2025, a decline of approximately 11.6%[21]. - Total current assets increased from $1,218.9 million to $1,366.7 million, representing a growth of about 12.1%[21]. - Long-term borrowings increased from $2,141.3 million in December 2024 to $2,496.5 million in September 2025, an increase of approximately 16.7%[21]. Revenue Breakdown by Region - North America revenues decreased by 12.6% to $381.4 million from $436.2 million, while EMEA revenues increased by 9.3% to $91.8 million[36]. - Respiratory revenues decreased by 32.1% to $112.3 million, while non-respiratory revenues increased by 4.6% to $587.6 million[33]. - Respiratory revenues for the nine months ended September 28, 2025, were $278.8 million, down 22.7% from $360.7 million[37]. - Non-Respiratory revenues for the same period were $1,727.8 million, showing a slight increase of 0.8% compared to $1,714.4 million[37]. Innovation and Growth - The company added high-sensitivity Troponin on its VITROS platform, indicating a focus on innovation and growth[3].

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Core Insights - QuidelOrtho Corporation emphasizes the transformative role of informatics in laboratory operations, enhancing efficiency, data integrity, and patient care [1][2][3] Group 1: Informatics in Clinical Decision-Making - The latest episode of the Science Bytes podcast discusses how informatics platforms connect instruments, data systems, and clinical decisions, evolving from a helpful tool to a critical engine for laboratory efficiency [1] - Informatics is crucial for laboratories to remain agile, secure, and prepared for future demands, particularly as the need for speed and accuracy increases [2] Group 2: Company Overview - QuidelOrtho Corporation is a leading global provider of diagnostic solutions, specializing in clinical chemistry, immunoassay, immunohematology, and molecular testing [3] - The company focuses on delivering fast, accurate, and reliable diagnostic results that improve patient outcomes across various healthcare settings [3] Group 3: Key Features of Informatics - Informatics enables smarter workflows through automation, speeding up results and reducing errors [5] - The systems ensure quality in decentralized testing, providing point-of-care confidence [5] - Built-in security features maintain cyber safety without hindering performance, while trustworthy data tracking ensures full accountability [5]