Core Insights - QuidelOrtho reported a return to positive adjusted earnings per share and improved adjusted profit margins despite a year-over-year revenue decline [1][9] - The company faced a significant GAAP net loss due to non-cash charges related to the discontinuation of the Savanna molecular testing system [1][8] Financial Performance - GAAP revenue for Q2 2025 was $614 million, exceeding analyst expectations of $611.1 million, but down 3.6% from $637 million in Q2 2024 [2][5] - Adjusted non-GAAP earnings per share were $0.12, significantly higher than the consensus estimate of $0.00 [1][2] - Adjusted EBITDA increased to $107 million, reflecting an 18.9% rise from $90 million in the previous year [2][7] - Operating expenses decreased by 8.9% to $215 million compared to $236 million in Q2 2024 [2][7] Revenue Breakdown - Revenue from COVID-19 diagnostics dropped by 20%, while Donor Screening solutions fell by 61.2% [5][6] - Core segments showed modest growth, with laboratory solutions and immunohematology systems each increasing by 4% [6] - Molecular diagnostics revenue surged by 27%, albeit from a low base [6] Strategic Focus - QuidelOrtho aims to enhance recurring revenue streams and expand its product pipeline, focusing on innovation and operational efficiency [4] - The company is navigating a shift away from pandemic-related products while managing relationships with healthcare providers [4] Cost Management - The company achieved $100 million in annualized cost savings through expense-reduction initiatives [7] - These savings contributed to an improved adjusted EBITDA margin, which increased by 3.3 percentage points year over year [7] Future Outlook - Management maintains full-year revenue guidance of $2.60 billion to $2.81 billion for FY2025, with adjusted EBITDA expected between $575 million and $615 million [9] - Anticipated tariff-related costs of $30 million to $40 million for FY2025 are expected to be offset by additional cost savings [9]

PART I—FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) QuidelOrtho reported a widened net loss in Q2 2025, reflecting asset decrease and significant restructuring charges [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents key financial performance, balance sheet, and cash flow summaries Key Financial Performance (Q2 & YTD 2025 vs 2024) | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $613.9M | $637.0M | $1,306.7M | $1,348.0M | | **Operating Loss** | $(180.7)M | $(117.5)M | $(148.1)M | $(1,875.5)M | | **Net Loss** | $(255.4)M | $(147.7)M | $(268.1)M | $(1,853.7)M | | **Diluted Loss Per Share** | $(3.77) | $(2.20) | $(3.97) | $(27.67) | Consolidated Balance Sheet Summary | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,281.5M | $1,218.9M | | **Total Assets** | $6,379.1M | $6,423.6M | | **Total Current Liabilities** | $1,142.1M | $998.8M | | **Total Liabilities** | $3,586.4M | $3,439.1M | | **Total Stockholders' Equity** | $2,792.7M | $2,984.5M | Consolidated Cash Flow Summary (Six Months Ended) | Cash Flow Activity | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | $18.8M | $(98.6)M | | **Net cash used for investing activities** | $(89.2)M | $(55.5)M | | **Net cash from financing activities** | $120.9M | $144.0M | | **Net increase (decrease) in cash** | $53.2M | $(12.0)M | [Note 3. Revenue](index=9&type=section&id=Note%203.%20Revenue) This note details revenue breakdown by business unit and highlights significant customer concentration Revenue by Business Unit (Three Months Ended) | Business Unit | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Labs | $369.7M | $354.2M | +4.4% | | Immunohematology | $132.3M | $126.9M | +4.3% | | Donor Screening | $13.3M | $34.3M | -61.2% | | Point of Care | $93.0M | $117.2M | -20.6% | | Molecular Diagnostics | $5.6M | $4.4M | +27.3% | | **Total Revenues** | **$613.9M** | **$637.0M** | **-3.6%** | - For the six months ended June 29, 2025, one customer represented **11% of total revenues**[38](index=38&type=chunk) [Note 4. Segment and Geographic Information](index=10&type=section&id=Note%204.%20Segment%20and%20Geographic%20Information) This note provides a breakdown of revenue and Adjusted EBITDA by geographic segment Segment Revenue (Three Months Ended) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | North America | $310.7M | $350.1M | -11.3% | | EMEA | $87.3M | $81.1M | +7.6% | | China | $83.4M | $81.6M | +2.2% | | Other | $132.5M | $124.2M | +6.7% | Segment Adjusted EBITDA (Three Months Ended) | Segment | Q2 2025 Adj. EBITDA | Q2 2024 Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | | North America | $159.7M | $185.6M | -14.0% | | EMEA | $18.3M | $12.1M | +51.2% | | China | $42.1M | $35.7M | +17.9% | | Other | $37.9M | $34.0M | +11.5% | [Note 7. Borrowings](index=15&type=section&id=Note%207.%20Borrowings) This note details the company's borrowing components and compliance with financial covenants Components of Borrowings | Component | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Term Loan | $2,213.9M | $2,282.7M | | Revolving Credit Facility | $390.0M | $198.0M | | **Total Borrowings** | **$2,606.3M** | **$2,483.1M** | - As of June 29, 2025, availability under the Revolving Credit Facility was **$397.3 million**[57](index=57&type=chunk) - The company was in compliance with all financial covenants[58](index=58&type=chunk) [Note 9. Commitments and Contingencies](index=16&type=section&id=Note%209.%20Commitments%20and%20Contingencies) This note outlines ongoing legal proceedings, including class action and derivative lawsuits, with no estimable loss - The company is defending a putative class action lawsuit filed in April 2024, alleging violations of federal securities laws related to statements about COVID-19 diagnostic test sales and the Savanna RVP4 assay[60](index=60&type=chunk) - Two related stockholder derivative complaints were also filed and have been consolidated and stayed[61](index=61&type=chunk) - The company disputes all allegations and cannot estimate a possible range of loss[62](index=62&type=chunk) [Note 13. Restructuring, Integration and Other Charges](index=21&type=section&id=Note%2013.%20Restructuring,%20Integration%20and%20Other%20Charges) This note details significant Q2 2025 restructuring charges from the Optimization Plan and Savanna platform discontinuation - The company recorded **$178.9 million** in restructuring charges in Q2 2025, primarily related to a new 'Optimization Plan' and the discontinuation of the Savanna platform development ('Savanna Exit')[81](index=81&type=chunk)[83](index=83&type=chunk) Q2 2025 Restructuring Charges Breakdown | Charge Category | Amount (in millions) | | :--- | :--- | | Provision for restructuring (Optimization Plan) | $6.6 | | Savanna exit charges | $149.6 | | Integration expenses & other | $23.7 | | **Total Charges** | **$179.9** | - The Optimization Plan is expected to incur cumulative pretax charges of approximately **$100 million** through 2027[82](index=82&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue decline, strategic initiatives, improved operating loss, and liquidity position [Overview](index=23&type=section&id=Overview) This section summarizes financial performance, strategic initiatives, and key operational changes - Six-month 2025 revenues decreased **3%** to **$1.31 billion**, primarily due to lower COVID-19 revenues and the planned wind-down of the U.S. donor screening portfolio[91](index=91&type=chunk)[92](index=92&type=chunk) - In Q2 2025, the company launched a multi-year 'Optimization Plan' to realign costs, expecting to incur ~**$100 million** in charges through 2027 to achieve ~**$50 million** in net savings[93](index=93&type=chunk) - The company announced a strategic refocus of its Molecular Diagnostics business, which includes discontinuing the development of the Savanna platform[94](index=94&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes revenue, cost of sales, and significant charges impacting operating results - Q2 2025 total revenues decreased **4%** YoY to **$613.9 million**, driven by a **61%** decline in Donor Screening and a **21%** decline in Point of Care revenue[102](index=102&type=chunk)[103](index=103&type=chunk) - Cost of sales as a percentage of revenue improved to **55.2%** in Q2 2025 from **56.7%** in Q2 2024, driven by procurement-related cost savings[106](index=106&type=chunk) - Restructuring, integration and other charges increased significantly to **$178.9 million** in Q2 2025 from **$30.9 million** in Q2 2024, due to the Optimization Plan and Savanna Exit[114](index=114&type=chunk) - The company recognized a non-cash goodwill impairment charge of **$1.7 billion** in the first six months of 2024, which did not recur in 2025[115](index=115&type=chunk) [Segment Results](index=28&type=section&id=Segment%20Results) This section details revenue and Adjusted EBITDA performance across geographic segments Q2 2025 vs Q2 2024 Segment Performance | Segment | Revenue Change | Adjusted EBITDA Change | | :--- | :--- | :--- | | **North America** | -11% | -14% | | **EMEA** | +8% | +51% | | **China** | +2% | +18% | | **Other** | +7% | +11% | - The decrease in North America was primarily driven by the wind-down of the U.S. donor screening business and lower sales of QuickVue and Sofia SARS Antigen assays[124](index=124&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses cash position, operating cash flow, and available credit for future funding needs Liquidity Position | Source | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $151.7M | $98.3M | | Available Revolving Credit | $397.3M | $589.0M | - For the first six months of 2025, net cash provided by operating activities was **$18.8 million**, a significant improvement from the **$98.6 million** used in the same period of 2024[144](index=144&type=chunk)[145](index=145&type=chunk) - The company believes current cash, cash from operations, and available credit will be sufficient to fund needs for at least the next 12 months[150](index=150&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material change in market risk exposure from the 2024 Annual Report was reported - There has been no material change in the company's exposure to market risk from that described in its Annual Report[159](index=159&type=chunk) [ITEM 4. Controls and Procedures](index=32&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to material weaknesses, with remediation and SAP ERP implementation ongoing - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 29, 2025, due to previously reported material weaknesses in internal control over financial reporting[160](index=160&type=chunk) - Remediation efforts to address the material weaknesses are ongoing[162](index=162&type=chunk) - In June 2025, the company began migrating certain financial processing systems to a new SAP ERP system as part of its global integration efforts[163](index=163&type=chunk) PART II—OTHER INFORMATION [ITEM 1. Legal Proceedings](index=33&type=section&id=ITEM%201.%20Legal%20Proceedings) This section incorporates Note 9, detailing ongoing legal proceedings including class action and derivative lawsuits - Information regarding legal proceedings is incorporated by reference from Part I, Item 1, 'Financial Statements—Note 9. Commitments and Contingencies'[165](index=165&type=chunk) [ITEM 1A. Risk Factors](index=33&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - There has been no material change in the company's risk factors as previously disclosed in its Annual Report[166](index=166&type=chunk) [Other Items (2, 3, 4, 5, 6)](index=33&type=section&id=Other%20Items%20(2,%203,%204,%205,%206)) No unregistered sales, issuer repurchases, or defaults on senior securities were reported, with exhibits provided - The company reported no unregistered sales of equity securities, issuer purchases of equity securities, or defaults upon senior securities[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - Item 6 provides a list of exhibits filed with the Form 10-Q, including certifications and financial statements in Inline XBRL format[173](index=173&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $614 million, a decrease from $637 million in the prior year, primarily due to lower COVID and donor screening revenue [20][27] - Adjusted EBITDA increased by 19% year-over-year to $107 million, with an adjusted EBITDA margin improvement of 330 basis points to 17% [27] - Adjusted diluted EPS was $0.12, compared to a loss of $0.07 in the prior year, representing a growth of 271% [27] Business Line Data and Key Metrics Changes - The labs business grew by 5%, driven by strong performance in clinical chemistry and immunoassay testing [21] - Immunohematology revenue grew by 3%, with notable strength in Latin America and EMEA [22] - Respiratory business revenue decreased by $2 million, primarily due to a 52% decline in COVID sales [23] Market Data and Key Metrics Changes - North America revenue declined by 12% during the quarter, while international markets showed growth, particularly in Latin America (14% growth) and Japan/Asia Pacific (6% growth) [9][10] - China experienced 2% growth in Q2 despite tariff-related shipment holds, with expectations for mid-single-digit growth for the full year [11][12] Company Strategy and Development Direction - The company is focused on expanding its low OUS penetration as a significant growth opportunity [10] - Plans to acquire Lex Diagnostics to enhance its molecular diagnostics capabilities, with expected FDA clearance and market placements in 2026 [16][17] - Continued emphasis on cost structure optimization and operational improvements to drive profitability [12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in mitigating tariff impacts, estimating potential headwinds of $20 million to $25 million for 2025, lower than previous estimates [15] - The company remains committed to delivering on its strategy to drive growth and expand profitability, with a focus on customer service and innovation [18][27] Other Important Information - The company completed its ERP conversion related to the business combination, which is expected to lower integration costs in the second half of the year [26] - The company anticipates annual operating cost savings of approximately $20 million from the consolidation of its New Jersey manufacturing site [26] Q&A Session Summary Question: Can you walk through your respiratory expectations for the remainder of the year? - The company is not changing flu assumptions, but COVID revenue guidance has been lowered due to lower emergency room visits and hospitalizations [35][36] Question: Can you provide insights on the visibility for China growth? - The company has good visibility for mid-single-digit growth in China, with minimal impact from recent pricing and volume actions [39][45] Question: What are the moving pieces affecting EBITDA? - The decrease in COVID revenue is offset by lower tariff impacts and the discontinuation of the Savannah platform, leading to no change in adjusted EBITDA guidance [48][51] Question: How is the company planning for the commercialization of the Lex platform? - No commercial efforts have started yet; the focus is on FDA approval before any marketing activities [92] Question: What is the outlook for free cash flow in the second half? - The company expects to generate more cash in the second half, targeting $140 million to $160 million of free cash flow [77][78]

Financial Performance - Total revenue for Q2 2025 was $614 million, a decrease of 4% year-over-year on a constant currency basis[5] - Adjusted EBITDA for Q2 2025 was $107 million, resulting in a 17% margin[5] - Adjusted diluted EPS for Q2 2025 was $0.12, a 271% increase year-over-year[6] - Year-to-date total revenue was $131 billion, a decrease of 2% year-over-year on a constant currency basis[11] - Year-to-date adjusted EBITDA was $267 million, resulting in a 20% margin[11] - Year-to-date adjusted diluted EPS was $086, a 132% increase year-over-year[11] Revenue Breakdown - North America accounted for 57% of total revenue[7] - Recurring revenue represented 82% of the total revenue[7] - Labs business unit contributed 51% of the total revenue[7] Cash Flow and Balance Sheet - Q2 2025 adjusted free cash flow was negative $32 million[15] - Year-to-date adjusted free cash flow was $15 million[15] - Total debt was $26 billion[15] Financial Guidance for FY 2025 - Total revenues are projected to be between $260 billion and $281 billion[17] - Adjusted EBITDA is expected to be between $575 million and $615 million, with a margin of 22%[17] - Adjusted diluted EPS is projected to be between $207 and $257[17]

Core Insights - QuidelOrtho Corporation reported a total revenue of $614 million for Q2 2025, a decrease of 3.6% compared to $637 million in the prior year period, primarily due to lower COVID-19 and Donor Screening revenue [3][14] - The company achieved adjusted diluted EPS of $0.12, compared to an adjusted diluted loss per share of ($0.07) in the prior year period, indicating a significant improvement in profitability metrics [5][14] - The company reiterated its full-year 2025 financial guidance, projecting total revenues between $2.60 billion and $2.81 billion and adjusted EBITDA between $575 million and $615 million [7][14] Financial Performance - Total revenue for Q2 2025 was $614 million, down from $637 million in Q2 2024, with a notable decrease in COVID-19 related revenue [3][14] - GAAP diluted loss per share was $3.77, compared to a loss of $2.20 in the prior year, reflecting increased operational challenges [4][14] - Adjusted EBITDA for Q2 2025 was $107 million, up from $90 million in the prior year, with an adjusted EBITDA margin of 17%, a 330 basis point improvement [5][14] Operational Highlights - The company achieved $100 million in annualized cost savings through various initiatives, which contributed to improved margins [2][14] - Labs revenue grew by 4% as reported and 5% in constant currency, indicating strong performance in this segment [14] - The company announced its intention to acquire LEX Diagnostics and initiated a major manufacturing site consolidation [2][14] Revenue Breakdown - Non-respiratory revenue was $567 million, a decrease of 2% year-over-year, while excluding Donor Screening, it grew by 1% in constant currency [14][25] - Respiratory revenue was $47 million, a 20% decrease primarily driven by lower COVID-19 revenue [14] - Immunohematology revenue grew by 4% as reported and 3% in constant currency, showcasing resilience in this area [14] Guidance and Future Outlook - The company maintains its fiscal 2025 guidance, expecting total revenues of $2.60 billion to $2.81 billion and adjusted diluted EPS between $2.07 and $2.57 [7][14] - The anticipated impact of foreign currency exchange is expected to be neutral for the full year based on rates as of July 27, 2025 [7][14] - The company is focused on delivering sustainable value over time for shareholders, customers, and employees [2][14]

Core Insights - QuidelOrtho received three awards and top rankings in the 2025 IMV ServiceTrak Awards, highlighting excellence in customer satisfaction within the diagnostics industry [1][8] - The company achieved a 17-point increase in Net Promoter Score (NPS), indicating significant improvements in customer loyalty and satisfaction [2][8] - QuidelOrtho's success is attributed to investments in customer experience initiatives and employee development, enhancing product quality and service [3][4] Awards and Rankings - QuidelOrtho was recognized for the best overall system performance in both Chemistry and Integrated Systems categories [8] - The company achieved the highest rankings in several key areas, including: - 1 Overall Net Promoter Score (NPS) by Manufacturer - 1 Overall Manufacturer Performance - 1 Overall Service Engineer Performance - 1 Overall Training Performance [8][9] Customer-Centric Approach - The company prioritizes customer beliefs and values, focusing on delivering solutions that enhance laboratory efficiency and outcomes [3][4] - QuidelOrtho's commitment to ongoing innovation and customer-focused solutions is evident in their QuidelOrthoCQ™ offerings, which aim to support customer success [5][6]

Core Insights - The podcast episode discusses the increasing complexities of substance use detection and care in emergency departments, emphasizing the need for rapid diagnostic testing to prevent drug overdose deaths [3][8] - Vonda McAllister, Director of Global Product Management at QuidelOrtho, highlights the importance of continuous monitoring and comprehensive toxicology screening in addressing the crisis of drug overdoses [5] Industry Trends - There is a rising prevalence of potent synthetic drugs such as fentanyl, xylazine, and nitazines, which complicates overdose presentations [8] - The limitations of Narcan (naloxone) are becoming evident, with a growing need for repeated doses due to the potency of new opioid analogs [8] - California's "Tyler's Law" mandates fentanyl testing in suspected overdose cases, reflecting a legislative response to the crisis [8] Company Overview - QuidelOrtho Corporation is a global provider of innovative diagnostic testing solutions, focusing on various health areas including infectious diseases and cardiac biomarkers [7] - The company aims to transform diagnostics into a healthier future through science, innovation, and accessibility [7]

Core Viewpoint - QuidelOrtho Corporation will report its financial results for the second quarter of 2025 on August 5, 2025, after market close [1] Financial Results Announcement - The financial results will be discussed in a conference call scheduled for 2:00 p.m. PT / 5:00 p.m. ET on the same day [2] - Interested parties can access the call via the Company's Investor Relations page or by phone using specific dial-in numbers [2] Replay Availability - A replay of the conference call will be available shortly after the event on the Company's Investor Relations page [3] Company Overview - QuidelOrtho Corporation is a leader in in vitro diagnostics, focusing on innovative solutions that enhance understanding and action in healthcare [4] - The company specializes in immunoassay and molecular testing, clinical chemistry, and transfusion medicine, providing reliable diagnostics across various settings [4][5]

Group 1 - QuidelOrtho Corporation is a leader in in vitro diagnostics, focusing on transforming data into actionable insights for healthcare [4][5]. - The company specializes in immunoassay and molecular testing, clinical chemistry, and transfusion medicine, providing reliable diagnostics across various settings [4]. - QuidelOrtho emphasizes innovation and collaboration with global healthcare customers to enhance diagnostic solutions [5]. Group 2 - A session titled "Real Labs, Real Decisions with Actionable Six Sigma Metrics" is scheduled for July 29, 2025, at the McCormick Convention Center in Chicago [1]. - The session will feature a panel of experts, including Dr. Jared Jaeger from QuidelOrtho and other professionals from notable institutions [2]. - Attendees can register for the session or access a recording if unable to attend [3].

Core Insights - The collaboration between QuidelOrtho and BÜHLMANN Laboratories AG focuses on addressing key healthcare trends such as non-invasive diagnostic tools, cost-effective healthcare solutions, and the emphasis on gastrointestinal and pancreatic health [1][4] - The fCAL and fPELA turbo assays represent significant advancements in the diagnosis of inflammatory bowel disease (IBD) and pancreatic insufficiency, providing fast results that enhance patient care [2][4] - The integration of CALEX Cap technology simplifies sample extraction and preparation, improving operational efficiency and clinical accuracy [3][4] Company Overview - QuidelOrtho Corporation is a leader in in vitro diagnostics, offering solutions that transform data into actionable insights across various healthcare settings [6][7] - BÜHLMANN Laboratories AG has been developing innovative in-vitro diagnostic assays for nearly 50 years, focusing on chemistry and immunological testing [9] Product Features - The fCAL and fPELA turbo assays provide rapid results in less than 10 minutes, with a 90-day on-analyzer stability and compatibility with VITROS Automation Solutions [8] - The collaboration enhances flexibility in sample handling and processing, catering to a wide variety of sample collection methods [4]