Bio-Rad(BIO) - 2025 Q1 - Quarterly Results

First-Quarter 2025 Financial Results Management Commentary The company navigated a challenging first quarter, achieving solid margins through disciplined expense management and moderating its full-year outlook - CEO Norman Schwartz highlighted a challenging Q1, but noted solid margins were delivered via focused execution and expense management[3] - The company is moderating its full-year 2025 outlook due to current market uncertainties and the evolving macro environment[3] Financial Highlights Q1 2025 saw a 4.2% revenue decline to $585.4 million, with a significant drop in GAAP net income but a rise in non-GAAP net income Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Results | | | | | Revenue (millions) | $585.4 | $610.8 | -4.2% | | Gross Margin | 52.3% | 53.4% | -1.1 p.p. | | Net Income (millions) | $64.0 | $383.9 | -83.3% | | Diluted EPS | $2.29 | $13.45 | -83.0% | | Non-GAAP Results | | | | | Revenue (millions) | $585.4 | $610.8 | -4.2% | | Gross Margin | 53.8% | 54.2% | -0.4 p.p. | | Net Income (millions) | $71.0 | $65.3 | +8.7% | | Diluted EPS | $2.54 | $2.30 | +10.4% | - Total net sales decreased by 4.2% as reported and 1.5% on a currency-neutral basis compared to Q1 2024, primarily due to lower sales in the Life Science segment[5] Segment Performance The Life Science segment's sales declined due to research market challenges, while Clinical Diagnostics saw a smaller decrease impacted by China's reimbursement policies Q1 2025 Net Sales by Segment (in millions) | Segment | Q1 2025 Sales | YoY Change (Reported) | YoY Change (Currency-Neutral) | | :--- | :--- | :--- | :--- | | Life Science | $228.6 | -5.4% | -3.5% | | Clinical Diagnostics | $356.8 | -3.2% | -0.1% | - The Life Science sales decline was driven by ongoing challenges in the academic research market, particularly in the Americas[6] - The Clinical Diagnostics sales decrease was mainly due to lowered reimbursements for diabetes testing in China, partly offset by increased demand for quality control products[7] Detailed Financial Performance GAAP gross margin and operating income declined, with a significant drop in GAAP net income driven by changes in the fair value of equity investments - The substantial decrease in GAAP net income ($64.0M in Q1 2025 vs $383.9M in Q1 2024) was largely due to a smaller gain from the change in fair market value of its investment in Sartorius AG compared to the prior year[9] Q1 2025 Operational Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Gross Margin | 52.3% | 53.4% | | GAAP Income from Operations | $23.7M | $44.6M | | Non-GAAP Gross Margin | 53.8% | 54.2% | | Non-GAAP Income from Operations | $63.0M | $59.0M | - The non-GAAP effective tax rate for Q1 2025 was 20.6%, a decrease from 22.4% in Q1 2024, driven by the geographical mix of earnings[11] Updated Full-Year 2025 Financial Outlook The company lowered its full-year 2025 outlook, reducing expectations for both non-GAAP currency-neutral revenue growth and non-GAAP operating margin Full-Year 2025 Outlook Revision | Metric | Updated 2025 Outlook | Prior 2025 Outlook | | :--- | :--- | :--- | | Non-GAAP, Currency-Neutral Revenue Growth | -1.0% to +1.5% | +1.5% to +3.5% | | Non-GAAP Operating Margin | 10.0% to 12.0% | 13.0% to 13.5% | Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Income The Q1 2025 income statement shows net sales of $585.4 million, resulting in a net income of $64.0 million, or $2.29 per diluted share Q1 2025 Income Statement Highlights (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $585.4 | $610.8 | | Gross profit | $306.0 | $325.9 | | Income from operations | $23.7 | $44.6 | | Net income | $64.0 | $383.9 | | Diluted EPS | $2.29 | $13.45 | Condensed Consolidated Balance Sheets Total assets grew to $9.53 billion as of March 31, 2025, with cash and cash equivalents at $521.4 million and total equity at $6.68 billion Balance Sheet Summary (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $9,526.9 | $9,364.1 | | Cash and cash equivalents | $521.4 | $488.1 | | Total Liabilities | $2,847.5 | $2,794.8 | | Total Stockholders' Equity | $6,679.4 | $6,569.3 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities increased significantly to $129.9 million in Q1 2025, contributing to a higher quarter-end cash balance Q1 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $129.9 | $69.8 | | Net cash provided by (used in) investing activities | $2.9 | $(43.1) | | Net cash used in financing activities | $(97.7) | $— | | Net increase in cash | $33.3 | $29.4 | Non-GAAP Financial Measures Use of Non-GAAP and Currency-Neutral Reporting The company utilizes non-GAAP measures, excluding certain items, to provide a clearer view of ongoing operational performance and facilitate comparisons - The company uses non-GAAP measures to analyze business performance, make operating decisions, and forecast for future periods[16] - Excluded items from non-GAAP calculations include amortization of acquisition-related intangibles, restructuring charges, gains/losses from equity securities, and significant legal costs, as they are considered outside of normal operations[15][18][19] Reconciliation of GAAP to Non-GAAP Measures Q1 2025 non-GAAP net income was reconciled to $71.0 million from a GAAP net income of $64.0 million, with Adjusted EBITDA rising to $113.7 million Q1 2025 GAAP to Non-GAAP Reconciliation Highlights (in millions) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Gross Profit | $306.0 | $9.0 | $315.0 | | Income from Operations | $23.7 | $39.3 | $63.0 | | Net Income | $64.0 | $7.0 | $71.0 | Q1 2025 Adjusted EBITDA (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $113.7 | $108.4 | | Adjusted EBITDA Margin | 19.4% | 17.7% | Other Information Conference Call Information A conference call and webcast are scheduled for May 1, 2025, to discuss the first-quarter financial results with management - A conference call to discuss Q1 2025 results is scheduled for May 1, 2025, at 2:30 PM Pacific Time[13] - A live webcast and replay will be accessible in the 'Investor Relations' section of the company's website[14] About Bio-Rad Bio-Rad is a global leader in life science research and clinical diagnostics, serving a diverse customer base with over 7,500 employees worldwide - Bio-Rad develops, manufactures, and markets products for life science research and clinical diagnostics[25] - The company's customers include universities, research institutions, hospitals, and biopharmaceutical companies[25] Forward-Looking Statements The report contains forward-looking statements, including the 2025 financial outlook, which are subject to significant risks and uncertainties - The release includes forward-looking statements regarding future financial performance, including the updated 2025 revenue and operating margin outlook[26] - Key risks include international operations, global economic conditions, the pace of biopharma sector recovery, and supply chain issues[26]