Bio-Rad(BIO_B) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview Executive Summary Bio-Rad Laboratories delivered solid Q2 2025 financial results and expanded its Droplet Digital™ PCR portfolio - Bio-Rad achieved solid quarterly performance in the second quarter of 2025, with growth in both revenue and operating margin[3] - Completed the acquisition of Stilla Technologies, a developer of Droplet Digital PCR, effectively expanding its Droplet Digital™ PCR product line with the QX Continuum™ and QX700™ series systems[3] About Bio-Rad Bio-Rad is a global leader in life science and clinical diagnostics with over 7,500 employees and $2.6 billion in 2024 revenue - Bio-Rad Laboratories, Inc, is a leader in developing, manufacturing, and marketing products for the life science research and clinical diagnostics markets[28] - The company has a global network of over 7,500 employees[28] Bio-Rad 2024 Revenues | Metric | Amount | | :--- | :--- | | 2024 Revenues | $2.6 billion | Second-Quarter 2025 Financial Performance Overall Financial Highlights (GAAP & Non-GAAP) Q2 2025 net sales grew 2.1% to $651.6 million, with GAAP net income swinging to a profit of $317.8 million Q2 2025 vs Q2 2024 GAAP Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue (millions) | $651.6 | $638.5 | +2.1% | | Gross margin | 53.0% | 55.6% | -2.6 pp | | Income from operations (millions) | $77.1 | $101.5 | -24.0% | | Net income (loss) (millions) | $317.8 | $(2,165.5) | N/A (swing to profit) | | Income (loss) per diluted share | $11.67 | $(76.26) | N/A (swing to profit) | Q2 2025 vs Q2 2024 Non-GAAP Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue (millions) | $651.6 | $638.5 | +2.1% | | Gross margin | 53.7% | 56.4% | -2.7 pp | | Income from operations (millions) | $88.6 | $106.9 | -17.1% | | Net income (millions) | $71.0 | $88.3 | -19.6% | | Income per diluted share | $2.61 | $3.11 | -16.1% | - Total net sales for the second quarter of 2025 were $651.6 million, an increase of 2.1% compared to the second quarter of 2024; on a currency-neutral basis, quarterly sales grew 1.0%[6] Segment Performance Life Science Segment The Life Science segment's net sales grew 4.9% to $262.8 million, driven by process chromatography and food safety products Q2 2025 Life Science Segment Net Sales | Metric | Q2 2025 Sales (millions) | YoY Growth | Currency-Neutral YoY Growth | | :--- | :--- | :--- | :--- | | Life Science Sales | $262.8 | +4.9% | +3.8% | - The currency-neutral sales increase was primarily driven by higher sales of process chromatography and food safety products[8] Clinical Diagnostics Segment The Clinical Diagnostics segment's net sales were flat at $388.8 million, impacted by lower China reimbursement Q2 2025 Clinical Diagnostics Segment Net Sales | Metric | Q2 2025 Sales (millions) | YoY Growth | Currency-Neutral YoY Growth | | :--- | :--- | :--- | :--- | | Clinical Diagnostics Sales | $388.8 | Flat | -0.7% | - The currency-neutral sales decline was mainly driven by lower diabetes testing reimbursement in China, partially offset by increased demand for quality control and immunology products[9] Other Financial Details Q2 2025 GAAP net income of $317.8 million was driven by favorable changes in the Sartorius AG investment's fair value - The Q2 2025 net income of $317.8 million (versus a net loss of $2,165.5 million in Q2 2024) was primarily attributable to changes in the fair value of the Sartorius AG investment[10] Q2 2025 Effective Tax Rates | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP Effective Tax Rate | 23.2% | 22.3% | | Non-GAAP Effective Tax Rate | 22.7% | 23.5% | - The increase in the 2025 GAAP tax rate was due to the accounting treatment of equity securities and the geographical mix of earnings; the decrease in the 2025 non-GAAP tax rate was due to the geographical mix of earnings[11][12] Full-Year 2025 Financial Outlook Bio-Rad updated its full-year 2025 outlook, raising its non-GAAP operating margin guidance to 12.0% to 13.0% Updated Full-Year 2025 Financial Outlook (Non-GAAP, Currency-Neutral) | Metric | Updated Expectation | Prior Expectation | | :--- | :--- | :--- | | Revenue Growth | 0% to 1.0% | -1.0% to 1.5% | | Operating Margin | 12.0% to 13.0% | 10.0% to 12.0% | Non-GAAP Financial Measures Explanation Purpose and Rationale Non-GAAP measures are used to provide supplemental data for evaluating ongoing operational performance and making decisions - Non-GAAP measures are used to analyze overall business performance, make operating decisions, forecast and plan for future periods, and determine payments under compensation plans[17][38] - Disclosure of non-GAAP financial measures provides useful supplemental data to enhance transparency in reviewing financial and operational performance and helps investors understand and evaluate operating results and compare them to peer companies[17][18][38] Specific Adjustments Non-GAAP adjustments exclude items like amortization of intangibles, restructuring costs, and fair value changes of securities - Items excluded from non-GAAP measures include: amortization of acquisition-related intangible assets; certain acquisition-related expenses and benefits; restructuring charges; asset impairment charges; gains and losses from changes in fair value of equity securities and loan receivables; gains and losses on equity-method investments; and significant legal-related charges or benefits and associated legal costs[16][37] - These items are excluded because they are outside of normal operations and/or, in certain cases, are difficult to forecast accurately, or their uniqueness may limit the comparability of ongoing operational performance[16][18][19][20][21][37] Limitations Non-GAAP measures are not prepared in accordance with GAAP and should not be considered a substitute for GAAP results - Non-GAAP financial measures are not prepared in accordance with Generally Accepted Accounting Principles (GAAP) and may differ from non-GAAP financial measures used by other companies[24] - These non-GAAP financial measures are of limited value because they exclude certain items that may have a material impact on reported financial results[24] - The presentation of this additional information is not intended to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP[24] Financial Statements Condensed Consolidated Statements of Income (Loss) This statement presents GAAP results for the three and six months ended June 30, 2025, compared to the prior year Condensed Consolidated Statements of Income (GAAP) | Metric (millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $651.6 | $638.5 | $1,237.0 | $1,249.3 | | Cost of goods sold | $306.3 | $283.4 | $585.7 | $568.2 | | Gross profit | $345.3 | $355.1 | $651.3 | $681.1 | | Selling, general and administrative expense | $207.7 | $194.7 | $416.5 | $409.6 | | Research and development expense | $60.5 | $58.9 | $134.0 | $125.3 | | Income from operations | $77.1 | $101.5 | $100.8 | $146.2 | | Interest expense | $12.6 | $12.3 | $24.6 | $24.5 | | Foreign currency exchange (gains) losses, net | $1.1 | $(1.7) | $(1.6) | $(3.7) | | (Gains) losses from change in fair market value of equity securities and loan receivable | $(334.4) | $2,895.4 | $(366.2) | $2,473.2 | | Other income, net | $(16.2) | $(18.2) | $(53.4) | $(52.6) | | Income (loss) before income taxes | $414.0 | $(2,786.3) | $497.4 | $(2,295.2) | | (Provision for) benefit from income taxes | $(96.2) | $620.8 | $(115.6) | $513.6 | | Net income (loss) | $317.8 | $(2,165.5) | $381.8 | $(1,781.6) | | Basic earnings (loss) per share | $11.67 | $(76.26) | $13.84 | $(62.61) | | Diluted earnings (losses) per share | $11.67 | $(76.26) | $13.84 | $(62.61) | Condensed Consolidated Balance Sheets This statement presents the company's financial position as of June 30, 2025, compared to December 31, 2024 Condensed Consolidated Balance Sheets (GAAP) | Metric (millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current assets: | | | | Cash and cash equivalents | $369.3 | $488.1 | | Short-term investments | $1,004.5 | $1,176.4 | | Accounts receivable, net | $469.9 | $452.5 | | Inventories, net | $798.8 | $760.0 | | Other current assets | $168.6 | $153.3 | | Total current assets | $2,811.1 | $3,030.3 | | Property, plant and equipment, net | $549.7 | $528.1 | | Operating lease right-of-use assets | $190.4 | $160.5 | | Goodwill, net | $581.6 | $410.5 | | Purchased intangibles, net | $396.9 | $293.6 | | Other investments | $5,576.5 | $4,839.2 | | Other assets | $107.9 | $101.9 | | Total assets | $10,214.1 | $9,364.1 | | Current liabilities: | | | | Accounts payable, accrued payroll and employee benefits | $297.1 | $246.5 | | Current maturities of long-term debt | $1.3 | $1.2 | | Income and other taxes payable | $36.2 | $31.2 | | Other current liabilities | $214.3 | $188.9 | | Total current liabilities | $548.9 | $467.8 | | Long-term debt, net of current maturities | $1,201.1 | $1,200.4 | | Other long-term liabilities | $1,335.4 | $1,126.6 | | Total liabilities | $3,085.4 | $2,794.8 | | Total stockholders' equity | $7,128.7 | $6,569.3 | | Total liabilities and stockholders' equity | $10,214.1 | $9,364.1 | Condensed Consolidated Statements of Cash Flows This statement details cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 Condensed Consolidated Statements of Cash Flows (GAAP) | Metric (millions) | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Cash flows from operating activities: | | | | Net cash provided by operating activities | $246.4 | $167.4 | | Cash flows from investing activities: | | | | Payments for acquisitions | $(216.7) | — | | Payments for purchases of marketable securities and investments | $(306.6) | $(654.5) | | Proceeds from sales and maturities of marketable securities and investments | $490.8 | $662.9 | | Other investing activities | $(80.0) | $(82.4) | | Net cash used in investing activities | $(112.5) | $(74.0) | | Cash flows from financing activities: | | | | Payments on long-term debt | $(0.3) | $(0.3) | | Payments for purchases of treasury stock | $(242.1) | $(105.7) | | Other financing activities | $8.4 | $9.4 | | Net cash used in financing activities | $(234.0) | $(96.6) | | Effect of foreign exchange rate changes on cash | $(18.0) | $6.5 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(118.1) | $3.3 | | Cash, cash equivalents and restricted cash at beginning of period | $489.8 | $404.4 | | Cash, cash equivalents and restricted cash at end of period | $371.7 | $407.7 | Reconciliation of GAAP to Non-GAAP Measures Income Statement Adjustments This section reconciles GAAP to non-GAAP income statement items for Q2 and YTD 2025 and 2024 Reconciliation of GAAP to Non-GAAP Gross Profit | Metric (millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP gross profit | $345.3 | $355.1 | $651.3 | $681.1 | | Amortization of purchased intangibles | $4.5 | $4.4 | $8.9 | $8.9 | | Restructuring (benefits) costs | $0.1 | $0.6 | $4.7 | $1.1 | | Non-GAAP gross profit | $349.9 | $360.1 | $664.9 | $691.1 | | GAAP gross margin | 53.0% | 55.6% | 52.7% | 54.5% | | Non-GAAP gross margin | 53.7% | 56.4% | 53.8% | 55.3% | Reconciliation of GAAP to Non-GAAP Income from Operations | Metric (millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP income from operations | $77.1 | $101.5 | $100.8 | $146.2 | | Amortization of purchased intangibles | $5.2 | $5.2 | $10.2 | $10.8 | | Acquisition related (benefits) costs | $2.8 | $0.2 | $2.8 | $0.4 | | Restructuring (benefits) costs | $2.4 | $(1.5) | $35.6 | $5.6 | | Other non-recurring items (2) | $1.1 | $1.5 | $2.2 | $3.0 | | Non-GAAP income from operations | $88.6 | $106.9 | $151.6 | $166.0 | | GAAP operating margin | 11.8% | 15.9% | 8.1% | 11.7% | | Non-GAAP operating margin | 13.6% | 16.7% | 12.3% | 13.3% | Reconciliation of GAAP to Non-GAAP Net Income (Loss) | Metric (millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP net income (loss) | $317.8 | $(2,165.5) | $381.8 | $(1,781.6) | | Amortization of purchased intangibles | $5.2 | $5.2 | $10.2 | $10.8 | | Acquisition related (benefits) costs | $2.8 | $0.2 | $2.8 | $0.4 | | Restructuring (benefits) costs | $2.4 | $(1.5) | $35.6 | $5.6 | | (Gains) losses from change in fair market value of equity securities and loan receivable | $(334.4) | $2,895.4 | $(366.2) | $2,473.2 | | (Gains) losses on equity-method investments | $0.7 | $0.9 | $(0.8) | $1.7 | | Other non-recurring items (2) | $1.1 | $1.5 | $2.2 | $3.0 | | Income tax effect of non-GAAP adjustments (1) | $75.4 | $(647.9) | $76.4 | $(559.5) | | Non-GAAP net income | $71.0 | $88.3 | $142.0 | $153.6 | | GAAP diluted income (loss) per share | $11.67 | $(76.26) | $13.84 | $(62.61) | | Non-GAAP diluted income per share | $2.61 | $3.11 | $5.15 | $5.39 | Adjusted EBITDA This section reconciles GAAP net income (loss) to Adjusted EBITDA for Q2 and YTD 2025 and 2024 Reconciliation of Net Income (Loss) to Adjusted EBITDA | Metric (millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP net income (loss) | $317.8 | $(2,165.5) | $381.8 | $(1,781.6) | | Interest expense | $12.6 | $12.3 | $24.6 | $24.5 | | (Provision for) benefit from income taxes | $96.2 | $(620.8) | $115.6 | $(513.6) | | Depreciation and amortization | $40.6 | $36.4 | $78.7 | $73.5 | | Foreign currency exchange (gains) losses, net | $1.1 | $(1.7) | $(1.6) | $(3.7) | | Other income, net | $(16.2) | $(18.2) | $(53.4) | $(52.6) | | (Gains) losses from change in fair market value of equity securities and loan receivable | $(334.4) | $2,895.4 | $(366.2) | $2,473.2 | | Dividend from Sartorius AG | — | — | $17.6 | $17.9 | | Acquisition related (benefits) costs | $2.8 | $0.2 | $2.8 | $0.4 | | Restructuring (benefits) costs | $2.4 | $(1.5) | $35.6 | $5.6 | | Other non-recurring items (2) | $1.1 | $1.5 | $2.2 | $3.0 | | Adjusted EBITDA | $124.0 | $138.1 | $237.7 | $246.6 | | Adjusted EBITDA Margin | 19.0% | 21.6% | 19.2% | 19.7% | Free Cash Flow This section reconciles GAAP net cash from operating activities to free cash flow for Q2 and YTD 2025 and 2024 Reconciliation of Free Cash Flow | Metric (millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP net cash provided by operating activities | $116.5 | $97.7 | $246.4 | $167.4 | | Payments for property, plant, and equipment | $(45.7) | $(42.3) | $(80.1) | $(82.5) | | Free cash flow | $70.8 | $55.4 | $166.3 | $84.9 | Additional Information Conference Call and Webcast Bio-Rad will host a conference call and webcast on July 31, 2025, to discuss Q2 2025 results and outlook - The conference call is scheduled for July 31, 2025, at 2:00 PM Pacific Time (5:00 PM Eastern Time)[14] - Dial-in numbers are (800) 715-9871 within the U.S. or (+1) (646) 307-1963 outside the U.S., with access code 9562470[14] - A live webcast and supplemental earnings presentation slides will be available in the "Events & Presentations" section of the company's website's Investor Relations area[15] Forward-Looking Statements This section outlines risks and uncertainties related to forward-looking statements and disclaims any update obligation - Statements concerning future financial performance or results are forward-looking and involve risks and uncertainties[29] - Risks include international operations, global economic and geopolitical conditions, tariffs or other trade barriers, reductions in customer government funding or capital expenditures, uncertainty of a biopharma recovery, international legal and regulatory risks, ability to develop and market new or improved products, ability to compete effectively, foreign currency fluctuations, ability to successfully integrate acquired companies, products or technologies, supply chain issues, product quality and liability issues, changes in the healthcare industry, and natural disasters and other catastrophic events beyond the company's control[29] - Bio-Rad Laboratories, Inc, assumes no obligation to update these forward-looking statements[29] Contact Information This section provides contact details for investor relations and corporate communications - Investor Contact: Edward Chung, Investor Relations, 510-741-6104, ir@bio-rad.com[30] - Media Contact: Anna Gralinska, Corporate Communications, 510-741-6643, cc@bio-rad.com[30]