Financial Data and Key Metrics Changes - Organic revenue declined 1% in Q1, primarily due to clinical stage timing from large customers in the cell therapy business and ongoing softness in biotech funding [4][19] - Adjusted EPS for the quarter was $0.42, flat year-over-year, while GAAP EPS increased to $0.24 from $0.21 in the prior year [18][19] - Total revenue for Q1 was $286.6 million, representing a 1% year-over-year decline on both an organic and reported basis [19] - Adjusted gross margin improved to 70.2%, up from 69.5% last year, driven by the exosome diagnostics divestiture and ongoing productivity initiatives [20] - Adjusted operating margin reached 29.9%, up 90 basis points year-over-year [20] Business Line Data and Key Metrics Changes - Protein sciences segment reported sales of $202.2 million, down 1% year-over-year, with organic revenue declining 3% [22] - Diagnostics and spatial biology segment sales were $79.5 million, down 4% year-over-year, but achieved 3% organic growth [22] - The protein analytical tools business showed notable strength from large pharma customers, contributing to organic growth [22] Market Data and Key Metrics Changes - Revenue from large pharma customers increased low double digits, while biotech spending continued to decline, resulting in high single-digit declines in Q1 [5][19] - North America experienced mid-single digit revenue decline, while Europe and Asia posted low single-digit growth [19][22] - China achieved its second consecutive quarter of growth, driven by strong performance in ProteinSimple analytical instruments and spatial biology portfolio [7][19] Company Strategy and Development Direction - The company is focused on productivity and cost management while investing in strategic growth pillars [5][17] - The acquisition of Wilson Wolf is expected to enhance the company's position in the cell therapy market, with plans to complete the acquisition by the end of calendar 2027 [9][10] - The company anticipates a return to positive organic growth in the second half of the fiscal year, driven by improving conditions in the biopharma sector and stabilization in U.S. academic markets [25][39] Management's Comments on Operating Environment and Future Outlook - Management noted that underlying market trends remain constructive, with early signs of stabilization in biotech activity levels [6][18] - The company expects Q2 organic growth to be consistent with Q1, reflecting continued strength in pharma and renewed growth in China [25] - Management expressed optimism about the recovery in biotech funding and the potential for lower interest rates to support investment levels in emerging biotech companies [6][35] Other Important Information - The company achieved an estimated 40% reduction in Scope 1 and 2 emissions during fiscal 2025, transitioning to 100% renewable electricity at its largest site [17] - The diagnostics business grew mid-single digits in Q1, supported by balanced performance across core diagnostic controls and kits [15] Q&A Session Summary Question: How long might the air pocket persist for GMP proteins? - Management indicated that the headwind from two large customers would be approximately 400 basis points in Q2, but they remain positive about the underlying recovery in the biotech markets [28][30] Question: Are growth plans for fiscal 2026 still low single-digit? - Management confirmed that plans remain unchanged, with a commitment to the cell therapy market and expectations for low single-digit growth for the year [30] Question: What is the outlook for the second half of the fiscal year? - Management expects a return to positive organic growth in the second half, driven by easing headwinds and improved market conditions [25][39] Question: Can you provide an update on Wilson Wolf? - Wilson Wolf had a flat quarter, but management remains optimistic about its potential to accelerate growth in the cell therapy market [43][44] Question: What are the assumptions for government shutdown impacts? - Management noted no significant changes in academic customer buying patterns due to the government shutdown, indicating stability in the academic market [52]