Financial Data and Key Metrics Changes - The company reported revenue of $1 billion in Q3 2025, a 0.5% decrease year over year, with organic revenue declining 1.6% [12] - Earnings per share were $2.43 in Q3, a 6.2% decline from the previous year, but slightly above prior outlook [15] - The operating margin was 19.7%, a decrease of 20 basis points year over year [14] - Free cash flow for Q3 was $178.2 million, down from $213.1 million in the same period last year [36] Business Line Data and Key Metrics Changes - DSA segment revenue was $600.7 million, a 3.1% year-over-year decrease on an organic basis [16] - RMS revenue increased by 6.5% on an organic basis to $213.5 million [20] - Manufacturing segment revenue was $190.7 million, a 5.1% decrease on an organic basis [24] Market Data and Key Metrics Changes - Revenue for small and mid-sized biotech clients declined due to tighter budgets [12] - Revenue for global biopharmaceutical clients remained below last year's level, primarily due to the loss of a large commercial client [12] - DSA backlog declined to $1.80 billion from $1.93 billion at the end of June [16] Company Strategy and Development Direction - The company is focusing on strengthening its scientific portfolio, divesting underperforming assets, and maximizing financial performance [4][5] - A new $1 billion stock repurchase authorization was approved, replacing the previous authorization [9] - The company aims to enhance scientific capabilities in bioanalysis, in vitro services, and new approach methodologies (NAMs) [5][27] Management's Comments on Operating Environment and Future Outlook - Management noted that client demand has stabilized, with signs of improvement in the biotech funding environment [10] - There is cautious optimism regarding the recovery of biotech demand, supported by improved booking activity [10][18] - The company expects DSA revenue to decline 2.5%-3.5% on an organic basis for the year [18] Other Important Information - The company has identified $225 million in annualized cost savings, with an additional $70 million expected [8][52] - The non-GAAP tax rate in Q3 was 28.3%, an increase of 700 basis points year-over-year [35] - The company is actively working to divest certain assets representing approximately 7% of estimated 2025 revenue [7] Q&A Session Summary Question: Overall backdrop and demand trends - Management observed an increase in proposals and a decline in cancellations, indicating improved demand from clients [41] Question: DSA growth outlook for 2026 - Management expressed cautious optimism about DSA growth, contingent on continued improvement in bookings and client budgets [56] Question: NAMs adoption among clients - Management noted that while there is interest in NAMs, most clients are still reliant on traditional methods until alternatives are scientifically validated [50]