Core Viewpoint - The article discusses the recent inclusion of three Chinese biotechnology companies in the U.S. Entity List, highlighting the ongoing tensions in the biotechnology sector between the U.S. and China, particularly in relation to national security concerns and technological competition [2][3]. Group 1: U.S. Policy Developments - On September 12, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced the addition of 23 Chinese entities to the Entity List due to actions deemed contrary to U.S. national security or foreign policy interests, including three from the biotechnology and life sciences sector [2]. - The entities listed will require export licenses for all items governed by the Export Administration Regulations (EAR), with a presumption of denial for such licenses, indicating a significant barrier for these companies in international trade [2]. Group 2: Companies Listed - The three biotechnology companies added to the Entity List are: 1. Beijing Tianyi Huiyuan Biotech, established in 2008, focuses on gene sequence detection, gene synthesis, gene editing, and protein expression vector assembly, serving various hospitals and research institutions [3]. 2. Beijing Tsingke Biotech Co., Ltd., founded in 2017, operates as a comprehensive gene synthesis platform, providing a range of services including gene synthesis, antibody proteins, and molecular reagents, and has attracted significant investment, including a B-round financing of 400 million RMB [4]. 3. Sangon Biotech (Shanghai) Co., Ltd., founded in 2003, offers over 20,000 products across seven categories, including DNA synthesis and sequencing, and has a global presence in 147 countries, recognized as a major player in the DNA synthesis market [5].

Financial Data and Key Metrics Changes - The company generated revenue of $665 million in Q1 2025, resulting in 4% organic growth, with a 1% headwind from foreign exchange [27][31] - Adjusted EPS for the quarter was $1.01, exceeding expectations of $0.93 to $0.95 [7][29] - Adjusted operating margins were reported at 25.6%, slightly up year-over-year and above expectations [28] Business Line Data and Key Metrics Changes - Life Sciences segment revenue was $340 million, up 1% reported and 2% organically, with low single-digit growth in pharma biotech customers and a decline in academic and government customers [32] - Diagnostics segment revenue reached $324 million, up 3% reported and 5% organically, driven by high single-digit growth in immunodiagnostics [33] Market Data and Key Metrics Changes - The Americas and Europe experienced mid-single-digit growth, while Asia saw low single-digit growth, with China also growing in low single digits [31] - U.S. academic customers, representing over 5% of total revenue, showed cautious spending due to uncertainties in funding [23][24] Company Strategy and Development Direction - The company is focused on maintaining strong organic growth and operational agility to navigate macroeconomic challenges [5][20] - A recent expanded alliance with Genomics England aims to enhance newborn genomic sequencing capabilities, positioning the company as a leader in this area [9] - The software business, representing about 8% of total revenue, grew over 20% organically in Q1 and is expected to continue strong growth [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's resilience and ability to adapt to changing market conditions, reaffirming a full-year adjusted EPS outlook of $4.9 to $5 [19][37] - The company anticipates a gross impact of approximately $135 million from tariffs, but expects to mitigate most of this through proactive measures [18][19] Other Important Information - The company repurchased $154 million of its shares in Q1, reducing the outstanding share count to 119.4 million [7][29] - The net debt to adjusted EBITDA leverage ratio was reported at 2.4 times, with all debt being fixed rate [30] Q&A Session Summary Question: Can you talk about the tariff impact and what products are affected? - Management indicated that they have been proactive in adjusting their supply chain to mitigate the $135 million gross tariff impact, focusing on products sold from the U.S. to China [41][43] Question: What are the expectations for the Life Sciences segment? - The Life Sciences segment is expected to see low single-digit growth, with instrumentation under pressure but solid growth in reagents [45][48] Question: How is the company managing its exposure in China? - The company expects low single-digit growth in China, with a slight decline in Life Sciences and mid-single-digit growth in Diagnostics [56] Question: What is the outlook for the software business? - The software business is expected to continue strong double-digit growth, with a focus on expanding into new markets [62][90] Question: What are the long-term margin expectations? - Long-term operating margin expectations remain unchanged, with a focus on SG&A volume leverage as growth continues [104]