Financial Data and Key Metrics Changes - Adjusted EPS for Q2 was $0.46, up 10% year-over-year, while GAAP EPS increased to $0.24 from $0.22 in the prior year [19] - Total revenue for Q2 was $295.9 million, flat year-over-year on both an organic and reported basis, with foreign currency exchange contributing a 2% tailwind [19][20] - Adjusted gross margin was 68.5%, down from 70.5% last year, driven by unfavorable product and customer mix [21] - Adjusted operating margin reached 31.1%, up 100 basis points year-over-year, reflecting productivity gains and cost management [21][22] Business Line Data and Key Metrics Changes - Protein Sciences segment reported sales of $215.1 million, an increase of 2% year-over-year, but organic revenue declined 1% [23] - Diagnostics and spatial biology segment sales were $81.2 million, down 4% year-over-year, with organic growth of 3% after accounting for divestitures [25] - Core reagents and assays, proteomic analysis instruments, and diagnostic kits all saw modest growth in Q2 compared to Q1 [5][6] Market Data and Key Metrics Changes - Revenue from large pharma customers increased low double digits for the fourth consecutive quarter, while emerging biotech declined mid-single digits [9] - U.S. academic business experienced a modest decline, partially offset by stable growth in Europe, resulting in a low single-digit decline overall for this end market [10] - China grew mid-single digits, marking its third consecutive quarter of growth, supported by R&D investments from CDMO, CRO, and biotech customers [10] Company Strategy and Development Direction - The company focuses on four strategically important growth verticals: cell therapy, proteomic analytical instrumentation, spatial biology, and precision diagnostic tools, which now represent 47% of total revenue [7] - The company is committed to maintaining a strong profitability profile while investing in strategic growth initiatives [6][18] - The upcoming fiscal year 2027 is expected to see normalization in growth as headwinds from key customers dissipate [26][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stabilization of end markets, particularly in biotech funding and U.S. academic budgets, which are expected to improve gradually [18][60] - The company anticipates that the headwinds from FDA Fast Track designations for key customers will moderate, allowing for improved growth in the future [26][66] - Management highlighted the importance of AI as a driver for demand in biotech, suggesting it will enhance productivity and specificity in R&D [44][45] Other Important Information - The company is actively pursuing M&A opportunities to enhance its portfolio, particularly in novel antibodies and cell therapy [80] - The acquisition of Wilson Wolf is on track, with expectations to complete it by the end of calendar year 2027 [13][81] - The company launched Cultrex Synthetic Hydrogel to support organoid development, aligning with trends towards reduced use of animal models [78] Q&A Session Summary Question: Growth cadence and expectations for fiscal year 2026 - Management confirmed expectations for mid-single-digit growth in Q4, primarily driven by normalization from key customers and continued strength in pharma [30][32] Question: Drivers of gross margin changes - Management indicated that unfavorable product mix and customer profiles impacted gross margins, but improvements are expected in the latter half of the year [34][36] Question: Impact of AI on biotech demand - Management believes AI will enhance customer capabilities and drive demand for more complex materials, benefiting the company [44][45] Question: Biotech funding and timing of revenue impact - Management noted a typical six-month lag for funding improvements to translate into revenue, with positive trends observed in funding activity [61][62] Question: Cell therapy customer impact on GMP business - Management expects normalization in the GMP business as headwinds from key customers dissipate, with underlying growth previously observed at 30% [65][66]

Financial Data and Key Metrics Changes - Adjusted EPS for Q2 was $0.46, up 10% year-over-year, with GAAP EPS at $0.24, up from $0.22 in the prior year [19][20] - Total revenue for Q2 was $295.9 million, flat year-over-year on both an organic and reported basis, with foreign currency exchange contributing a 2% tailwind [20][22] - Adjusted gross margin was 68.5%, down from 70.5% last year, while adjusted operating margin reached 31.1%, up 100 basis points year-over-year [22][24] Business Line Data and Key Metrics Changes - Protein Sciences segment reported sales of $215.1 million, with organic revenue declining 1%, but excluding cell therapy timing impacts, organic growth was 4% [24][25] - Diagnostics and spatial biology segment sales were $81.2 million, down 4% year-over-year, with 3% organic growth after accounting for divestiture impacts [26] - Core reagent and assay portfolio delivered low double-digit growth for the quarter, while proteomic analytical tools grew upper single digits [15][25] Market Data and Key Metrics Changes - Revenue from large pharma customers increased low double digits for the fourth consecutive quarter, while emerging biotech declined mid-single digits [9][21] - U.S. academic business saw a modest decline, partially offset by stable growth in Europe, resulting in a low single-digit decline overall for this end market [10][21] - China grew mid-single digits, marking its third consecutive quarter of growth, supported by R&D investments from CDMO, CRO, and biotech customers [10][21] Company Strategy and Development Direction - Company focuses on four strategically important growth verticals: cell therapy, proteomic analytical instrumentation, spatial biology, and precision diagnostic tools, which now represent 47% of total revenue [6][19] - The company aims to balance growth investments with operational efficiency, targeting 100 basis points of operating margin expansion for the full fiscal year [29] - Continued emphasis on innovation and product introductions to drive growth in key markets, particularly in organoids and multiomics [80][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stabilization of end markets, particularly in biotech funding and U.S. academic budgets, which are expected to improve gradually [18][27] - The company anticipates that the headwinds from FDA Fast Track designations for two major customers will moderate, allowing for a return to normalized growth [27][68] - Overall sentiment remains positive regarding the company's competitive position and the potential for growth in the upcoming fiscal year [19][68] Other Important Information - The company is actively pursuing M&A opportunities to enhance its portfolio, particularly in novel antibodies and cell therapy [84] - The acquisition of Wilson Wolf is on track, with expectations to complete it by the end of calendar year 2027 [12][84] - The company launched Cultrex Synthetic Hydrogel to support organoid development, aligning with trends towards reducing animal model usage [80] Q&A Session Summary Question: Growth cadence and expectations for fiscal year 2026 - Management confirmed expectations for mid-single-digit growth in fiscal year 2026, excluding specific customer impacts [31][32] Question: Drivers of gross margin changes - Management explained that gross margin decline was due to unfavorable product mix and customer profiles, with expectations for gradual improvement [34][36] Question: Impact of AI on biotech demand - Management believes AI will enhance customer capabilities and drive demand for more complex materials, benefiting the company [44][45] Question: Biotech funding and timing of revenue impact - Management indicated a typical 6-month lag for funding improvements to reflect in revenue, with positive trends observed in funding and M&A activity [62][63] Question: Cell therapy customer impacts on GMP business - Management noted that the two major customers' Fast Track designations have created temporary headwinds, but growth is expected to normalize post-2027 [66][68]

FINANCIAL RESULTS: Q3:2025 SLIDE SUPPLEMENT • Welcome • Business Highlights and Updates Stephen Gunstream, President and Chief Executive Officer • Financial Results and 2025 Outlook Matt Lowell, Chief Financial Officer • Q&A Forward-looking statements and use of non-GAAP financial measures Statements in this presentation about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements." These statemen ...

Core Insights - Bio-Techne Corporation (TECH) is scheduled to release its first-quarter fiscal 2026 results on November 5, before market opening [1] - The company reported adjusted earnings per share (EPS) of 53 cents in the last quarter, exceeding the Zacks Consensus Estimate by 6.00%, with an average surprise of 9.22% over the last four quarters [1] Q1 Estimates for TECH - The Zacks Consensus Estimate for revenues is $289.3 million, reflecting a slight decrease of 0.04% from the previous year [2] - EPS is expected to remain flat at 42 cents year-over-year [2] Estimate Revision Trend - Earnings estimates have remained constant at 42 cents over the past 30 days [3] Factors Affecting Performance - Management indicated that macro uncertainties, including tariffs and potential NIH budget cuts, could slow growth momentum in Q1 fiscal 2026 [4] - The Protein Sciences division, which accounted for 72.5% of net sales in fiscal 2025, is expected to drive revenues through proteomic analytical tools and cell therapy workflow solutions [5] Product Portfolio and Growth - The core portfolio includes over 6,000 proteomic agents and 400,000 antibody types, supporting global customers in advancing therapeutics for precision diagnostics [6] - The protein analytical instrumentation business is anticipated to show strong momentum, continuing a trend of mid-teens year-over-year growth in instrument placements [7] - Demand for the next-generation high-throughput instrument, Leo, is expected to remain strong [8] Strategic Developments - A strategic distribution partnership with Sphere Bio will allow Bio-Techne to distribute ultrasensitive immunoassays for Alzheimer's disease biomarkers, potentially impacting Q1 revenues [9] Segment Performance - Protein Sciences revenues may rise due to strength in proteomic tools and cell therapy workflows, while Spatial Biology sales are likely to decline due to NIH funding concerns and project timing [10] - The consensus estimate for Spatial Biology revenues is $80.7 million, down 3% from the previous year [14] Challenges in Diagnostics and Spatial Biology - Organic revenues in the Diagnostics and Spatial Biology segment may have declined due to order timing and macro uncertainties affecting growth in the ExoDx prostate cancer test and diagnostic reagents business [12] - The Spatial Biology segment is facing headwinds from NIH funding uncertainty and a weaker biotech funding environment [13] Company Outlook - Bio-Techne has an Earnings ESP of -4.19%, indicating a lower chance of beating estimates [15] - The company currently holds a Zacks Rank of 3 (Hold) [16]

Core Insights - Bio-Techne's GMP reagents, including proteins and small molecules, are essential for its cell therapy offerings, with acquisitions playing a significant role in expanding its portfolio and entering adjacent markets [1] - The company is pursuing clinical diagnostic opportunities with its Ella platform, despite facing macroeconomic challenges that may impact operations [1][10] Financial Performance - Over the past year, Bio-Techne's shares have declined by 38.1%, underperforming the industry’s 15.3% decline, while the S&P 500 composite grew by 13.1% [2] - The company has a market capitalization of $7.63 billion, with earnings surpassing estimates in three of the last four quarters, averaging a surprise of 6.7% [2] Growth Drivers - The Cell and Gene Therapy segment is a major growth area, with the GMP reagents business experiencing high single-digit revenue growth in Q3 of fiscal 2025 and over 500 customers engaged in cell therapy development [3] - The GMP reagents business grew by just over 13% on a trailing 12-month basis, influenced by large, infrequent orders from late-stage clinical trials [3] - In China, the cell and gene therapy solutions are resilient despite funding challenges, with increasing adoption of organoid solutions expected to drive demand for GMP reagents [4] Strategic Initiatives - Bio-Techne has made several strategic acquisitions, including Lunaphore in fiscal 2024 and a 19.9% investment in Wilson Wolf, with plans to acquire the remaining ownership by the end of 2027 [5] - The launch of ProPak GMP Cytokines optimized for the Wilson WolfG-Rex bioreactor and an investment in Spear Bio for ultra-sensitive immunoassays highlight the company's focus on innovation [6] Market Opportunities - The Ella platform has received ISO 13485 certification and is being positioned for clinical diagnostics, with a partnership with Novomol-Dx to launch the BMP kit in India [7][9] - Ella is gaining traction among cell and gene therapy customers for viral titer and release testing, as well as among CROs for its high sensitivity and reproducibility [9] Challenges - The macroeconomic environment is causing increased raw material and labor costs, with a 2.8% rise in cost of sales and a 35.2% increase in selling, general, and administrative expenses year over year [10] - Funding challenges, particularly in China, are leading to extended sales cycles and production-related hazards, compounded by potential NIH funding cuts [11] Earnings Estimates - The Zacks Consensus Estimate for fiscal 2025 earnings has decreased by a cent to $1.88, while revenue estimates are pegged at $1.22 billion, indicating a 5.2% increase from the previous year [12]