Core Viewpoint - Bio-Techne Corporation (TECH) is expected to release its second-quarter fiscal 2026 results on February 4, with adjusted earnings per share (EPS) anticipated at 43 cents, reflecting a 2.4% increase from the previous year, while revenues are projected at $292 million, indicating a 1.7% decrease year-over-year [1][2]. Group 1: Earnings Performance - In the last reported quarter, Bio-Techne posted adjusted EPS of 42 cents, matching the Zacks Consensus Estimate, with the company beating earnings in three of the last four quarters and matching once, averaging a surprise of 6.58% [1]. - Estimates for earnings have remained constant at 43 cents over the past 30 days, indicating stability in expectations leading up to the announcement [3]. Group 2: Revenue Estimates - The Zacks Consensus Estimate for revenues is set at $292 million, which represents a decrease of 1.7% from the year-ago figure [2]. - The consensus estimate for the Spatial Biology segment's revenues is pegged at $81.6 million, down 3% from the previous year [15]. Group 3: Factors Influencing Performance - Ongoing macro uncertainties, including tariffs and potential NIH budget cuts, may add to customer uncertainty and temporarily slow growth momentum in the second quarter of fiscal 2026 [4]. - The timing related to cell therapy programs negatively impacted sales in the previous quarter, and this trend is expected to continue [5]. - The core portfolio of research-use-only proteomic agents, featuring over 6,000 proteins and 400,000 antibody types, is likely to support global customers in advancing therapeutics for precision diagnostics [6]. Group 4: Segment Developments - The protein analytical instrumentation business is expected to maintain strong momentum, with the ProteinSimple solution resuming double-digit growth [7]. - Demand for the next-generation high-throughput instrument, Leo, appears to be strong, contributing positively to quarterly results [8]. - Major developments include a licensing agreement with Monod Bio for exclusive rights to a subset of AI-designed bispecific binding proteins and a strategic distribution partnership with Sphere Bio for ultrasensitive immunoassays targeting Alzheimer's biomarkers [10]. Group 5: Challenges and Growth Areas - The Spatial Biology segment may face revenue declines due to the divestiture of the Exosome Diagnostics business, despite growth in the RNAscope product suite [12]. - The segment is likely to encounter headwinds from NIH funding uncertainties and a weaker biotech funding environment [13]. - The company has launched several new products and partnerships aimed at enhancing its offerings in spatial biology and diagnostics, which may contribute to top-line performance [14].

Bio-Techne FY Conference Summary Company Overview - **Company Name**: Bio-Techne (NasdaqGS: TECH) - **Headquarters**: Minneapolis - **Employee Count**: 3,100 across 34 global locations - **Revenue**: $1.2 billion in 2025 - **Segments**: - Protein Sciences (73% of revenue) - Diagnostics and Spatial Biology (27% of revenue) [3][4] Core Business Insights - **Product Portfolio**: - 6,000 proteins and 400,000 antibodies - Focus on consumables (81% of revenue), instruments (9%), services (7%), and royalties (2%) [4] - **Revenue Breakdown**: - 41% from core reagents - 12% from diagnostic controls - 51% from biopharma, 20% from academia, 16% from diagnostics, 13% from distributors [5][6] Market Position and Strategy - **Total Addressable Market (TAM)**: $27 billion with significant growth potential [18][22] - **Growth Factors**: - Discovery of biological insights - Development of advanced therapeutics - Enablement of precision diagnostics [9][10] - **Key Applications**: - Cell therapies (7% of revenue) - Proteomic applications in drug development - Spatial interrogation [10][13] Financial Performance - **Revenue Growth**: 10% CAGR over the last five years despite market headwinds [19] - **Organic Revenue Growth**: 5% in fiscal 2025 [20] - **Profitability**: Targeting 35%-40% operating margins [23] Industry Trends - **Biotech Industry**: Experienced a decline in Q1 but showed signs of recovery with a 90% increase in funding in Q4 [24][25] - **Academic Sector**: Stabilizing with a shift in research focus from infectious diseases to chronic diseases [25][26] - **China Market**: Contributing 8% of revenue, showing potential for growth due to favorable government policies and funding [28][29] Cell Therapy Insights - **Growth in Cell Therapy**: Revenue reached $80 million, with $60 million from GMP proteins [30] - **Fast-Track Designation**: Two major customers received fast-track designation, potentially leading to significant future revenue [30][31] - **Clinical Trials**: 57% increase in cell therapy trials year-over-year [32] Diagnostics and Spatial Biology - **Market Size**: $5 billion for spatial biology, with 75% in translational and clinical markets [35] - **Innovations**: Introduction of RNAscope for RNA detection and COMET for multi-omic analysis [36][37] Future Outlook - **Growth Projections**: Anticipating low single-digit growth for fiscal 2026 due to current market conditions [41] - **Innovation Focus**: Continued investment in R&D (8% of revenues) and new product launches, including AI-designed proteins and ultra-sensitive immunoassays [38][39] - **M&A Strategy**: Plans to pursue acquisitions to enhance cell therapy and proteomic analytical capabilities [42] Conclusion - Bio-Techne is positioned for sustained growth through its differentiated product portfolio, strategic market focus, and commitment to innovation, despite facing short-term challenges in the biotech and academic sectors. The company aims to leverage its strengths to navigate market fluctuations and capitalize on emerging opportunities.

Financial Data and Key Metrics Changes - The company ended Q1 with a negative growth of 1%, but when excluding two large cell therapy customers, the growth for the rest of the business was approximately 1% [6][8] - The company anticipates a similar overall growth rate for Q2, projecting a negative growth of 1% again, but with an adjusted growth of 3% when excluding the impact of the two customers [25][96] Business Line Data and Key Metrics Changes - The diagnostics business grew mid-single digits in Q1, building on a mid-teen growth from the previous year, indicating strong performance despite market challenges [30] - The ProteinSimple franchise has consistently outperformed, with no down quarters and double-digit growth in many recent quarters, indicating its resilience in a tough market [26][68] - The Spatial Biology segment saw flat revenue in Q1, but bookings increased double-digit, suggesting a positive trend moving forward [27][74] Market Data and Key Metrics Changes - The pharmaceutical market, which constitutes 30% of the company's revenue, has shown recovery with double-digit growth in recent quarters, alleviating previous concerns about regulatory impacts [11][12] - Academic market performance has improved, with expectations of a flat NIH budget, leading to reduced anxiety among academic customers [13][66] - Biotech funding has improved from a decline of 30% to a decline of 13%, indicating a potential stabilization in the biotech market [16][22] Company Strategy and Development Direction - The company is focusing on its ProteinSimple and Spatial Biology franchises to drive growth, especially as the market stabilizes [26][29] - The company is optimistic about the long-term potential of its cell therapy business, despite short-term challenges due to the two large customers [90][94] - The company is leveraging its strong customer relationships and grant programs to maintain interest in cell therapy, indicating a strategic focus on early-stage development support [92] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the near-term outlook, noting that while challenges remain, there are signs of stabilization in key markets [11][13] - The company expects to see improvements in the biotech market, but anticipates that significant revenue contributions from this sector may not materialize until fiscal year 2027 [22][57] - Management highlighted the importance of upcoming FDA approvals and commercialization timelines for the two large customers, which could significantly impact future revenue [49][50] Other Important Information - The company has a diverse customer base, with 700 customers, and is actively seeking to expand its market presence despite current challenges [91] - The company is experiencing a high level of interest in its instruments, indicating potential for future growth as capital expenditures begin to recover [71] Q&A Session Summary Question: What is the impact of the two large customers on the business? - The two large customers accounted for 35%-40% of GMP revenue at their peak, and their absence is expected to impact revenue for the remainder of the fiscal year [41][52] Question: How does the company view the future of the cell therapy market? - Management believes the quality of new clinical trials is improving, and despite current funding challenges, interest in cell therapy remains high [90][92] Question: What are the expectations for the diagnostics business moving forward? - The diagnostics business is expected to continue performing well, with a more even revenue distribution anticipated throughout the year [30][31]

Financial Data and Key Metrics Changes - The company ended Q1 with a -1% growth, primarily impacted by two large cell therapy customers who did not purchase materials, contributing approximately 200 basis points of headwind [6][8] - Adjusted for these customers, the growth rate for the rest of the company was +1% [25] - The company anticipates a similar overall growth rate for Q2, projecting a decline of -1% but an improvement to +3% when excluding the impact of the two customers [25][26] Business Line Data and Key Metrics Changes - The diagnostics business grew mid-single digits in Q1, building on a mid-teen growth from the previous year, indicating a strong performance despite lumpiness in customer purchasing patterns [30] - The ProteinSimple franchise has consistently outperformed, with no down quarters and double-digit growth in most recent quarters, indicating strong demand for its consumables [26][68] - The Spatial Biology segment experienced a flat performance in Q1 after a down quarter in Q4, but bookings increased double-digit, suggesting a recovery in interest [27][75] Market Data and Key Metrics Changes - The Pharma market, which constitutes 30% of the company's revenue, has shown resilience with double-digit growth returning after a brief slowdown due to regulatory concerns [12][61] - Academic market funding has stabilized, with NIH budget expectations now flat, improving customer sentiment and reducing anxiety [13][66] - Biotech funding has improved from a -30% decline to -13%, indicating a potential recovery in spending [16][22] Company Strategy and Development Direction - The company is focusing on its ProteinSimple and Spatial Biology franchises to drive growth in a stabilizing market, leveraging historical performance to navigate current challenges [26][29] - The company is optimistic about the long-term potential of its cell therapy business, despite short-term headwinds from key customers [89][92] - The strategy includes maintaining strong relationships with existing customers while exploring new opportunities in the biotech space [54][94] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the near-term outlook, noting that while challenges remain, there are signs of stabilization in key markets [11][13] - The company expects to see a gradual recovery in the biotech sector, with funding translating into spending over the next few quarters [57] - Management highlighted the importance of upcoming FDA approvals and commercialization timelines for key customers, which could significantly impact future revenue [49][50] Other Important Information - The company has seen a significant increase in its customer base, growing from 550 to 700 customers, indicating strong interest in its products [92] - The company is actively engaging in grant programs to support early-stage cell therapy developments, which could lead to long-term customer loyalty [93] Q&A Session Summary Question: What is the impact of the two large customers on the business? - The two customers accounted for 35%-40% of GMP revenue at their peak, and their absence will significantly impact revenue for the remainder of the year [41][52] Question: What is the expected timeline for commercialization of the therapies from these customers? - Management anticipates a timeline of 18 months to three years for commercialization following phase III results, with a base case of fiscal year 2028 for potential revenue [49][50] Question: How does the company view the current state of the cell therapy market? - Management believes the quality of new clinical trials is improving despite a slowdown in the rate of growth, indicating a healthy future for the sector [92]

Financial Data and Key Metrics Changes - The company ended Q1 with a negative growth of 1%, but excluding two large cell therapy customers, the growth for the rest of the business was approximately 1% [6][8] - The company anticipates a similar overall growth rate for Q2, projecting a decline of about 1% but an improvement to 3% when excluding the impact of the two customers [25][30] Business Line Data and Key Metrics Changes - The diagnostics business grew mid-single digits in Q1, building on a mid-teen growth from the previous year, indicating a strong performance despite fluctuations [30] - The ProteinSimple franchise has consistently outperformed, with no down quarters and double-digit growth in recent periods, suggesting resilience in a challenging market [26][70] - The Spatial Biology segment experienced a flat performance in Q1 after a down quarter, but bookings increased double-digit, indicating potential for recovery [27][75] Market Data and Key Metrics Changes - The pharmaceutical market, which constitutes 30% of revenue, has shown recovery with double-digit growth in recent quarters, alleviating previous concerns about regulatory pressures [12][13] - Academic market conditions have stabilized, with expectations of a flat NIH budget, improving sentiment among academic customers [14][66] - Biotech funding has improved, with funding levels increasing from a decline of 30% to a decline of 13%, suggesting a potential recovery in spending [17][22] Company Strategy and Development Direction - The company is focusing on its ProteinSimple and Spatial franchises to drive growth, especially as market conditions stabilize [26][75] - The strategy includes leveraging the strong demand for consumables and reagents associated with their instruments, which are expected to enhance margins over time [77][80] - The company is optimistic about the long-term potential of its cell therapy business, despite short-term challenges, due to the high quality of clinical trials being conducted [92][94] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the near-term outlook, noting that while challenges remain, there are signs of stabilization in key markets [12][14] - The company anticipates that improvements in funding and market conditions will begin to reflect in financial results by the second half of fiscal year 2026 [22][58] - Management highlighted the importance of maintaining strong relationships with customers and adapting to their needs as market conditions evolve [43][59] Other Important Information - The two large customers in the cell therapy space accounted for as much as 35%-40% of GMP revenue at their peak, but their absence is expected to impact revenue significantly in the near term [41][90] - The company has a diverse customer base, with 698 other customers, and is actively seeking to expand its reach in the cell therapy market through grant programs [94][96] Q&A Session Summary Question: What is the impact of the two large customers on revenue? - The two customers have significantly influenced revenue, making up a large portion of GMP revenue, and their absence is expected to reduce business temporarily [41][90] Question: How does the company view the recovery in the biotech market? - The company sees a lag of 2-3 quarters before funding translates into spending, but is optimistic about a recovery in fiscal year 2027 [58] Question: What are the expectations for the diagnostics business? - The diagnostics business is expected to continue performing well, with a more even revenue stream anticipated throughout the year [30][31] Question: How is the company addressing margin progression? - Management expects margin expansion to be consistent with revenue growth, projecting at least a 100 basis point improvement for the year [97]