Qiagen (NYSE:QGEN) FY 2025 Conference December 02, 2025 11:15 AM ET Company ParticipantsNone - Company Representative 1Patrick Donnelly - Managing DirectorNone - Company Representative 2Daniel Wendorff - VP of Investor RelationsRoland Sackers - CFOPatrick DonnellyOkay. We can hopefully get started. Thanks for being here. I'm Patrick Donnelly, the Tools and Diagnostics analyst at Citi here. Have a nice day. Happy to continue, including Roland Sackers as CFO. Thank you guys for being here. I guess, Roland, ma ...

Financial Data and Key Metrics Changes - The company reported a strong performance with a growth rate of 7% in Q1 and 6% in Q2, outperforming the industry [2] - A $500 million share buyback was announced to be executed early next year, increasing from previous years' buybacks of $300 million [3] Business Line Data and Key Metrics Changes - The sample prep business showed improvement, with a growth of 3% in Q3 after being slightly negative in Q1 and slightly positive in Q2 [18] - The consumables business, which constitutes 80-85% of sample prep, demonstrated resilience during market volatility [18] - Parse Biosciences is expected to generate $20 million in revenues in 2024 and around $60 million in subsequent years, contributing positively to the overall margin structure [9][25] Market Data and Key Metrics Changes - The liquid biopsy market is growing at over 30%, with the company positioned to support key players in this space [22] - QuantiFERON continues to show double-digit growth, with significant opportunities remaining in the market as 60% is still served by a traditional skin test [27][32] Company Strategy and Development Direction - The company is focused on strategic acquisitions and share buybacks, indicating a balanced approach to capital allocation [3] - The transition to a SaaS model in the bioinformatics segment is ongoing, with expectations of stable low double-digit growth despite the transition [56] - The company aims to improve its EBIT margin to at least 31% by 2028, with ongoing margin improvement strategies in place [66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the upcoming year, despite some volatility in the market, particularly regarding the NIH budget and China [64] - The company is cautious about immediate instrument placements due to budget constraints but remains confident in its overall growth trajectory [62][65] Other Important Information - The company is launching three significant instrumentation products, including the QIAsprint Connect, which is expected to enhance revenue opportunities [19] - The competitive landscape remains stable, with the company maintaining long-term contracts and price increases, indicating confidence in its market position [34][35] Q&A Session Summary Question: Can you elaborate on the CEO transition and its impact? - The board is taking time to find a suitable candidate for the CEO position, with no expected changes in strategy during this transition [6] Question: What attracted the company to Parse Biosciences? - Parse fits well within the sample prep business and is expected to contribute significantly to growth and profitability [9] Question: How is the company addressing the competitive landscape? - The company is confident in its position, having entered long-term contracts and maintained competitive pricing [34][35] Question: What are the expectations for QuantiFERON's growth? - The company anticipates continued double-digit growth, with significant market opportunities remaining [32] Question: How is the company managing its capital allocation? - The company plans to balance share repurchases with potential acquisitions, supported by strong cash flow generation [69]

Qiagen (NYSE:QGEN) FY 2025 Conference December 02, 2025 11:15 AM ET Speaker1Okay. We can hopefully get started. Thanks for being here. I'm Patrick Donnelly, the Tools and Diagnostics analyst at Citi here.Speaker3Have a nice day.Speaker1Happy to continue, including Roland Sackers as CFO. Thank you guys for being here. I guess, Roland, maybe we can start. Q3 was quite eventful for you guys. Not only the results, CEO transition, acquisition, share repurchase. A lot was going on. Maybe just run us through kind ...

Financial Performance - Core sales increased by 6% CER to $532 million, exceeding the outlook of ≥5%[5,9] - Net sales reached $533 million, a 5% CER increase compared to Q3 2024[5,7] - Adjusted diluted EPS was $0.61 CER, a 7% CER increase, surpassing the outlook of ≥$0.58 CER[5] - Adjusted operating income margin remained steady at 29.6%[5,24] - Operating cash flow for 9M 2025 was $466 million, a 3% decrease[5] Product and Portfolio Developments - QIAstat-Dx and QuantiFERON both experienced 11% CER growth, leading the portfolio[5,8] - Sample technologies showed a 3% CER growth[5,8] - QIAcuity digital PCR and QDI delivered solid contributions[5,8] - Parse Biosciences acquisition is expected to contribute ~$40 million in sales in 2026[22] Outlook and Capital Allocation - The company reaffirmed its 2025 net sales outlook of +4-5% CER (+5-6% CER core growth)[5] - The company increased its adjusted diluted EPS outlook to ~$2.38 CER (previously ~$2.35 CER)[5] - At least $1 billion of returns to shareholders is planned for 2024-28 (absent M&A)[14] - $500 million share repurchase program is authorized for completion in January 2026[15]

Summary of Conference Call Company and Industry - The conference call pertains to a company in the life sciences and diagnostics industry, specifically focusing on consumables and bioinformatics solutions. Key Points and Arguments Portfolio Restructuring and Financial Performance - The company has successfully reshaped its portfolio, with 85% of revenues derived from consumables, indicating a resilient consumer base [2][3] - There has been a margin improvement of 330 basis points in operating margin over the last two years, primarily driven by ongoing efficiency measures [3] - The company aims for an EBIT margin target of 31% by 2028, suggesting that this target may be reached earlier than anticipated [4] Cash Flow and Profitability - Cash flow generation remains strong, with expectations for gross margin expansion starting in 2027 due to improved utilization in various areas [5] - The company has maintained a stable cash flow and margin expansion despite a challenging academic and government funding environment [6][10] Market Exposure and Guidance - The company has a relatively low exposure to U.S. NIH budgets (4-5% of total revenue) and academia (6-7%), with 85-90% of this exposure being consumables [7][8] - Guidance for the second quarter indicates a 5% growth, following a 7% actual delivery in the first quarter [6] Strengths in Bioinformatics and Pharma - The bioinformatics segment (QDI) is performing well, particularly in the clinical side, which is growing faster than the discovery side [13] - The company is transitioning from licensing agreements to SaaS contracts, which may temporarily impact growth but is expected to yield long-term benefits [14] Strategic Acquisitions - The acquisition of Genox enhances the company's ability to analyze sequencing data, particularly for small to medium-sized customers [16][17] - The company is focused on finding opportunities that deliver revenue growth with a clear path to profitability [20][21] Instrumentation and Market Opportunities - The company is launching new instrumentation platforms, which are expected to drive both instrumentation revenues and consumable pull-through [66][67] - The introduction of digital PCR solutions is seen as a cost-effective alternative to sequencing, potentially accelerating growth in the biopharma sector [25][26] Competitive Landscape and Pricing - The company maintains stable pricing in digital PCR, with no discounts offered, contrasting with aggressive pricing strategies from competitors [32] - The market for QuantiFERON tests is expected to grow, with the company holding a significant market share and facing competition from new entrants like Roche [42][44] Long-term Growth Targets - The company has set a long-term target of $250 million by 2028, with the majority of growth expected to come from life sciences rather than clinical applications [35][36] - The company anticipates a return to double-digit growth rates in instrumentation as visibility on academic spending improves [36] M&A Strategy - The company has a detailed capital allocation policy, focusing on R&D investments and potential acquisitions to enhance value [73][74] - Share buybacks are also part of the strategy, with plans to increase the buyback program to $500 million [75] Margin Expansion - The company expects continued gross margin expansion driven by operational leverage and improved utilization of production equipment [76][77] - Current gross margins are in the 70s when excluding new instruments, indicating potential for further improvement as utilization increases [78] Other Important Content - The company is technology agnostic, willing to work with various platforms for clinical applications, which may lead to more partnerships in the future [28][29] - The company is actively pursuing opportunities in oncology and other therapeutic areas, with a focus on companion diagnostics [40][41] - The market for TB diagnostics presents a significant opportunity, with a current market size of $1.5 to $1.7 billion, indicating room for growth [61]