QuidelOrtho (NasdaqGS:QDEL) 2025 Conference September 10, 2025 03:10 PM ET Speaker0Go ahead and get started, I'm Katherine Schulte, I cover life sciences and diagnostics here at Baird. Very excited to have Quidel Ortho joining us today. From the company we have the CFO, Joe Buske. So Joe, thanks so much for joining us. I think we're gonna dive right into Q and A so if anyone has a question, feel free to send them to session3rwbear dot com and I will pass them along.So Joe, thought maybe we could just start ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $614 million, a decrease from $637 million in the prior year, primarily due to lower COVID and donor screening revenue [20][27] - Adjusted EBITDA increased by 19% year-over-year to $107 million, with an adjusted EBITDA margin improvement of 330 basis points to 17% [27] - Adjusted diluted EPS was $0.12, compared to a loss of $0.07 in the prior year, representing a growth of 271% [27] Business Line Data and Key Metrics Changes - The labs business grew by 5%, driven by strong performance in clinical chemistry and immunoassay testing [21] - Immunohematology revenue grew by 3%, with notable strength in Latin America and EMEA [22] - Respiratory business revenue decreased by $2 million, primarily due to a 52% decline in COVID sales [23] Market Data and Key Metrics Changes - North America revenue declined by 12% during the quarter, while international markets showed growth, particularly in Latin America (14% growth) and Japan/Asia Pacific (6% growth) [9][10] - China experienced 2% growth in Q2 despite tariff-related shipment holds, with expectations for mid-single-digit growth for the full year [11][12] Company Strategy and Development Direction - The company is focused on expanding its low OUS penetration as a significant growth opportunity [10] - Plans to acquire Lex Diagnostics to enhance its molecular diagnostics capabilities, with expected FDA clearance and market placements in 2026 [16][17] - Continued emphasis on cost structure optimization and operational improvements to drive profitability [12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in mitigating tariff impacts, estimating potential headwinds of $20 million to $25 million for 2025, lower than previous estimates [15] - The company remains committed to delivering on its strategy to drive growth and expand profitability, with a focus on customer service and innovation [18][27] Other Important Information - The company completed its ERP conversion related to the business combination, which is expected to lower integration costs in the second half of the year [26] - The company anticipates annual operating cost savings of approximately $20 million from the consolidation of its New Jersey manufacturing site [26] Q&A Session Summary Question: Can you walk through your respiratory expectations for the remainder of the year? - The company is not changing flu assumptions, but COVID revenue guidance has been lowered due to lower emergency room visits and hospitalizations [35][36] Question: Can you provide insights on the visibility for China growth? - The company has good visibility for mid-single-digit growth in China, with minimal impact from recent pricing and volume actions [39][45] Question: What are the moving pieces affecting EBITDA? - The decrease in COVID revenue is offset by lower tariff impacts and the discontinuation of the Savannah platform, leading to no change in adjusted EBITDA guidance [48][51] Question: How is the company planning for the commercialization of the Lex platform? - No commercial efforts have started yet; the focus is on FDA approval before any marketing activities [92] Question: What is the outlook for free cash flow in the second half? - The company expects to generate more cash in the second half, targeting $140 million to $160 million of free cash flow [77][78]