Financial Data and Key Metrics Changes - The company generated revenue of $699 million in Q3 2025, resulting in 1% organic growth, with foreign exchange (FX) providing a modest 1% tailwind [24][25] - Adjusted operating margins were 26.1%, down 220 basis points year-over-year but slightly above expectations [25] - Adjusted earnings per share (EPS) for the quarter was $1.18, which was $0.05 above the midpoint of guidance [8][26] - Free cash flow for the quarter was $120 million, representing approximately 90% of adjusted net income [9][26] Business Line Data and Key Metrics Changes - The Signals software business grew 20% organically in the quarter, with annual recurring revenue (ARR) over 40% and a net retention rate of more than 110% [7][30] - The reproductive health business grew in the mid-single digits year-over-year, with newborn screening growing in the high single digits [7][31] - The diagnostics segment generated $356 million in revenue, up 3% on a reported basis and 2% on an organic basis, with immunodiagnostics declining in the low single digits [30] Market Data and Key Metrics Changes - The Americas grew in the low single digits, Europe in the mid-single digits, while Asia declined in the mid-single digits, with China experiencing a low teens decline [29] - Sales to pharma and biotech customers were up low single digits, while sales to academic and government customers declined in the low single digits [29] Company Strategy and Development Direction - The company is focused on disciplined capital deployment, with a new $1 billion share repurchase authorization to replace the existing program [10] - There is an emphasis on AI-driven solutions, with several new AI-focused software offerings launched in the past year [12][13] - The company is optimistic about future performance, anticipating organic growth of 2%-4% for the year and a baseline adjusted operating margin of 28% for 2026 [11][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving customer confidence and demand trends, particularly in the pharma and biotech sectors [6][10] - The company is cautious about assumptions until there are sustained improvements in broader industry demand trends [10][11] - Management reiterated the importance of maintaining a strong focus on cash flow generation and capital deployment priorities [9][10] Other Important Information - The company reported a 6% reduction in Scope 1 and 2 emissions in 2024 and achieved a 77% employee satisfaction rate [19] - The company received a AAA rating from MSCI, the highest possible rating, reflecting its commitment to sustainability [20] Q&A Session Summary Question: Commentary on 2026 growth expectations - Management indicated a prudent assumption of 2%-3% organic growth for 2026, with signs of increasing activity in the instrument side and confidence in diagnostics performance outside of China [36][37] Question: Insights on life sciences business performance - The life sciences solutions business was in line with expectations, with reagents performing slightly below expectations due to lighter summer months [39][40] Question: Details on customer activity levels - Management noted that increasing customer activity is primarily seen in the pharma biotech sector, particularly in instruments, rather than academia and government [44] Question: Expectations for software business growth - The software business is expected to face challenging comps in 2026, with organic growth anticipated in the mid-single digits, but strong performance metrics such as ARR and net retention rate remain positive [58][60] Question: Insights on China diagnostics - Management confirmed that China diagnostics is expected to continue facing headwinds, with a projected decline of 20%-25% year-over-year due to changes in reimbursement [73][74]

Financial Data and Key Metrics Changes - The company reported 3% organic growth in Q2, with life sciences slightly above that in the mid-single-digit range and diagnostics in the low single-digit range [4][5] - The guidance for the full year has been adjusted down to 2% to 4% organic growth, a decrease of 100 basis points primarily due to the impact of China diagnostics [44][70] - The company expects a significant sequential increase in Q4, projecting mid-single-digit growth driven by diagnostics, particularly from the OMICS contract with Genomics England [47][49] Business Line Data and Key Metrics Changes - The life sciences segment saw mid-single-digit growth, largely attributed to the Signals business, which grew over 30% [12][14] - The reagents business has shown consistent sequential growth for six straight quarters, with demand primarily driven by pharma [25][26] - The diagnostics business in China faced a 15% decline in Q2, with expectations of a mid-20% decline in the second half due to changes in reimbursement policies [7][8] Market Data and Key Metrics Changes - The company’s exposure to the China diagnostics market is about 9% of total revenue, with overall China contributing 15% to 16% of revenue [8][9] - The U.S. market for the company’s A&G segment is approximately 5% of the revenue base, with expectations of a similar market environment in the second half of the year [19][21] - The company anticipates continued growth in the life sciences sector in China, with mid-single-digit growth expected for the second half [23][24] Company Strategy and Development Direction - The company is focusing on expanding its software offerings and transitioning to a SaaS model, with a strong emphasis on customer retention and growth in annualized portfolio value [15][17] - The strategy includes increasing automation in the U.S. market to enhance competitiveness, particularly in the ImmunoDX business [37][38] - The company aims to leverage its competitive advantages in customer service and product quality to capture market share from competitors [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed cautiousness regarding the operating environment, particularly in the pharma sector, due to uncertainty in policies affecting investment planning [18][26] - The company remains optimistic about its margin expansion potential, projecting a baseline operating margin of 28% for 2026 despite current low single-digit growth expectations [55][57] - Management highlighted the importance of clarity in regulatory policies to drive growth and investment in the coming years [26][66] Other Important Information - The company has achieved a free cash flow conversion rate of 90% in the first half of the year, with expectations to maintain this trend moving forward [66][68] - Share buybacks have increased significantly, with the company planning to continue repurchasing shares at favorable prices [69][70] Q&A Session Summary Question: What is the outlook for organic growth in 2026? - Management indicated that while the market is expected to remain flat to slightly up, they anticipate growing a couple of hundred basis points above that, aiming for low single-digit growth [62][64] Question: How is the company addressing tariff impacts? - The company has operationally mitigated some tariff impacts, particularly from China, but expects to absorb some net costs moving forward [9][61] Question: What are the key competitive advantages in the reagents business? - Management believes their customer service, product quality, and market approach provide significant competitive advantages over peers [29][30]