Financial Data and Key Metrics Changes - The company reported total revenue growth of 5% for the quarter, excluding COVID and donor screening revenue, indicating solid performance above expectations [15][10] - Adjusted Free Cash Flow guidance for the full year is expected to be 25%-30% of Adjusted EBITDA, with a strong Q4 anticipated due to delayed cash receipts from Q3 [10][11] - The leverage ratio at the end of Q3 was 4.4, which is considered too high, with a target range of 2.5-3.5 times expected by early 2027 [72][73] Business Line Data and Key Metrics Changes - The Labs business grew by 4% in Q3, with immunohematology growing at 5% and Triage at 7%, indicating a stable mid-single digit growth trajectory [15][16] - The immunohematology business holds the number one market position globally, achieving 5% growth in Q3, although Q4 growth is expected to be lower due to shipment timing [34][35] - The Point-of-Care business, particularly Triage, is expected to grow at a high single-digit rate, driven by improved cost management and market competitiveness [43][44] Market Data and Key Metrics Changes - The Chinese market is expected to grow at a mid-single digit rate for the full year 2025, with the company feeling optimistic about opportunities despite previous reimbursement issues [29][33] - The company has been less affected by Chinese government actions aimed at cost reduction compared to competitors, primarily due to its focus on routine chemistry [28][31] Company Strategy and Development Direction - The company aims to increase its integrated analyzer base from 30% to around 50%, which is expected to enhance margins by 10-20 basis points annually [22][23] - The exit from the U.S. donor screening market is projected to reduce revenue headwinds from 2-3 points this year to about 1 point next year, with margin accretion expected post-exit [40][41] - The company is focused on continuous improvement in staffing rather than large-scale cuts, aiming for a more stable operational environment [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single digit growth in the Labs and immunohematology segments, with a stable revenue base [68] - The approval of the high-sensitivity troponin assay is seen as a confidence booster for maintaining growth in the Labs business [26] - The company anticipates that the LEX acquisition will likely be dilutive in 2026 but expects to reverse this trend by 2027 [70][69] Other Important Information - The company has achieved $140 million in cost savings since mid-2024, primarily through staffing reductions and indirect procurement initiatives [65] - The company is monitoring the impact of COVID revenue decline, which is expected to decrease by about $100 million year-over-year [44] Q&A Session Summary Question: Feedback from investors post-Q3 earnings - Management noted that the stock reaction was perplexing, attributed to high short interest, put option exposure, tax loss selling, and cash flow timing issues related to ERP conversions [6][10] Question: Cash flow guidance and visibility - The company is tracking towards its cash flow guidance of 25%-30% of Adjusted EBITDA, with expectations for a strong Q4 due to cash collection delays [10][12] Question: Growth drivers in the Labs business - The Labs business is expected to maintain a mid-single digit growth trajectory, supported by consistent win rates and integrated analyzer strategy [16][18] Question: Competitive dynamics in China - The company has been less impacted by reimbursement actions in China and expects mid-single digit growth in the market moving forward [28][29] Question: Margin improvement initiatives - The company is targeting 100-200 basis points of margin improvement in 2026, contingent on continued mid-single digit growth in the base business [66][70]

QuidelOrtho FY Conference Summary Company Overview - **Company**: QuidelOrtho (NasdaqGS: QDEL) - **Industry**: Life Science Diagnostics and Medical Devices Key Points Performance and Financials - QuidelOrtho achieved approximately **1% organic growth** excluding COVID-related revenues, while the industry is experiencing mid-single digit growth [3][4] - The company reported a **19.5% adjusted EBITDA margin** last year, which is expected to increase to **22% this year** due to successful margin improvement initiatives [4] - Cost reductions of about **$140 million** have been realized since mid-2024, contributing to margin improvements [4] Revenue Headwinds - The shutdown of the U.S. donor screening business is expected to create a **2-3 point headwind** on total reported revenue for the year [6] - COVID-related revenues are declining, contributing an additional **2-3 point headwind** [7][10] - Excluding these impacts, the base business is growing at **4-5%**, driven by solid growth in Labs, Immunohematology, and Triage businesses [8][9] China Market Insights - China accounts for about **11% of total revenues**, with a year-to-date growth of **2.5%** expected to reach mid-single digits for the full year [12] - QuidelOrtho has largely avoided the impacts of VBP and DRG due to its use of dry slide technology and focus on routine chemistry [12][13] Pricing Dynamics - Pricing in the legacy Quidel business remains stable, while the legacy Ortho business experiences **1-1.5% pricing pressure** upon contract renewals [15][17] - Continuous improvement programs are in place to offset pricing erosion [17] Product Development and M&A - The decision to discontinue the Savanna product was driven by resource allocation towards the Rheonix product, which is expected to launch with FDA clearance by late 2025 or early 2026 [19][20] - The Rheonix product is anticipated to have competitive advantages in turnaround time and ease of use [21] Cross-Selling Opportunities - The integration of Quidel and Ortho has allowed for successful cross-selling, particularly with the Triage product, which has seen high single-digit growth due to the Ortho sales team [41][42] Future Outlook - For fiscal 2026, QuidelOrtho targets mid-single digit growth, with a **1-point headwind** from the donor screening business [43][45] - The Labs business is expected to maintain mid-single digit growth, while Immunohematology is projected to grow at **3-4%** [46][57] - The company aims for **100-200 basis points** of EBITDA margin improvement in 2026, driven by direct procurement initiatives [72][74] Cash Flow and Tariff Impact - The gross tariff impact for 2025 is estimated at **$20-25 million**, with potential reductions in 2026 depending on U.S.-U.K. tariff negotiations [65][66] - QuidelOrtho aims to achieve **50% free cash flow conversion** of adjusted EBITDA by the second half of 2027 [94][95] Conclusion - QuidelOrtho is navigating through various challenges, including revenue headwinds from donor screening and COVID declines, while focusing on margin improvements and product development. The company is optimistic about future growth and profitability, particularly with the anticipated launch of the Rheonix product and ongoing cost-saving initiatives.

Financial Data and Key Metrics Changes - Total reported revenue for Q3 2025 was $700 million, a 4% decrease from $727 million in the prior year, primarily due to lower COVID and donor screening revenue [13][14] - Adjusted EBITDA was $177 million, with an adjusted EBITDA margin of 25%, reflecting a 180 basis point improvement year-over-year [10][17] - Adjusted diluted EPS was $0.80 for Q3, representing a 36% growth year-to-date [17][24] Business Line Data and Key Metrics Changes - Labs business revenue grew by 4%, driven by solid demand for VITROS, ImmunoAssay, and clinical chemistry platforms [6][9] - Immunohematology business grew by 5%, supported by strong demand from blood banks and hospitals [7] - Point-of-care business, particularly the Triage product line, posted 7% growth, with significant contributions from international markets [8][9] Market Data and Key Metrics Changes - North America revenue decreased by 12% overall, but increased by 5% year-over-year when excluding respiratory revenue and the U.S. donor screening exit [9] - Latin America experienced a 21% overall growth, with labs growing by 22% [9] - Japan, Asia-Pacific, and China each grew approximately 5%, while Europe, Middle East, and Africa grew by 3% [9] Company Strategy and Development Direction - The company is focused on margin improvement initiatives, achieving over $140 million in cost savings, aiming for sustainable mid to high 20s EBITDA margins [5][10] - Continued investment in strategic areas to position for long-term growth, including R&D advancements and new product launches [10][11] - The company is preparing for the anticipated FDA clearance of Lex Diagnostics by late 2025 or early 2026, which is expected to impact future growth [12][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's progress and the path ahead, emphasizing a focus on sustainable, profitable growth [12][24] - The company anticipates a typical respiratory season, with revenue timing consistent with pre-pandemic patterns [21][24] - Management acknowledged challenges from tariff impacts but remains committed to offsetting these in 2025 [11][19] Other Important Information - The company recorded a $701 million goodwill impairment charge in Q3, resulting in no goodwill remaining on the balance sheet [20] - Adjusted recurring cash flow is expected to represent 25-30% of adjusted EBITDA for the full year [19][24] - The company expects full-year 2025 total reported revenue between $2.68 billion and $2.74 billion, with adjusted EBITDA guidance of $585 million to $605 million [21][24] Q&A Session Summary Question: Can you provide more details on competitive wins? - Competitive wins have been evenly distributed across geographies, with significant wins in North America, Latin America, and EMEA, focusing on profitable growth rather than just market share [26][27] Question: What is the growth outlook for China? - The company expects mid-single-digit growth in China, with some impact from BBP and debundling dynamics, but less than competitors due to a high proportion of instruments used in stat labs [30][31] Question: Can you elaborate on the 2025 guidance and margin expectations? - The company narrowed its guidance while maintaining the same midpoint, with expectations for slightly lower margins in Q4 due to higher instrument revenue and incentive compensation [34][35] Question: What is the performance of the Sophia franchise? - The Sophia install base remains stable and expanding, with solid performance expected for the flu combo test in the upcoming respiratory season [43][44] Question: How will Lex Diagnostics impact margins? - Lex is expected to have a diluted impact on margins initially, with a more significant rollout planned for the second half of 2026 [50][51]

Financial Highlights - Total revenue for Q3 2025 was $700 million, a decrease of 5% year-over-year on a constant currency basis[5] - Adjusted EBITDA for Q3 2025 was $177 million, representing a 25% margin[5] - Adjusted diluted EPS for Q3 2025 was $080, a decrease of 6% year-over-year[6] - Year-to-date 2025 total revenue was $201 billion, a decrease of 3% year-over-year on a constant currency basis[11] - Year-to-date 2025 adjusted EBITDA was $444 million, representing a 22% margin[11] - Year-to-date 2025 adjusted diluted EPS was $166, an increase of 36% year-over-year[11] Revenue Breakdown - Recurring revenue accounted for 82% of total revenue in Q3 2025[7] and 84% year-to-date[10] - North America accounted for 57% of revenue in Q3 2025[7] and 58% year-to-date[10] - Labs business unit contributed 51% of revenue in both Q3 2025 and year-to-date 2025[7, 10] Financial Guidance - The company projects full-year 2025 revenues to be between $268 billion and $274 billion[22] - The company anticipates an adjusted EBITDA margin of 22% for full-year 2025[22]