Repligen(RGEN) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of approximately $168 million and full year revenue of$ 634 million, achieving the midpoint of guidance despite a $3.5 million exchange rate headwind in the quarter [50][52] - Fourth quarter non-COVID revenue growth was up 13%, while full year 2024 revenue was flat and up 3% on a non-COVID basis [50][51] - Adjusted gross margin for Q4 was 50.7%, down 1.8 percentage points year-over-year, but higher than the implied guidance in November [56][57] Business Line Data and Key Metrics Changes - The CDMO business saw sales and orders increase significantly, with sales up more than 40% and orders up more than 11% in Q4 [87] - Equipment sales and orders were up more than 30% sequentially and more than 10% year-over-year in Q4 [30][31] - Filtration revenues were up 30% year-over-year in Q4, with orders also reaching record levels [32][34] Market Data and Key Metrics Changes - North America represented approximately 50% of total full year revenue, with a 12% revenue growth, while Asia (excluding China) also grew by 12% [52][53] - China was a$ 25 million headwind for the year, representing about 3% of total revenue, down from 7% in 2023 [54] - Orders from CDMOs were the highest since Q1 of 2022, excluding COVID, with a significant recovery noted in the second half of 2024 [27][41] Company Strategy and Development Direction - The company aims to accelerate and maintain above-market growth by improving customer experience and focusing on key accounts and Asia [44] - Increased investment in R&D is planned, particularly for new product launches and single-use mixers [45] - The company is also focused on acquiring one to two businesses to strengthen its position in new modalities and PAT [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the bioprocessing market returning to growth in 2025, with a strong order intake and improved market conditions [9][10] - The company expects revenue growth in 2025 to be in the range of $685 million to$ 710 million, representing an 8% to 12% increase on a reported basis [43][71] - Management highlighted that the order intake has increased every quarter in 2024, indicating a sustainable return to growth [100][102] Other Important Information - The company successfully integrated Metenova and plans to launch new single-use mixer technologies in Q2 of 2025 [18][19] - Adjusted net income for the fourth quarter was $25 million, with a full year adjusted net income of$ 89 million, down about 5% from 2023 [66][68] - The company generated $178 million of cash flow from operations for the full year, 56% more than in 2023 [69] Q&A Session Summary Question: How have things evolved regarding CDMOs and capital equipment? - Management confirmed significant improvements in both CDMO and capital equipment, with sales and orders increasing substantially in Q4 [87][88] Question: Can you provide details on ATF revenue and its impact on guidance? - The filtration business generated about$ 373 million in 2024, with ATF being a significant contributor, and management expects continued growth from this segment [93][94] Question: How sustainable are the order trends observed? - Management noted that order intake has increased every quarter in 2024, with a strong portfolio of differentiated products supporting this growth [100][102] Question: What visibility exists for protein growth in 2025? - Management acknowledged 2024 as a reset year for protein but expressed confidence in returning to double-digit growth with new product launches planned [110][111] Question: What end market assumptions are incorporated in the fiscal '25 guidance? - Management indicated that they expect a return to historical growth patterns, with stronger performance in the second half of 2025 compared to the first half [124]