QuidelOrtho (US:QDEL)2025-12-02 16:02QuidelOrtho 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.