Doug Schenkel

Doug Schenkel inquired about the breakdown of Signatera volume and mix between exome, genome, and Latitude in Q4 2025, and the expected mix for 2026, along with its implications for gross margin. He also asked if colorectal cancer (CRC) volume is expected to dip below 50% of total Signatera and Latitude volume as breast and lung indications accelerate.

Answer

Steve Chapman (CEO, Natera) stated that the vast majority of volume is exome, with some interest in genome from certain physicians and academic centers. Latitude is primarily for cases where tissue is unavailable (approximately 5% of CRC) and for physicians preferring tumor-naive testing, representing a new growth opportunity. He expects CRC volume to normalize over time to reflect cancer prevalence, with other tumor types accelerating due to years of data generation.

Doug Schenkel asked about the Signatera volume and mix breakdown (Exome, Genome, and Latitude) in Q4 2025, the expected mix in 2026, and its implications for gross margin. He also inquired if colorectal cancer (CRC) volume is expected to dip below 50% of total Signatera and Latitude volume as other indications accelerate.

Answer

Steve Chapman (CEO, Natera) stated that while CRC is still a significant portion of volume and growing, other tumor types are accelerating, and he expects CRC's share to normalize over time to reflect cancer prevalence, with breast cancer eventually becoming the largest. He noted that the vast majority of current volume is Exome, with some interest in Genome. Latitude is primarily for CRC cases where tissue is unavailable (around 5%) and for physicians preferring tumor-naive testing, representing a new growth opportunity.

Doug Schenkel asked about the significance of the PRECEDE-CRC advanced adenoma sensitivity and specificity performance in Natera's decision to increase investment in the early cancer detection program, comparing it to standards used for NIPT and MRD. He also inquired about the expected 2026 investment and the minimum viable performance for commercialization.

Answer

CEO Steve Chapman confirmed that the PRECEDE study's performance was crucial for the decision to go "full steam ahead" with the FDA-enabling FIND study, noting that initial stages were started based on earlier pilot data. He indicated that 2026 investment would be directionally similar to 2025's spending and reiterated the need for "really strong performance" to make the product worthwhile, keeping competitor performance in mind.

Doug Schenkel asked about the adverse impact of new patient exome costs on gross margin, the potential to raise guidance on incremental Signatera volume growth, and the rationale for holding operating spend flat despite strong revenue performance.

Answer

CFO Mike Brophy explained that without the influx of new patients, gross margin would have seen steady sequential improvement. He suggested analysts could modestly increase volume expectations but should anticipate quarterly fluctuations. Regarding OpEx, management's prepared remarks indicated they are holding the guide flat to gain operating leverage from prior investments, while remaining opportunistic to fund high-return projects.

Doug Schenkel asked about the meaningful increase in APAC revenue (especially Asia ex-China) in Q4, its drivers, and expected continuation into 2026. He also inquired about MockV demand trends, its expected contribution in 2026, and its potential to drive Cygnus growth above mid-single digits long-term.

Answer

CFO Rajesh Asarpota attributed APAC growth to two large, sustainable GMP orders. He and CSO Chanfeng Zhao highlighted MockV's strong runway, positive regulatory feedback, and potential to replace viral clearance studies. CEO Bernd Brust noted MockV's long-term potential for Cygnus growth, alongside analytical services investments.

Doug Schenkel asked about the meaningful increase in APAC revenue in Q4 (especially Asia ex China), its drivers, and expected continuation into 2026. He also inquired about Mach V demand trends, its expected contribution in 2026, and its potential to drive overall Cygnus growth above mid-single digits long-term.

Answer

Rajesh Asarpota (CFO) attributed Q4 APAC growth to two large GMP orders tied to ongoing programs, viewing it as sustainable. He noted strong Mach V growth from 2024 to 2025 and continued growth expectations. Chanfeng Zhao (CSO) added that positive regulatory feedback on Mach V data in clinical trial applications could broaden the customer base. Bernd Brust (CEO) sees long-term potential for Mach V and new services (mass spec) to drive Cygnus growth.

Doug Schenkel from Wolfe Research asked about month-by-month capital equipment demand trends since November, distinguishing between seasonality and policy-related uncertainty, and probed Agilent's M&A environment and appetite for multi-billion dollar deals.

Answer

President and CEO Padraig McDonnell noted steady CapEx conditions, improving MFN deals, and strong GLP-1 growth. CFO Adam Elinoff reiterated capital allocation priorities, emphasizing organic growth and a high bar for transformative M&A, stating no need for such deals to meet growth ambitions.

Doug Schenkel asked for a month-by-month description of capital equipment demand from November through the beginning of the calendar year, seeking to understand if recent slowing demand observed by peers was normal seasonality or due to environmental factors like policy uncertainty. He also inquired about the M&A environment, Agilent's readiness, and appetite for a multi-billion dollar deal.

Answer

President and CEO Padraig McDonnell described capital equipment demand as "very steady," with funnels growing, driven by improving CapEx conditions, reduced tariff uncertainty, strong GLP-1 growth, and CDMO performance. He noted a "reasonable budget flush" in December and some intra-quarter disruption in January. CFO Adam S. Elinoff outlined Agilent's capital allocation priorities: internal innovation, M&A, and strategic capacity expansion, while returning excess capital to shareholders. He emphasized that Agilent likes its organic business and does not need transformative deals, setting a high bar for multi-billion dollar transactions based on alignment with enterprise pillars, right to win, integration capability, and financial returns.

Doug Schenkel inquired about the size of the GLP-1 business, its split between LC and services, Agilent's positioning with generics in various geographies, and the growth outlook for 2026. He also asked about the academic and government end market's 10% decline, seeking reasons given seasonality and funding certainty, and the impact of any government shutdown.

Answer

President and CEO Padraig McDonnell detailed that Agilent's GLP-1 benefit comes from its CDMO business (BioVectra) and analytical tools. Q4 GLP-1 revenue was about $40 million (60% BioVectra, 40% analytical), with FY2025 revenue around $130 million, evenly split. He highlighted strong growth in the analytical lab and investments in India. For A&G, McDonnell attributed the 10% decline to U.S. federal spending reductions, particularly impacting instruments, and noted no material impact from a government shutdown, expecting continued softness in FY2026.

Doug Schenkel asked for details on the GLP-1 business, including its size, the split between LC and services, Agilent's positioning with generics in various geographies, and the growth outlook for 2026. He also inquired about the academic and government end market's Q4 decline, considering seasonality and funding certainty, and any impact from a government shutdown.

Answer

President and CEO Padraig McDonnell explained that Agilent's GLP-1 benefit comes from its CDMO business (BIOVECTRA) and analytical tools (LCMS, Altura columns). He reported Q4 GLP-1 revenue of $40 million (60% BIOVECTRA, 40% analytical lab, with 20% growth in analytical lab), and FY2025 GLP-1 revenue of $130 million, split evenly. He noted a long runway into 2026 and strategic investments in India for patent lift. For academia and government, Mr. McDonnell stated a 10% decline in Q4, primarily due to U.S. federal spending reductions impacting instrument sales, with no material impact from a government shutdown, and expects continued softness in FY2026.

Doug Schenkel of Wolfe Research inquired about the company's guidance philosophy, balancing strong momentum with setting achievable targets, and asked about capital deployment plans, including M&A readiness.

Answer

CEO Padraig McDonnell affirmed 'very good visibility' for the year-end guidance and a commitment to clear, achievable targets. On capital deployment, he stated that organizational readiness for M&A is 'extremely high' due to the Ignite operating model and that M&A will be a more meaningful focus, guided by a disciplined, strategy-aligned approach.

Doug Schenkel of Wolfe Research inquired about the company's guidance philosophy, specifically how it balances strong current momentum with the goal of setting achievable targets. He also asked about the capital deployment strategy, focusing on M&A readiness and potential buybacks.

Answer

President and CEO Padraig McDonnell emphasized that the Q4 guidance is based on very good visibility from the order book and is considered clear and achievable, though it's too early for a 2026 guide. On capital deployment, he stated that M&A is expected to be a more meaningful part of the strategy, guided by a disciplined approach aligned with strategic pillars. He noted the company's organizational readiness for deals is "extremely high" thanks to the execution capabilities developed through the Ignite program.

Doug Schenkel questioned the full-year guidance, noting the math implies a significant second-half recovery, and asked if this relies on market improvement or just easier comps. He also asked about the company's current thinking on capital deployment.

Answer

CFO Robert McMahon confirmed the math is correct and that the expected second-half growth is largely a function of easier year-over-year comparisons, suggesting a 2-year stack view shows a smoother trend. CEO Michael McMullen added that market 'stabilization' is the key factor. On capital deployment, McMullen stated Agilent remains interested in a balanced approach, including M&A, and noted the deal pipeline is more robust than it has been in years.

Doug Schenkel asked about the 200 basis point step-up in gross margin during Q4, specifically how much of this improvement was directly attributable to the v2 transcriptome. He also sought clarification on whether the Q1 adjusted EBITDA margin is expected to be lower than the annual target guidance or sequentially down from Q4. Additionally, he inquired about the current percentage of Decipher volume attributed to bladder cancer, its expected trend, and the potential for increased use in earlier stages or neoadjuvant chemo decision-making, given impressive ASCO GU data.

Answer

CFO Rebecca Chambers confirmed that Q1 adjusted EBITDA margin is expected to be below the annual guide and lower sequentially due to the removal of prior period collections and typical start-of-year costs. She explained that Q4 gross margin improvement was driven by both the v2 transcriptome's cost benefit and prior period collections, with the no-result rate benefit from v2 being the larger impact. CEO Marc Stapley stated that bladder cancer currently represents a very small portion of total Decipher volume, emphasizing the need for more clinical evidence, like that presented at ASCO GU, to drive clinical utility in settings such as neoadjuvant therapy. Chief Scientific Officer Phil Febbo elaborated that ASCO GU abstracts demonstrate how understanding bladder cancer subtypes is increasingly informing care, maximizing neoadjuvant therapy response, and supporting bladder-sparing approaches, with Decipher Bladder pairing well with MIBC MRD.

Doug Schenkel asked about the direct contribution of the v2 transcriptome to the 200 basis point gross margin step-up in Q4, and clarified expectations for Q1 adjusted EBITDA margin. He also inquired about Decipher Bladder's current percentage of total Decipher volume, its expected trend, and its potential for increased use in earlier stage or neoadjuvant chemo decision-making workflows.

Answer

CFO Rebecca Chambers clarified that Q1 adjusted EBITDA margin is expected to be lower sequentially and below the annual guidance due to typical seasonality and prior period collections. She attributed the Q4 gross margin increase to both v2 transcriptome cost benefits and PPCs, with the no-result rate benefit being the larger impact. CEO Marc Stapley and Chief Scientific Officer and Chief Medical Officer Phillip Febbo stated Decipher Bladder is currently a small portion of total Decipher volume but has strong growth potential, driven by emerging evidence (like ASCO GU data) supporting its use in neoadjuvant settings and bladder-sparing approaches.

Doug Schenkel at Wolfe Research inquired about the weak correlation between multimodal AI scores (DPAI) and Decipher, asking how clinicians manage discordant results and if this poses a concern or an advantage for Decipher. He also asked about Veracyte's internal digital pathology efforts and the timeline for these initiatives, and later, how Veracyte plans to balance its ahead-of-schedule margin targets with opportunistic investments to drive future growth.

Answer

CEO Marc Stapley emphasized the importance of developing robust clinical evidence for new technologies like DPAI, noting that in cases of discordance, clinicians typically rely on the gold standard, Decipher, to avoid undertreatment. Chief Commercial Officer John Leite added that significant discordance makes complementarity difficult to define, and physicians lean on Decipher's established evidence. Chief Medical and Scientific Officer Phil Febbo detailed Veracyte's comprehensive data set for integrating transcriptome and DPAI insights, focusing on molecular features like PORTOS and PTEN for predictive therapeutic benefit. CFO Rebecca Chambers explained that Veracyte is accelerating investments in key areas like the breast channel, MRD, and Prosigna launch while aiming to maintain an approximate 25% adjusted EBITDA margin in 2026 and beyond, leveraging gross margin tailwinds to offset increased spend.

Doug Schenkel asked about the clinical management of discordant results between digital pathology AI (DPAI) scores and Decipher, Veracyte's internal digital pathology efforts and timelines, and how the company balances margin trajectory with opportunistic investment in future growth drivers.

Answer

CEO Marc Stapley, Chief Commercial Officer John Leite, and Chief Medical and Scientific Officer Phil Febbo explained that DPAI models lack sufficient evidence, leading clinicians to prioritize Decipher as the gold standard in cases of discordance. Veracyte is leveraging its extensive transcriptome and pathology data to develop DPAI models and molecular features. CFO Rebecca Chambers highlighted that Veracyte is ahead of its margin targets due to disciplined portfolio management and is accelerating investments in Q4 2025, planning to maintain an approximate 25% Adjusted EBITDA margin in 2026 by offsetting increased spend with gross margin tailwinds.

Doug Schenkel of Wolfe Research LLC inquired about the long-term durability of Decipher's growth, specifically maintaining over 20% growth, and whether this could sustain double-digit revenue growth for the entire company, even with moderating Afirma performance.

Answer

CFO Rebecca Chambers clarified that the current guidance implies 22.5% to 24% revenue growth for Decipher, driven by the metastatic launch's halo effect and strong sales execution. CEO Marc Stapley affirmed confidence in reaching 80% market penetration for Decipher and outlined a layered growth strategy with Prosigna, MRD, and other pipeline products to ensure sustained double-digit company growth.

Doug Schenkel questioned the assumption of a normal first half versus second half revenue split in Repligen's 2026 guidance, despite factors like the Sarepta headwind annualizing mid-year and ATF consumables picking up steam, asking if this reflects prudence or potential market normalization upside.

Answer

President and CEO Olivier Loeillot explained that the 9%-13% organic growth guidance is appropriate, balancing controlled factors like a strong funnel with less controlled macro environment aspects such as MFN agreement digestion by big pharma and slow CapEx spending. CFO Jason Garland added that Q1 is expected to start strong, down only low single digits sequentially from Q4.

Doug Schenkel questioned Repligen's assumption of a normal first-half versus second-half revenue split for 2026, despite factors like the mid-year annualization of the Sarepta headwind and expected pickup in ATF consumables. He asked if this reflects prudence given market uncertainty or if market normalization could be an upside to guidance.

Answer

Olivier Loeillot, President and CEO, confirmed the guidance reflects prudence, balancing controlled factors like a strong funnel and broad portfolio performance with less controlled macro factors such as MFN agreements, CapEx spending decisions, and FDA approval rates. Jason Garland, CFO, added that Q1 is expected to start strong, with only a low single-digit sequential decline from Q4 2025, positioning Repligen well for the year.

Doug Schenkel questioned why Q4 revenue guidance implies only 2-3% higher than Q3, contrasting with a historical average of 9%, and whether this reflects conservatism or timing dynamics. He also asked for clarification on filtration revenue growth being at the lower end of the range, specifically differentiating between ATF and non-ATF, and its implications for product mix, such as stronger resin performance.

Answer

President and CEO Olivier Loeillot explained that less seasonality is expected this year due to an unusually strong Q3, which was higher than Q2. The Q4 guidance implies 8-13% organic growth, factoring in a 3% headwind from a gene therapy customer in Q4 of the prior year and a significantly tougher Q4 comparison (9 points more difficult sequentially). Regarding filtration, he mentioned that the delivery of blockbuster ATF hardware towards the end of Q3 also contributes to the reduced seasonality between Q3 and Q4.

Doug Schenkel questioned the implied Q4 revenue seasonality (2-3% higher than Q3 vs. historical 9% average), asking if it's conservatism or timing dynamics. He also sought clarification on filtration revenue growth being at the lower end of the range, differentiating ATF vs. non-ATF, and broader product mix.

Answer

Olivier Loeillot, President and CEO, explained that Q3's unusually strong performance (higher than Q2) reduces Q3-Q4 seasonality. He noted the Q4 guidance of 8-13% organic growth includes a 3% headwind from a gene therapy customer (purely filtration) and tougher year-over-year comps. He confirmed filtration revenue was impacted by the delivery of blockbuster ATF hardware in late Q3, affecting Q3-Q4 seasonality.

Doug Schenkel probed the company's long-term growth outlook, asking for a definition of 'market growth,' whether the goal of outperforming the market by 5% is sustainable amid new modality pressures, and if doubling revenue in the 'medium term' could happen in as little as three years.

Answer

CEO Olivier Loeillot defined market growth as 8-12% and expressed confidence in outperforming that by 5% due to the strength across all franchises. He affirmed this goal is achievable even with headwinds in specific new modalities by focusing on a diversified portfolio. He clarified that the 'medium term' for doubling revenue refers to a typical five-year strategic plan, with M&A as a potential accelerator.

Doug Schenkel asked Myriad Genetics to differentiate the drivers of Prolaris's year-end momentum (12% volume growth), specifically how much was due to favorable comparisons versus improved rep productivity or other dynamics. He also inquired about the sequential decline in prenatal units in Q4, asking if any order management dynamics remained, how this was factored into 2026 guidance, and if competitive dynamics played a role.

Answer

Sam Raha, President and CEO, attributed Prolaris growth to sustained efforts including KOL engagement, various programs, and sales team expansion into urology, expecting stronger actual growth in 2026, acknowledging a possible Q4 comparison benefit. Ben Wheeler, CFO, confirmed the Q4 prenatal volume decline and projected a Q1 year-over-year decline with recovery from Q2, driven by a focused sales force and new product (FirstGene) opening conversations. Brian Donnelly, CCO, noted that unaffected accounts were growing at or above market, and efforts were underway to restore impacted accounts. Mr. Raha emphasized that all other ordering systems were thoroughly checked after the Q2 2025 hiccup.

Doug Schenkel asked about the drivers behind Prolaris's momentum into year-end, specifically differentiating between the impact of favorable year-over-year comparisons and improved rep productivity or other dynamics. He also inquired about the prenatal business's momentum, noting a sequential decline in units in Q4, and asked if any order management dynamics remained, how they were factored into 2026 guidance, and if competitive dynamics played a role.

Answer

Sam Raha, President and CEO, attributed Prolaris's performance to sustained efforts including KOL engagement, various programs, and sales team expansion, expecting stronger growth in 2026 despite a potential Q4 comparison benefit. Ben Wheeler, CFO, acknowledged the Q4 prenatal volume decline, noting it's often a seasonally softer quarter, and reiterated expectations for a Q1 year-over-year decline followed by recovery from Q2, supported by a focused sales force and new product launches like FirstGene. Brian Donnelly, Chief Commercial Officer, added that accounts not impacted by the Q2 order management issue are growing at or above market, and the sales team is actively working to restore affected accounts and acquire new customers.

Doug Schenkel of Wolfe Research LLC inquired about the new strategic plan, asking for specific KPIs to measure progress, whether the portfolio review is complete regarding potential divestitures, and what fundamentally differentiates this new strategy from those of previous leadership.

Answer

President and CEO Sam Raha explained that specific, quantifiable KPIs for the new strategy will be shared in the coming months. He stated that while the company is excited about the current portfolio, all product lines will be periodically reviewed against strategic goals. Raha emphasized that the new strategy's key differentiators are a disciplined capital allocation towards the cancer care continuum, expanding the portfolio beyond HCT and HRD through partnerships, and a renewed focus on execution with 'stepped up urgency and strengthened execution rigor'.

Doug Schenkel sought confirmation on whether the probability of FDA approval remains unchanged by the NHS-Galleri readout, inquired about precedents for diagnostic reimbursement after missing a primary endpoint, and asked for explanations regarding why the NHS-Galleri trial fell short of its primary endpoint.

Answer

Joshua Ofman, President, stated that the FDA's focus is on clinical performance and safety, not population-level effects, and the submitted data for PMA is robust. Harpal Kumar, Chief Scientific Officer and President of International, emphasized the rarity of RCTs for diagnostics and the compelling clinical benefits observed despite missing the primary endpoint. He also noted the short follow-up for a screening trial and the plan to extend data collection by 6-12 months to allow control arm data to mature.

Doug Schenkel asked if the probability of FDA approval is unchanged by the NHS-Galleri readout, for examples of diagnostics reimbursed by NHS after missing a primary endpoint, and for explanations regarding why the primary endpoint was missed.

Answer

President Josh Ofman stated the FDA's focus is on clinical performance and safety, not clinical utility, and the submitted data for clinical validation is unaffected. CSO Sir Harpal Kumar highlighted the rarity of diagnostic RCTs like NHS-Galleri, emphasizing the compelling clinical benefits observed. He also noted an increase in Stage III cancers and the expectation of a stronger effect with longer follow-up, leading to a planned 6-12 month extension.

Doug Schenkel inquired about Guardant's free cash flow, specifically Shield's cash burn, and the planned pacing of sales representative hiring for Shield in 2026, including the expected year-end sales force size.

Answer

Mike Bell, CFO, stated that Shield's burn was approximately $220 million in 2025, and a similar level is expected for 2026 due to heavy commercial investments. He noted that the rest of the business was free cash flow positive in Q3 and Q4 2025. AmirAli Talasaz, Co-CEO, confirmed continued investment in the commercial organization, including sales and marketing, without specifying exact headcount.

Doug Schenkel asked about Shield's specific cash burn and the anticipated pacing of sales representative hiring for 2026.

Answer

CFO Mike Bell stated that Shield's burn was approximately $220 million in 2025 and is expected to be similar in 2026, reflecting heavy commercial investments. Co-CEO AmirAli Talasaz indicated continued build-out of the commercial organization, reinvesting incremental gross profit into sales and marketing.

Doug Schenkel inquired about the balance between single-cell consumable volume growth and pricing impact, specifically how volume growth offset pricing changes into year-end 2025, and how these factors are contemplated in the 2026 guidance.

Answer

CFO Adam Taich explained that full-year 2025 reaction growth was 22%, with Q4 seeing over 30% volume growth due to Flex Apex. For 2026, Chromium consumables are projected to be flat at the midpoint of guidance, with various product mix and volume combinations contributing to this.

Doug Schenkel asked for clarification on single-cell consumable revenue growth versus reaction volume, the impact of pricing, and how these factors are incorporated into the 2026 guidance.

Answer

CFO Adam Taich explained that Q4 saw over 30% volume growth in single-cell consumables, driven by FLEX APEX. For 2026, Chromium consumables are projected to be flat, with various combinations of product mix and volumes contributing to this outlook.

Doug Schenkel questioned the mid-single-digit organic revenue decline guidance for Q1 2026, suggesting that several discrete positive factors—such as the recovery of $40 million in semiconductor-related revenue from Q4 2025, the increasing impact of pricing actions initiated in May, and a potential NMR placement recapture—should lead to a better outcome, even with difficult comparisons.

Answer

EVP and CFO Gerald Herman explained that Q1 2025 had significant organic performance, particularly strong semi orders, making for a tough comparison. He clarified that the pushed-out semi orders are expected to impact the first half of 2026, not solely Q1, and that the 1.2 GHz NMR system was recognized in Q4 2025, with no specific NMR push-outs. President and CEO Frank Laukien added that the mid-single-digit decline for Q1 is a prudent and conservative estimate, acknowledging the range of outcomes, but emphasizing the greater optimism for resuming organic growth in subsequent quarters.

Doug Schenkel from Wolfe Research questioned the mid-single-digit organic revenue decline guidance for Q1 2026, noting that several positive factors, such as semiconductor-related revenue recovery, pricing impact, and potential NMR placement recapture, seemed inconsistent with such a decline.

Answer

Gerald Herman, EVP and CFO, and Frank Laukien, President and CEO, clarified that the strong Q1 2025 organic performance creates a difficult comparison. They explained that the timing of existing orders and semiconductor orders pushed out from Q4 2025 are expected to impact the first half of 2026, not solely Q1. Frank Laukien also confirmed that the 1.2 gigahertz NMR was recognized in Q4 2025 and not delayed.

Doug Schenkel's associate asked about the levers available to protect margins if NIH or China conditions worsen and how Bruker is positioned to benefit from increased testing in areas like food, water, and PFAS.

Answer

CEO Frank Laukien stated that a reasonable contingency for NIH funding reduction is already baked into the guidance. CFO Gerald Herman added that Bruker's global diversification, with over 70% of revenue ex-U.S., and strength in areas like semiconductor metrology and microbiology provide resilience. Regarding environmental testing, Laukien noted Bruker's involvement in applied markets like PFAS testing and suggested that a focus on phenomics aligns well with long-term health and environmental research trends.

Doug Schenkel asked for a midterm outlook, inquiring if, even with conservative GLP-1 scenarios and the recovery in non-GLP-1 HVP (including Annex 1), West is comfortable projecting at least mid- to high-single-digit revenue growth over the next several years.

Answer

CEO Eric Green provided a concise affirmative answer, stating 'the short answer is yes.'

Doug Schenkel asked if, considering the conservative GLP-1 guidance and the recovery in non-GLP-1 HVP (including Annex 1), management is comfortable stating that revenue can grow at least mid- to high-single digits over the next several years.

Answer

CEO Eric Green provided a short answer: "Yes."

Doug Schenkel from Wolfe Research asked if the Q4 guidance increase solely reflected the Q3 revenue beat or if there was conservatism, and sought clarification on the company's risk and visibility heading into next year, aiming to understand if West is returning to its historical "sleep-at-night" consistency.

Answer

CFO Bob McMahon stated that the Q4 guidance increase did not imply any material pull-forward from Q3, noting that Q4 represents an acceleration on a two-year stack basis, with an element of prudence due to market dynamics. He acknowledged that while visibility is improving and long-term trends are positive, the market remains dynamic. CEO Eric Green added that West is focused on reducing risks and increasing visibility by going deeper into segments, improving customer engagement, and responding to improving market conditions.

Doug Schenkel asked if the Q4 guidance bump was solely due to the Q3 revenue beat or if other factors were at play, and sought reassurance on reducing risks and improving visibility after past surprises in incentive payments and contract manufacturing.

Answer

CFO Bob McMahon clarified that Q4 guidance was not solely due to the Q3 beat, noting prudence given market dynamics, and committed to improving transparency and visibility. CEO Eric Green added that West is laser-focused on reducing risks and increasing visibility through deeper segment focus and closer customer engagement, confident in improving market conditions.

Doug Schenkel from Wolfe Research LLC asked about the company's path back to normalized growth into 2026 and for clarification on what assumptions for tariffs are included in the current guidance.

Answer

SVP & CFO Bernard Birkett stated the tariff guidance is based on information known at the time it was prepared, with ongoing monitoring and mitigation efforts. CEO Eric Green described 2025 as a 'transition year' and expressed confidence in the building momentum of the HVP components business into the second half, but refrained from giving specific 2026 guidance.

Doug Schenkel inquired about the year-one cost synergy target for the acquired BD businesses, specifically asking if the math of cutting 5%-6% of OpEx was correct and what was driving this increase, given it appeared to be about twice what was previously outlined. He also asked about potential upside to this year-one target.

Answer

SVP and CFO Amol Chaubal clarified that the underwriting model assumed roughly 4%-4.5% of the pro forma cost base for Waters standalone plus the acquired business, which included elements like site consolidations and commercial/technology synergies, but excluded others. He noted that typical deals of this size see around 6% synergies, and Udit Batra and Chris Ross achieved 8% at MilliporeSigma. Amol stated that they haven't baked in that higher level to allow for space and to cover for potential 'skeletons.' He confirmed they are on track to deliver their deal announcement commitments for synergies.

Doug Schenkel inquired about the cost synergy targets for the acquired BD businesses, specifically asking if his calculation of a 5%-6% OpEx cut in year one was correct and what was driving this increase, given it appeared to be twice what was previously outlined. He also asked about potential upside to this year-one target.

Answer

SVP and CFO Amol Chaubal clarified that the underwriting model assumed roughly 4%-4.5% of the pro forma cost base, including elements like site consolidations and commercial/technology synergies. He noted that while typical deals see 6% and prior integrations achieved 8%, they have been prudent in their targets to allow for flexibility. He confirmed they are on track to deliver their deal announcement commitments for synergies.

Doug Schenkel questioned the pacing dynamics in the financial model, noting that the full-year guidance increase was less than the Q3 beat, margins were light but expected to jump in Q4, and the tax rate was low in Q3 but expected to jump in Q4. He also asked about comfort with modeling 6-8% core top-line growth and 50-100 basis points of margin expansion for 2026, given difficult comparisons.

Answer

CFO Amol Chaubal advised focusing on the full-year performance, acknowledging quarterly puts and takes like bonus payouts and discrete tax items. He reiterated the full-year tax rate of 16.5%. CEO Udit Batra emphasized the strong setup for 2026, driven by the ongoing instrument replacement cycle (still in mid-innings), idiosyncratic growth drivers (GLP-1, India, PFAS), innovation (CDMS, Empower), and a more stable policy environment across pharma and academia. He expressed extreme confidence in top-line growth for 2026, deferring specific guidance until the Q4 call but highlighting numerous catalysts.

Doug Schenkel questioned the Q3 pacing dynamics, noting a revenue beat but a smaller full-year guidance increase, light margins with a projected Q4 jump, and a low tax rate in Q3 followed by an expected Q4 increase, asking whether to focus on these quarterly puts and takes or the overall strong full-year performance. He also asked about comfort with 2026 modeling of 6-8% core growth and 50-100 bps margin expansion given strong momentum and difficult comparisons.

Answer

CFO Amol Chaubal advised focusing on the full-year performance, explaining quarterly variations are due to factors like bonus payouts, commissions, and timing of discrete tax items, with a full-year tax rate of 16.5%. President and CEO Udit Batra emphasized the strong setup for 2026, citing the ongoing instrument replacement cycle, idiosyncratic growth drivers (GLP-1, PFAS, India generics), innovation in bioanalytical characterization and bioseparations, and new product launches like Xevo CDMS and Empower advancements, all contributing to confidence in top-line growth.

Doug Schenkel inquired about Illumina's operating margin guidance, specifically if it implies a higher exit rate for 2026, and any changes to the 2027 margin target considering the SomaLogic acquisition. He also asked about the company's capital deployment strategy, M&A criteria, and priorities given the strong balance sheet and free cash flow.

Answer

CEO Jacob Thaysen affirmed confidence in the 2027 targets of high single-digit growth and 26% operating margin, noting significant progress despite headwinds and commitment to achieving the target post-SomaLogic. CFO Ankur Dhingra confirmed that the 2026 exit rate operating margin, excluding SomaLogic, is expected to be higher than the average, nearing 24.5%.

Doug Schenkel with Wolfe Research inquired about Illumina's operating margin guidance, specifically if the 2026 exit rate is expected to be higher than the average and if the 2027 margin target remains unchanged factoring in the SomaLogic acquisition. He also asked about the company's capital deployment strategy and M&A criteria given its strong balance sheet and free cash flow generation.

Answer

CEO Jacob Thaysen affirmed confidence in the 2027 long-term targets, including high single-digit growth and 26% operating margin, noting significant progress in 2025 despite headwinds. CFO Ankur Dhingra confirmed that the 2026 exit rate operating margin (excluding SomaLogic) is expected to be higher than the full-year average due to business cyclicality.

Doug Schenkel from Wolfe Research LLC asked for confirmation that Q4 guidance implies the strongest ex-China growth in two years and presented a framework for 2026 growth, asking if low-to-mid single-digit core revenue growth is a reasonable expectation.

Answer

CEO Jacob Thaysen avoided giving specific 2026 guidance but affirmed the company's growth trajectory, stating that the NovaSeq X transition remains the primary driver. He reiterated expectations that 2026 financial performance will be better than 2025, and 2027 will improve upon 2026, led by strength in the clinical segment. He also noted that multiomics is expected to add about one percentage point of growth, likely at the 2027 level.

Doug Schenkel highlighted a discrepancy in his 2026 EPS calculation compared to guidance and asked for clarification on missing factors. He also inquired about the logical next required disclosure under German regulations, beyond a new hire announcement.

Answer

Roland Sackers (CFO) addressed the EPS calculation discrepancy, explaining that the net interest contribution would significantly change due to an acquisition and a $5.5 million share repurchase program, resulting in a $40-45 million reduction in net interest. Regarding German disclosure requirements, he stated that the general rule is to comment on any material market news that could significantly impact the share price, regardless of the topic, and that QIAGEN's legal team continuously assesses such situations.

Doug Schenkel questioned the 2026 EPS guidance of 'at least $2.50,' stating his calculations, based on 5% revenue growth, flat operating margin (net of deals/FX), flat non-operating items, and 209 million share count, resulted in an EPS above $2.60. He asked what he might be missing. He also inquired about the logical next required disclosure under German regulations, beyond a new hire, given past disclosures.

Answer

Thierry Bernard (CEO, QIAGEN) and Roland Sackers (CFO, QIAGEN) clarified that Doug Schenkel was likely missing the significant change in net interest contribution, which is expected to be $40 million-$45 million lower due to the Parse acquisition and the $500 million share repurchase program. Roland Sackers also explained that German disclosure requirements mandate commenting on material news if market information is based on leaks or significantly impacts the share price, regardless of the topic, and that such decisions are typically made in consultation with legal counsel.

Doug Schenkel asked about the current M&A funnel and the key parameters for potential deals, and also questioned the drivers behind margins trending ahead of the 2028 long-range plan.

Answer

CEO Thierry Bernard described the M&A strategy as focused on synergistic, value-creating bolt-on acquisitions with a clear path to accretion within 2-3 years. CFO Roland Sackers acknowledged tracking ahead of margin targets, attributing future improvements to digital initiatives, AI, and scale, but noted they are taking a realistic view given the macro environment and will likely update long-term guidance early next year.

Doug Schenkel challenged management on the stock's valuation, asking why the company isn't more aggressive with share buybacks now, and sought to understand the key levers for margin expansion into next year beyond the obvious factors.

Answer

CEO Thierry Bernard expressed that consistent execution would ultimately be rewarded by the market. CFO Roland Sackers noted the company's consistent buyback policy and acknowledged opportunities to increase it over time. On margins, both executives highlighted that beyond the NeuMoDx discontinuation, drivers include site rationalization, COGS improvements for QIAstat, and procurement efficiencies, balanced with reinvestment in accelerating R&D projects.

Doug Schenkel sought clarification on whether the 50,000+ genes for data characterization are synonymous with pharma volume, inquired about what's included in the guidance for the rest of the year, and asked about competitive dynamics given the robust 271,000 genes shipped in the quarter.

Answer

Patrick Finn, President and COO of Twist Bioscience, confirmed that the growth in genes manufactured is primarily driven by the pharma segment and AI interest, emphasizing the platform's scale, speed, quality, and economics for large experimental sizes. He also discussed competitive dynamics, noting Twist's significant speed advantage over competitors and their relentless focus on internal scaling and acceleration despite competitor layoffs.

Doug Schenkel of Wolfe Research inquired if the 50,000 genes manufactured for data characterization are primarily indicative of pharma volume, what the guidance includes for the rest of the year, and the competitive landscape given the robust 30%+ year-over-year growth in 271,000 genes shipped.

Answer

President & COO Patrick Finn confirmed that the growth is largely driven by the pharma segment and AI interest, underscoring the platform's scale and speed. He noted positive reordering trends and competitive advantages, including being weeks faster than rivals. CEO Emily Leproust reiterated the concentration of the 50,000 genes in Q4 and Q1, indicating a positive trend.

Doug Schenkel asked about the status and duration of Twist Bioscience's SynBio academic promotion and the outlook for price per gene in 2026 versus 2025. He also questioned if the NGS Q1 guidance was purely a pacing dynamic or indicated changes in underlying trends, and sought clarification on the market opportunity size and penetration for DNA Synthesis, NGS MRD/MSED, and average Twist revenue per assay.

Answer

Emily Leproust, CEO and Co-Founder, confirmed the academic promotion for Express genes is ongoing and successful, with no immediate plans to close it. She stated that the NGS Q1 guide is purely a pacing dynamic, not a change in demand, citing excitement around liquid biopsy, MRD Express, FlexPrep, and sequencer integrations. Regarding market definition, she acknowledged the need for better articulation but emphasized low penetration and differentiated products, noting the complexity of providing a single "price per test" due to varying assay complexities.

Doug Schenkel asked about the SynBio academic promotion, specifically if the Express gene pricing premium removal is still active and its planned duration, as well as expectations for price per gene in fiscal 2026 versus 2025. He also inquired if the Q1 NGS guidance reflects purely a pacing dynamic or a change in underlying trends, and sought clarification on Twist's market opportunity, including market size, penetration, and average revenue per assay for DNA synthesis and NGS (MRD/MSED).

Answer

Emily Leproust, CEO and Co-Founder, confirmed the SynBio academic promotion has been successful and remains active, with no immediate plans to discontinue it. She reiterated that the Q1 NGS guidance is purely a pacing dynamic, with strong underlying excitement and wins across various applications. Dr. Leproust acknowledged the need for better market articulation for investors, stating Twist is far from market penetration and performs strongly against competitors, while explaining the complexity of providing a public 'price per test' due to assay variability.

Doug Schenkel questioned the bioprocessing equipment growth guidance, noting Q4 strength and favorable comparisons for most of 2026, and asked if the flat guidance implied pull-forward demand or extra prudence. He then pivoted to capital deployment, asking about the M&A environment, Danaher's readiness and priorities for more aggressive action, and if the company is better positioned for sizable opportunities now compared to previous quarters.

Answer

CFO Matt McGrew explained that while Q4 equipment growth was encouraging, it was only one quarter, and guiding to flat for the year was a prudent starting point given the unpredictable environment. CEO Rainer Blair stated that the M&A environment is more constructive, with valuations moving favorably and moderated interest rates. He affirmed Danaher's strong cultivation of targets and bias towards M&A, emphasizing their differentiated cash flow and balance sheet position to act on opportunities while maintaining discipline on end markets, asset quality, and financial models. He concluded that the setup is positive with improving end markets, strong execution, and a primed balance sheet.

Doug Schenkel (Wolfe Research) questioned the conservative flat guidance for bioprocessing equipment in 2026, given Q4's growth and favorable comparisons, asking if demand was pulled forward or if it reflected extra prudence. He then shifted to capital deployment, inquiring about the M&A environment, Danaher's readiness for sizable acquisitions, and if their position for aggressive moves had improved recently.

Answer

Matt McGrew, Executive Vice President and Chief Financial Officer, explained the flat equipment guide for 2026 as prudent, emphasizing that one quarter of growth doesn't establish a trend. Rainer Blair, President and CEO, characterized the M&A environment as more constructive due to moderating valuations and interest rates. He reaffirmed Danaher's disciplined approach to M&A, focusing on long-term tailwinds and attractive assets, and stated the balance sheet is 'primed' for opportunities.

Doug Schenkel asked if Danaher has observed any changes in activity or tone with biotech and pharmaceutical customers following the Pfizer MFN announcement, and whether any such changes were reflected in the current guidance. He also questioned the 2026 margin outlook, suggesting that the $300 million in productivity enhancements in 2025, which depressed current year margins, might lead to an upside skew for 2026 margins as benefits roll through.

Answer

Rainer Blair, President and CEO, confirmed a shift in tone among pharma executives, noting increased confidence as policy overhangs (like MFN discussions and tariffs) stabilize. However, he stated that this has not yet translated into demonstrated order patterns, so it is not reflected in current guidance. Matt McGrew, Executive Vice President and CFO, reiterated expectations for north of 100 basis points of margin expansion in 2026, driven by 35%-45% fall-through on volume and $250 million in net savings from 2025 cost actions, which provides a $0.30 EPS tailwind. He emphasized that this is a net number balancing investment with delivering high single-digit EPS growth, even at the low end of the revenue range.

Doug Schenkel asked if Danaher has observed any changes in activity or tone with biotech and pharmaceutical customers following the Pfizer MFN announcement, and if this is reflected in guidance. He also questioned if there's an argument for an upside skew to 2026 margins, given the $300 million in productivity enhancements invested in 2025 that depressed current year margins, and the anticipated benefits rolling through next year.

Answer

Rainer Blair (President and CEO) confirmed a shift in tone and increased confidence among pharma executives regarding capital investment decisions due to dissipating policy overhangs (MFN, tariffs stabilizing), but noted this hasn't yet translated into order patterns, so it's not reflected in guidance. Matt McGrew (EVP and CFO) reiterated that the 35-45% fall-through on volume plus $250 million net savings from cost actions (from $175 million in 2025) will drive over 100 basis points of margin expansion. He emphasized balancing investment with EPS growth, feeling comfortable with high single-digit EPS even at the low end of the revenue range.

Doug Schenkel sought clarification on the bioprocessing assumptions within the full-year guidance, asking about the revenue growth target, second-half pricing assumptions, and whether strength in bioprocessing was offsetting weakness in Discovery & Medical (D&M).

Answer

EVP & CFO Matt McGrew confirmed the full-year guide for bioprocessing remains at high single-digits. He noted pricing was around 1.5-2% in the first half and expects a similar or slightly better rate in the second half. McGrew also affirmed that stronger performance in the core bioprocessing business is offsetting some softness in the D&M business, maintaining the overall segment guide.

Doug Schenkel asked about the strong performance of the lab segment, which was above model and guidance, inquiring how much was driven by process analytics versus traditional lab equipment, and specifically if there was increased demand for bioprocessing sensors due to CDMOs building brownfield plants. He also commented on the impressive 9% organic growth in the industrial segment, asking if it would normalize, if there were timing dynamics, or if it indicated real momentum.

Answer

Shawn Vadala, CFO, confirmed process analytics was a highlight for the lab segment, driven by bioprocessing and investments in the power grid. He noted good growth in analytical instruments and weighing solutions, but softness in liquid handling due to funding and research pressures. For the industrial segment, Mr. Vadala acknowledged better-than-expected Q3 activity from various factors, including transportation and logistics automation. He noted an easier Q3 comp and expects a step down to low single-digit growth in Q4 due to timing, but expressed confidence in execution and portfolio positioning for automation and digitalization.

Doug Schenkel asked about the drivers behind the Laboratory segment's better-than-expected mid-single-digit organic growth, specifically how much was from process analytics versus traditional lab equipment, and if there was increased demand for bioprocessing sensors. He also questioned the impressive 9% organic growth in Industrial, asking if it would normalize, if there were timing dynamics, or if it indicated real momentum.

Answer

Shawn Vadala, Chief Financial Officer, confirmed process analytics was a highlight for Laboratory, driven by strong bioprocessing growth and investments in the power grid. He noted good growth in analytical instruments and weighing solutions, but softness in liquid handling due to funding and research uncertainties. For Industrial, Mr. Vadala acknowledged better-than-expected activity in Q3, including transportation and logistics solutions, driven by automation and digitalization needs, and an easier Q3 comparison. He expects a step down to low single-digit growth in Q4 due to timing, but remains confident in the portfolio and its positioning for onshoring benefits.

Doug Schenkel from Wolfe Research asked if stabilizing trends in Europe and China could represent potential upside to the implied Q4 guidance. He also requested more detail on the strong demand for automation within the core industrial business.

Answer

CFO Shawn Vadala was cautious, noting that Europe faces a tough Q4 comparison and that China remains a 'wild card' for which the company's outlook is conservative. CEO Patrick Kaltenbach attributed the core industrial strength to a sustained demand for automation and digitalization solutions, highlighting good momentum in the U.S. and a recovery in China and Asia Pacific across various end markets.

Doug Schenkel asked about the timeline for outlining a full strategic framework, the likelihood of meaningful EBITDA expansion in 2026 given new investments and challenging comparisons, and whether Avantor's lingering challenges are due to systems or competitive dynamics.

Answer

President and CEO Emmanuel Ligner stated he would provide a more comprehensive strategic vision in Q1 2026, having already initiated action on obvious challenges. EVP and CFO Brent Jones acknowledged the difficult comparators for 2026 and emphasized the focus on the Avantor Revival plan's impact on operations and cost efficiency. Emmanuel Ligner characterized the market dynamic as mixed, with solid production but uncertainty in R&D (academic and pharma).

Doug Schenkel asked if it's reasonable to expect CEO Emmanuelle Ligner to present his full assessment and strategic framework by early Q1. He also questioned CFO R. Brent Jones on whether meaningful EBITDA expansion in 2026 seems challenging given new hires, investments, difficult revenue growth, and tough margin comparisons. Finally, he asked both executives if visibility and forecasting challenges stem from systems needing investment or evolving competitive dynamics.

Answer

Emmanuelle Ligner, President and CEO, confirmed he would provide further strategic vision in Q1 after his initial 100-day assessment. R. Brent Jones, EVP and CFO, acknowledged the challenging comparators for 2026 but refrained from signaling specific numbers, emphasizing the focus on the 'Avantor Revival' plan. Emmanuelle Ligner characterized the market as mixed, with solid production but uncertainty in R&D (academic and pharmaceutical sectors).

Doug Schenkel sought clarification on why contract extensions in the lab business were being described as 'share gains.' He also asked about the impact of the price-focused strategy on near- and long-term margin targets and questioned the conviction behind the implied Q4 EBITDA margin ramp to ~18% given current headwinds.

Answer

President & CEO Michael Stubblefield explained that during competitive bids, Avantor not only retained existing business but also won business from competitors at those same accounts, resulting in net share gains. EVP & CFO R. Brent Jones acknowledged near-term margin pressure in the lab segment but stressed the long-term value of the wins. He clarified the Q4 margin ramp is at the high end of guidance and would require a favorable mix shift, not a baseline assumption.

Doug Schenkel asked about China diagnostics, specifically its percentage of total sales, the expectation for it to be down 20%-25% through Q2 2026 due to multiplex reimbursement changes, and the confidence in its return to growth thereafter, contrasting with other companies' cautious outlooks.

Answer

Senior Vice President and CFO Max Krakowiak clarified that China is closer to 6% of total revenue. He confirmed expectations for DRG headwinds to continue until the Q2 2026 anniversary, after which the ImmunoDiagnostics business in China is assumed to return to low single-digit growth. Krakowiak also highlighted the strong performance of the ImmunoDiagnostics business outside of China.

Doug Schenkel inquired about the revenue pacing assumptions for the second half of the year, including factors like budget flush and NIH funding, and asked about the timeline for the China DRG headwind to annualize.

Answer

CFO Max Krakowiak noted that revenue pacing reflects normal seasonality, with a Q3-to-Q4 ramp boosted by the Genomics England (Gel) contract and a strong quarter for the Signals software business. CEO Prahlad Singh stated the DRG impact, which began in late Q2, is expected to persist until it is anniversaried next year.

Doug Schenkel from Wolfe Research LLC asked for a rule of thumb on how Tempus decides between partnering versus organic development. He also inquired about the long-term potential for MRD as a percentage of oncology volumes and its impact on gross margin.

Answer

CEO Eric Lefkofsky explained that their M&A filter starts with not acquiring anything that would derail their plan to reach adjusted EBITDA positivity. On MRD, he stated it will be a catalyst for unit growth post-reimbursement, but the company will be measured in its rollout to ensure sustainable, long-term growth rather than a short-term spike. CFO Jim Rogers added that any margin impact from MRD would be managed carefully to maintain the company's overall path to profitability.

Doug Schenkel asked about the size of the sales pipeline that is close to converting but awaiting resolution on NIH funding. He also inquired about the development of reusable smart cells and which customer segment, research or clinical, would be more receptive to this new technology.

Answer

President and CEO Christian Henry described the number of near-term sales opportunities, particularly for Vega, as "significant" and larger than normal, representing potential upside for 2025 and 2026. On reusable smart cells, he stated that both clinical and research customers are excited about the innovation. The initial rollout will likely target high-throughput customers to maximize the benefit of lower costs, which also improves PacBio's gross margins.

Doug Schenkel of Wolfe Research sought clarity on tariff mitigation efforts, the mathematical drivers of the guided operating margin expansion, and the reason for the increased full-year tax rate assumption.

Answer

CFO Marco Dal Lago explained that tariff impacts are being offset through customer negotiations and leveraging their global footprint. He attributed the operating margin expansion to a higher mix of High-Value Solutions and lower depreciation, not flat OpEx. The higher tax rate is a non-cash item reflecting a cautious approach on deferred tax assets in Denmark.

Doug Schenkel asked about the outlook for continued momentum into fiscal 2026 and whether any impact from China's DRG policies was felt in the quarter.

Answer

CFO Karleen Oberton confirmed the company expects mid-single-digit growth in FY26 but highlighted headwinds from the Fluoriscan discontinuation and ongoing challenges in China and with HIV testing. Corporate VP & IR Michael Watts later clarified that while Hologic is not directly exposed to the same DRG issues as peers, the overall China operating environment is difficult, with revenue from the region down over 50% year-over-year.