Executive Summary

Q1 2025 revenue of $1.58B (-6% y/y; -2% organic) and adjusted EPS of $0.23; revenue modestly missed S&P Global consensus ($1.61B*) and adjusted EPS was roughly in line ($0.232*) as adjusted EBITDA margin rose 20 bps y/y to 17.0% .
Management revised FY25 outlook: organic revenue growth to -1% to +1% (reported -2% to flat), cut adjusted EBITDA margin by 50 bps to 17.5%-18.5%, kept adjusted EPS $1.02-$1.10 and FCF $650-$700M unchanged; Q2 guide calls for flat-to-modest organic growth and mid-17s EBITDA margin .
Lab Solutions underperformed on funding/policy headwinds in U.S. higher education/government and softer bench-stage biotech (funding down ~40% in the quarter), while Bioscience Production saw growth in process ingredients and double-digit single-use offset by weakness in controlled environment consumables .
Cost program expanded to deliver $400M run-rate gross savings exiting 2027, supporting margins/FCF amid top-line pressure .
CEO transition announced; board initiated search for successor—potential narrative catalyst alongside guidance reset and enlarged cost actions .

What Went Well and What Went Wrong

What Went Well
- Margin resilience: Adjusted EBITDA margin improved to 17.0% (+20 bps y/y) despite revenue pressure, aided by cost transformation; adjusted SG&A down 7% y/y .
- Bioprocessing momentum: Continued growth in process ingredients/excipients and double-digit gains in single-use (including Masterflex); strong, broad-based order intake supports recovery thesis .
- Expanded self-help: Cost program lifted to $400M run-rate by 2027; management reiterated urgency to “control our controllables” and front-load incremental savings where possible .
- Representative quote: “Despite the top-line pressure, adjusted EBITDA margin increased 20 basis points year-over-year to reach 17%... Our cost transformation initiative was an important contributor” .
What Went Wrong
- Top-line softness: Net sales fell 6% reported (-2% organic), driven by Lab Solutions; segment sales down 8% reported (-3% organic) and adjusted OI down y/y .
- End-market headwinds: U.S. higher education/government demand slowed after policy changes; bench-stage biotech funding fell ~40% in the quarter, pressuring consumables/equipment .
- Controlled environment consumables: Unexpected pullback as customers optimized usage, offsetting bioprocessing gains; management is intensifying account-level actions to stabilize trends .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025	Q1 2025 Consensus (S&P Global)*
Revenue ($B)	$1.680	$1.687	$1.581	$1.609*
Adjusted EBITDA ($M)	$283.0	$307.7	$269.5	—
Adjusted EBITDA Margin (%)	16.8%	18.2%	17.0%	—
Adjusted EPS ($)	$0.22	$0.27	$0.23	$0.232*
GAAP EPS ($)	$0.09	$0.73	$0.09	—
Operating Cash Flow ($M)	$141.6	$173.3	$109.3	—
Free Cash Flow ($M)	$106.9	$222.1	$82.1	—
Adjusted Net Leverage (x)	—	3.2x	3.2x (as of 3/31/25)	—

Year-over-year: Revenue -6%; organic -2% .
Sequential: Revenue down from Q4’s seasonal strength; margin normalized from 18.2% to 17.0% .
vs. Estimates: Revenue modest miss; adjusted EPS roughly in line vs S&P Global consensus*.

Segment performance (Q1 2025)

Segment	Net Sales ($M)	y/y Reported	y/y Organic	Adjusted OI ($M)	AOI Margin
Laboratory Solutions	$1,065.0	-8.0%	-3.0%	$139.0	13.1%
Bioscience Production	$516.4	-1.2%	~0%	$123.4	23.9%

Selected KPIs

KPI	Q1 2024	Q1 2025
Gross Profit ($M)	$570.5	$534.9
Operating Income ($M)	$146.3	$147.4
Cash & Equivalents ($M)	$259.2 (end of period)	$315.7 (as of 3/31/25)

Note: Values retrieved from S&P Global are marked with an asterisk and may reflect S&P Global conventions versus company-reported definitions.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth	FY 2025	Not disclosed in reviewed materials	-1% to +1%	Lowered (directional)
Reported Revenue Growth	FY 2025	Not disclosed	-2% to 0% (divestiture -2%, FX +1%)	Lowered (directional)
Adjusted EBITDA Margin	FY 2025	~18.0%–19.0% (inferred from -50 bps update)	17.5%–18.5%	Lowered 50 bps
Adjusted EPS	FY 2025	$1.02–$1.10 (unchanged)	$1.02–$1.10	Maintained
Free Cash Flow	FY 2025	$650–$700M (unchanged)	$650–$700M	Maintained
Q2 Organic Revenue	Q2 2025	Not disclosed	Flat to modestly up	New quarterly detail
Q2 Reported Revenue	Q2 2025	Not disclosed	Flat to modestly down (divestiture -3%, FX +1.5%)	New quarterly detail
Q2 EBITDA Margin	Q2 2025	Not disclosed	Mid-17s	New quarterly detail
Segment View	FY/Q2 2025	Not disclosed	Lab: flat to modestly down; Bioscience Production: up mid-single digits; Bioprocessing: mid-single digits	Updated run-rates

Tariffs: No material tariff cost impact assumed; modest China demand reduction included. Management cites 2% of COGS exposure to China and multiple mitigation levers (alternate sourcing, pricing, inventory) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24; Q4’24)	Current Period (Q1’25)	Trend
Bioprocessing demand/order book	Q3: Outperformed; order momentum; Q4: High single-digit growth, strong order intake	Low-single-digit growth in bioprocessing components; strong order intake; single-use double-digit; controlled environment consumables weak	Improving but mixed within components
Lab Solutions demand/competition	Q3: Lab returned to growth; resilient consumables; cautious capital	U.S. higher ed/government slowed post policy changes; increased competitive intensity; targeting account retention/new wins	Deteriorated
Pricing/AI-enabled e-commerce	Q4: Normalized pricing vs COGS; planning 2025 pricing	AI-enabled e-commerce rollout; pricing capability upgrades to improve agility/profitability	Investment accelerating
Cost transformation	Q3: Ahead of plan; >$150M exit run-rate	Run-rate target increased to $400M by 2027; front-loading where possible	Upsized
Tariffs/supply chain	Q3: Resilient supply chain; planning for scenarios	2% COGS exposure (China); no material tariff impact assumed; mitigation levers in place	Managed risk
Semiconductors (Advanced Tech)	Q3: U.S. semi weakness; stable sequentially; headwinds expected	Segment remains pressured; not a major 2025 recovery assumption	Stabilized at lower level
CEO transition	—	Board initiated CEO search; Stubblefield to step down upon appointment	Governance transition underway

Management Commentary

Strategic posture: “We are not satisfied with our growth and we are taking aggressive actions to reignite the top line regardless of the macro backdrop” .
Lab Solutions actions: “Delivery excellence… AI-enabled e-commerce… optimize pricing by leveraging digital technologies… first go-live later this quarter” .
Bioprocessing outlook: “Strong… broad-based order book… double-digit growth in single-use, including Masterflex” .
Cost program: “We… now expect to exit 2027 with at least $400 million of run rate cost savings… committed to front-loading the incremental savings as much as possible” .
Tariffs: “Primary exposure… 2% of COGS related to China… we will do everything to offset that… alternate suppliers… tariff surcharges as necessary” .

Q&A Highlights

Guidance cadence: Q2 organic flat-to-up driven by seasonality and momentum; CFO characterized Q1 BPS weakness as timing and said full-year guide is “prudently” set .
Tariff framework: No material tariff cost impact embedded; modest China demand haircut included; 2% COGS exposure can be mitigated with sourcing/price/actions .
Controlled environment consumables: Unexpected optimization by customers pressured usage; management ramping commercial intensity; early signs of stabilization in daily sales trends .
Lab competitive dynamics: Heightened competition reduced volumes at a handful of accounts; focus on retaining/growing key accounts under new Lab Solutions leader .
Pricing: 2025 pricing playing out largely as expected; incremental investments to enhance pricing agility and tailoring underway .

Estimates Context

Metric	Q1 2025 Actual	Q1 2025 Consensus*	Surprise
Revenue ($B)	$1.581	$1.608*	Miss
Adjusted EPS ($)	$0.23	$0.232*	In line/slight miss
Revenue – # of estimates	—	18*	—
EPS – # of estimates	—	21*	—

Management kept FY25 adjusted EPS ($1.02–$1.10) and FCF ($650–$700M) unchanged despite cutting margin guidance, implying confidence in cost levers to offset lower growth .
Note: Values marked with an asterisk are retrieved from S&P Global consensus.

Key Takeaways for Investors

Near-term: Modest top-line pressure persists (Lab Solutions) but margin/FCF supported by expanded cost actions; CEO transition and guidance reset are key narrative drivers. Watch Q2 for sequential stabilization (mid-17s EBITDA margin) and signs of improvement in controlled environment consumables .
Medium-term: Bioprocessing order book and single-use growth underpin recovery path; management still views the franchise as a double-digit grower over time as end-market normalization continues .
Risk management: Limited direct tariff COGS exposure (~2%); multiple mitigation levers reduce earnings risk if trade frictions escalate .
Execution priorities: Lab Solutions turnaround (pricing, digital, delivery excellence, account retention/acquisition) is central to re-accelerating organic growth .
Balance sheet/cash: Adjusted net leverage at 3.2x with best-in-class FCF conversion focus; deleveraging remains top capital allocation priority .

References: Q1 2025 press release and 8‑K ; Q1 2025 earnings call transcript ; Q4 2024 and Q3 2024 materials for trend context . CEO transition PR .

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