Sign in

You're signed outSign in or to get full access.

BL

BIO-RAD LABORATORIES, INC. (BIO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean beat versus S&P Global consensus: non-GAAP EPS $2.54 vs $1.78 (+43%), revenue $585.4M vs $573.2M (+2%), and EBITDA ~$95M vs $84.1M (+13%); margin execution was solid despite mixed demand and restructuring (estimates from S&P Global).
  • Guidance was moderated: full‑year currency‑neutral revenue now −1.0% to +1.5% (was +1.5% to +3.5%) and non‑GAAP operating margin 10–12% (was 13–13.5%), driven primarily by a 130 bps tariff headwind and softer academic/biotech demand .
  • Segments: Life Science −5.4% yoy to $228.6M on academia/biotech softness; Clinical Diagnostics −3.2% yoy to $356.8M, pressured by China diabetes reimbursement, offset by quality control strength .
  • Cash generation improved: CFO $129.9M in Q1; company maintained full‑year FCF target $310–$330M and accelerated buybacks ($101M in Q1; $99M in April) .
  • Stock narrative catalysts: consensus beat and buybacks supportive near‑term; guidance reset, tariff overhang, and NIH funding uncertainty are headwinds; watch process chromatography normalization and ddPCR momentum post‑Stilla close .

What Went Well and What Went Wrong

What Went Well

  • Revenue, operating profit, and margins came in ahead of consensus; non‑GAAP EPS $2.54 and non‑GAAP operating margin 10.8% with solid cost control and productivity improvements .
  • Process chromatography returned to growth (mid‑teens yoy in Q1), with destocking easing and outlook for high single‑digit growth in 2025 .
  • ddPCR momentum in reagents/consumables and oncology evidence generation (ctDNA correlation with treatment outcomes) reinforce platform value; company is advancing digital PCR strategy and Stilla integration plans .

What Went Wrong

  • Life Science segment down −5.4% yoy (currency‑neutral −3.5%) due to academic research headwinds and softer biotech instrument demand, particularly in the Americas .
  • Diagnostics declined −3.2% yoy (currency‑neutral −0.1%) with China diabetes reimbursement reductions; China demand weakened through the quarter .
  • Guidance cut: gross margin now 53–54.5% (was 55–55.5%) and operating margin 10–12% (was 13–13.5%), with tariffs driving ~130 bps OM headwind and market softness ~100 bps .

Financial Results

Quarterly Trend

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)649.7 667.5 585.4
GAAP Gross Margin (%)54.8 51.2 52.3
Non-GAAP Gross Margin (%)55.6 53.9 53.8
GAAP Operating Income ($M)64.5 58.4 23.7
Non-GAAP Operating Income ($M)73.3 92.1 63.0
GAAP Diluted EPS ($)23.34 −25.57 2.29
Non-GAAP Diluted EPS ($)2.01 2.90 2.54
Adjusted EBITDA ($M)106.9 126.1 113.7
Cash from Operations ($M)331.0 (9M’24) 124.2 (Q4) 129.9 (Q1)

Q1 2025 vs Prior Year and vs Estimates

MetricQ1 2024Q1 2025 ActualS&P ConsensusDelta vs Est.
Revenue ($M)610.8 585.4 573.2*+$12.2M (+2.1%)*
Non-GAAP Diluted EPS ($)2.30 2.54 1.78*+$0.76 (+43%)*
EBITDA ($M)108.4 (Adj. EBITDA) 95.0*84.1*+$10.9M (+12.9%)*
Note: Estimates and starred actuals retrieved from S&P Global.

Segment Breakdown (Q1 2025)

SegmentNet Sales ($M)YoY Change (%)Currency-Neutral YoY (%)
Life Science228.6 −5.4% −3.5%
Clinical Diagnostics356.8 −3.2% −0.1%

KPIs and Balance Sheet Highlights

KPIQ1 2025Q4 2024Notes
Cash & Short-Term Investments ($B)1.660 1.665 Stable liquidity
Inventory ($M)790.1 760.0 Sequential build
Operating Cash Flow ($M)129.9 124.2 Improved yoy
Free Cash Flow ($M)96 (Q1) 81 (Q4) FY target $310–$330M
Share Repurchases$101M Q1; $99M in April $202M FY 2024 $377M remaining authorization

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Currency-Neutral Revenue GrowthFY 2025+1.5% to +3.5% −1.0% to +1.5% Lowered
Non-GAAP Operating MarginFY 202513.0% to 13.5% 10% to 12% Lowered
Non-GAAP Gross MarginFY 202555% to 55.5% 53% to 54.5% Lowered (tariffs)
Non-GAAP Tax RateFY 2025~23% ~22% Lowered
Life Science Revenue GrowthFY 2025+1.5% to +3.5% Flat to −3% Lowered
Clinical Diagnostics Revenue GrowthFY 2025+2% to +3% +0.5% to +2.5% Lowered
FX Headwind to OMFY 2025~40 bps ~20 bps Improved
Free Cash FlowFY 2025$310–$330M $310–$330M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3/Q4 2024)Current Period (Q1 2025)Trend
Tariffs/macroTariffs not a major focus; China reimbursement change hit Q4 margin ~60 bps and mid‑teens $M annual impact Tariffs now core driver: 130 bps OM headwind; mitigation via surcharges, pre‑positioning, regionalizing supply chains Deteriorating macro impact; tariff mitigation in progress
Academic fundingSoft throughout 2024; NIH indirect cap uncertainty February–March lull in grant approvals; elongated instrument sales cycles; caution persists Softer near‑term; visibility limited
Bioprocessing (Process Chromatography)Improved in 2H 2024; high single‑digit growth expected 2025 Mid‑teens growth Q1 from order timing; 2025 outlook high single‑digit maintained Normalizing; supportive
ddPCR strategyReagent demand strong; expanding assays; continuum program progress; Stilla acquisition announced Oncology evidence highlighted; reagent/consumable growth; Stilla close targeted Q3 with strategy webinar Positive momentum; portfolio broadening
China (Diagnostics)A1c reimbursement cut hit Q4; high single‑digit % revenue exposure Diagnostics softness; evaluating tariff scope; mid‑to‑high single‑digit negative vs plan; quality systems may be excluded from tariffs Mixed: reimbursement headwind stable; tariff risk evolving
Capital allocationWillingness for midsize/larger deals; ongoing buybacks Balance sheet “B‑range” deal capacity; opportunistic buybacks; inorganic optionality Active deployment

Management Commentary

  • CEO: “We are still in the golden age [of] biology… long runway ahead for life science research and diagnostics… we have tremendous optionality [on] our strong balance sheet [and] are seeing more opportunities as valuations… have moderated” .
  • COO: “We delivered solid Q1 results exceeding consensus… bioproduction [process chromatography] returned to growth… advancing Droplet Digital PCR… lung cancer ctDNA trial data highlights [platform’s] impact” .
  • CFO: “Updated 2025 guide… CN revenue −1% to +1.5%; Life Science flat to down 3%; Diagnostics +0.5% to +2.5%; tariffs imply ~130 bps OM headwind; non‑GAAP GM 53–54.5%; non‑GAAP OM 10–12%” .

Q&A Highlights

  • Tariffs: Surcharges embedded in guidance; pricing adjustments possible, but customer budgets constrain pass‑through; products into China partly mitigated by non‑US sourcing (Europe, Singapore) .
  • Demand trajectory: Ramp is modest (Q1→Q2→Q3 relatively flat; uptick in Q4); process chromatography consistent; elongated instrument cycles but maintained win rates .
  • China diagnostics: Mid‑to‑high single‑digit negative vs plan; monitoring tariff scope; quality systems likely excluded .
  • Free cash flow: Confidence tied to working capital (inventory, DSO) and supplier management; FY FCF range reiterated .
  • Capital allocation: Appetite for larger transactions (“in the B range”) while continuing buybacks .

Estimates Context

  • Q1 2025 delivered an across‑the‑board beat vs S&P Global consensus: non‑GAAP/Primary EPS $2.54 vs $1.78 (+$0.76), revenue $585.4M vs $573.2M (+$12.2M), EBITDA ~$95M vs ~$84.1M (+$10.9M). Expect upward estimate revisions on 2025 gross margin and tax rate, but revenue and OM may edge lower given guidance reset (tariffs and demand softness) .
    Note: Estimates retrieved from S&P Global.

Key Takeaways for Investors

  • Strong Q1 execution against consensus with non‑GAAP EPS, revenue, and EBITDA beats; cost discipline provides cushion amid macro uncertainty .
  • Guidance reset reframes 2025: tariffs (130 bps OM) and market softness (100 bps OM) drive lower gross/operating margin ranges; watch mitigation efficacy (surcharges, supply chain regionalization) .
  • Life Science softness centered on instruments (academia/biotech); consumables resilient; process chromatography normalization supports 2H trajectory .
  • Diagnostics steady ex‑China; quality control product demand offsets reimbursement pressure; tariff scope on quality systems being clarified .
  • Cash discipline intact: FCF target maintained, strong Q1 cash generation, continued buybacks provide downside support .
  • Strategic optionality: ddPCR portfolio expansion and pending Stilla acquisition broaden addressable market; potential for larger M&A levered by balance sheet .
  • Trading lens: Near‑term sentiment balances beat/buybacks against lowered outlook/tariff overhang; inflection indicators include academic funding clarity (NIH), process chromatography orders, and tariff mitigation progress .