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BIO-RAD LABORATORIES, INC. (BIO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $667.5M, down 2.0% year over year as Life Science softness persisted; non-GAAP EPS was $2.90 vs $3.10 in Q4 2023, while GAAP EPS swung to a loss due to Sartorius mark-to-market .
  • Clinical Diagnostics grew modestly (+0.9% YoY) on quality control and blood typing demand; Life Science declined (-5.5% YoY) amid ongoing biopharma weakness and soft academia demand .
  • Management introduced FY 2025 guidance: non-GAAP, currency-neutral revenue growth of ~1.5–3.5% and non-GAAP operating margin of ~13.0–13.5%; Q1 2025 is expected down 5–7% YoY, with sequential improvement thereafter .
  • Strategic actions: a binding offer to acquire Stilla Technologies to broaden digital PCR coverage and a restructuring (≈5% workforce reduction) expected to save $50–55M in 2025 and $60–65M in 2026, supporting margin trajectory .

What Went Well and What Went Wrong

What Went Well

  • Clinical Diagnostics delivered growth (+0.9% YoY) with strength in quality control and blood typing; management noted “normalized growth rate” and margin improvements from transformation initiatives .
  • Non-GAAP gross margin improved to 55.0% for FY 2024 (from 54.2%), driven by operational improvements and favorable mix; Q4 non-GAAP operating margin was 13.8% despite macro headwinds .
  • Strategic portfolio progress: binding offer for Stilla (next-gen digital PCR), ddPCR consumables demand in low-double-digits, and continuum/QX600 updates—“would allow us to serve the full range of digital PCR applications” .

What Went Wrong

  • Life Science declined 5.5% YoY in Q4 on biopharma and academic softness; instrumentation demand remained weak, limiting ddPCR growth (guided ~1–2% for 2025) .
  • China reimbursement changes for diabetes testing reduced Q4 diagnostics revenue by mid-single-digit millions and compressed gross margin by ~75 bps; 2025 diagnostics growth outlook includes ~60 bps headwind from this change .
  • GAAP results were heavily impacted by equity security fair-value changes (Sartorius), driving a Q4 GAAP net loss of $715.8M vs GAAP net income in Q3 (gain) and a large loss in Q2; this volatility complicates GAAP comparability .

Financial Results

Key Metrics (Quarterly trend, oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$638.5 $649.7 $667.5
GAAP Gross Margin %55.6% 54.8% 51.2%
Non-GAAP Gross Margin %56.4% 55.6% 53.9%
GAAP Operating Margin %15.9% 9.9% 8.7%
Non-GAAP Operating Margin %16.8% 11.3% 13.8%
GAAP Diluted EPS ($)$(76.26) $23.34 $(25.57)
Non-GAAP Diluted EPS ($)$3.11 $2.01 $2.90

Q4 Year-over-Year

MetricQ4 2023Q4 2024YoY Change
Revenue ($USD Millions)$681.2 $667.5 -2.0%
GAAP Gross Margin %53.8% 51.2% -260 bps
Non-GAAP Gross Margin %54.4% 53.9% -50 bps
GAAP Operating Income ($M)$95.3 $58.4 -$36.9M
Non-GAAP Operating Income ($M)$105.3 $92.1 -$13.2M
GAAP Diluted EPS ($)$12.14 $(25.57) swing to loss
Non-GAAP Diluted EPS ($)$3.10 $2.90 -$0.20

Segment Breakdown (Quarterly trend)

Segment Revenue ($USD Millions)Q2 2024Q3 2024Q4 2024
Life Science$250.5 $260.9 $275.0
Clinical Diagnostics$387.9 $388.8 $392.5

KPIs and Balance Sheet Highlights

KPIQ3 2024Q4 2024FY 2024
Free Cash Flow ($USD Millions)$39 (Q4’23 ref); $81 Q4’24 $81 ~$290
Inventory ($USD Millions)$804 $760 —
Cash + Short-term Investments ($USD Billions)$1.628 $1.665 —
Share Repurchases ($USD Millions)——$202; remaining authorization ~$577
Non-GAAP Gross Margin %55.6% 53.9% 55.0%

Note: GAAP net income/loss volatility in 2024 driven by fair-value changes in equity securities (Sartorius AG) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth (non-GAAP, currency-neutral)FY 2025N/A (initial)~1.5%–3.5% Initiated
Operating Margin (non-GAAP)FY 2025N/A (initial)~13.0%–13.5% Initiated
Gross Margin (non-GAAP)FY 2025N/A55.0%–55.5%; exit year high-55% Initiated
Q1 Revenue (reported)Q1 2025N/Adown ~5%–7% YoY Initiated
Life Science Growth (currency-neutral)FY 2025N/A~1.5%–3.5% Initiated
Process ChromatographyFY 2025N/Ahigh-single-digit growth Initiated
Clinical Diagnostics Growth (currency-neutral)FY 2025N/A~2%–3%; ~100 bps donor screening exit headwind; ~60 bps China reimbursement headwind Initiated
Tax Rate (non-GAAP)FY 2025N/A~23% Initiated
CapEx ($USD Millions)FY 2025N/A~$160–$180 Initiated
Free Cash Flow ($USD Millions)FY 2025N/A~$310–$330 Initiated
Restructuring Savings ($USD Millions)FY 2025N/A~$50–$55 (2025); ~$60–$65 fully annualized in 2026 Initiated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Biopharma/Life Science demandConstraints in biotech/biopharma, more modest recovery pace; Life Science -16.5% YoY in Q2 Life Science -5.5% YoY in Q4; instruments soft; gradual recovery expected in 2025 Gradual improvement; still soft
Clinical Diagnostics demand+2.1% YoY in Q2; strength in QC and blood typing +0.9% YoY; China reimbursement hit diabetes testing; EMEA/Americas up Stable growth with China headwind
China reimbursementNot a factor in Q2/Q3 releasesDiabetes testing rate cut pulled into Q4; ~mid-teens 2025 impact; ~60 bps margin headwind New headwind introduced
Process ChromatographyWeak; destocking ongoing in 2024 ~50% decline FY 2024; guides high-single-digit growth FY 2025 Rebound expected
ddPCRPlatform/assay expansion; QX600 Consumables strong; ddPCR revenue growth guided ~1–2% FY 2025; Stilla to broaden portfolio Consumables resilient; instruments lag
Cost actionsShare repurchase authorization +$500M in Q2 ~5% workforce reduction; $50–55M savings in 2025 Cost base streamlined
R&D executionOne-time IPRD; Sabre Bio acquisition Additional ~$10M IPRD in 2025 (Sabre earn-out) Elevated IPRD in 2025
FX headwindsNot highlighted in Q2 releaseFY 2025 ~$70M revenue headwind; ~40 bps operating margin drag Incremental 2025 headwind
Capital allocation/M&AQ2 buyback authorization; smaller investments Binding offer for Stilla; potential accretive 18–24 months post-close Active portfolio shaping

Management Commentary

  • “Bio-Rad demonstrated resilience and adaptability in 2024… Clinical Diagnostics returned to a more normalized growth rate, and… cost management helped improve our gross margins.” — Norman Schwartz, CEO .
  • “We successfully met our revised 2024 guidance… achieved gross margin expansion… lean initiatives and supply chain execution… will be sustained improvements in our P&L in 2025.” — Jon DiVincenzo, COO .
  • “We are continuing to proactively manage our cost structure including the recent implementation of a 5% workforce reduction… should yield savings of $50–$55M in 2025… $60–$65M in 2026.” — Roop Lakkaraju, CFO .
  • “Stilla’s next-generation digital PCR solutions would make a compelling and complementary addition… [to] expand our business into applied research and clinical diagnostics…” — Norman Schwartz, CEO .

Q&A Highlights

  • ddPCR outlook: guided ~1–2% growth with strong consumables but soft instruments tied to biopharma/academia demand .
  • Process chromatography: declined ~50% in Q4/FY 2024; management feels “pretty strong” about high-single-digit growth in 2025 on destocking and customer dialogue .
  • Operating margin bridge FY 2025: ~60 bps China reimbursement + ~40 bps FX + 40 bps additional IPRD ($10M) = ~140 bps headwind; restructuring offsets merit/OpEx rollover .
  • Q1 2025 phasing: revenue down ~5–7% YoY (all-in, includes FX), then sequential improvement; downtick roughly even across segments .
  • China diabetes reimbursement: mid-teens annualized revenue impact; not expected to spread to other areas currently .
  • Stilla financials: has revenue; expected accretive within ~18–24 months post-close; expands Bio-Rad’s digital PCR market coverage without cannibalization .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to data access limits at the time of this analysis. As a result, beat/miss versus consensus cannot be determined. Values would have been retrieved from S&P Global if available.
MetricQ4 2024 ActualS&P Global ConsensusComparison
Revenue ($USD Millions)$667.5 Unavailable*N/A
Non-GAAP Diluted EPS ($)$2.90 Unavailable*N/A

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Expect a softer Q1 (down ~5–7% YoY) with sequential improvement; trading catalysts include evidence of biopharma/academia recovery and progress on gross margin exiting at high-55% .
  • Margin setup: Despite ~140 bps headwinds (China reimbursement, FX, IPRD), restructuring savings and mix could support FY 2025 non-GAAP OM ~13–13.5%; watch quarterly cadence and savings realization .
  • Diagnostics stability vs Life Science cyclicality: Diagnostics continues modest growth; Life Science hinges on instrument demand recovery; consumables remain resilient .
  • Process chromatography: After ~50% decline in 2024, high-single-digit growth guide is a key test of end-market normalization—monitor destocking and new program traction .
  • China risks priced into 2025: Diabetes reimbursement headwind (~60 bps margin, mid-teens revenue impact) embedded in guidance; limited expectation of spread to other tests for now .
  • Strategic optionality: Stilla acquisition and ddPCR roadmap (QX Continuum) broaden addressable market; accretion targeted 18–24 months post-close—execution and regulatory timeline are swing factors .
  • Capital returns: Robust FCF ($290M in 2024; guided $310–$330M in 2025) and remaining buyback authorization (~$577M) offer support while transformation progresses .