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ORASURE TECHNOLOGIES INC (OSUR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $37.4M, down 51% year-over-year as COVID revenues collapsed, while core revenue rose 10% to $36.5M; GAAP EPS was $(0.14) and non-GAAP EPS was $(0.06) .
  • Diagnostics revenue grew 9% YoY to $18.8M and Sample Management Solutions grew 14% YoY to $14.8M; international diagnostics delivered a record year, though donor-funding uncertainty (PEPFAR/Global Fund/NIH) introduces near-term risk .
  • Q1 2025 guidance: total revenue $27.5M–$31.5M; core $27M–$31M (incl. ~$1M Risk Assessment), COVID ~$0.5M; gross margin expected in the low 40s, expanding through 2025 toward ~50% adjusted GM on efficiency initiatives .
  • Strategic catalysts: acquisition of Sherlock Biosciences (CT/NG OTC molecular self-test submission targeted by end-2025), FDA label expansion for HIV self-test to ages 14+, and BARDA-backed Marburg antigen test award (~$7.5M base, up to $11M) .

What Went Well and What Went Wrong

What Went Well

  • Core revenue +10% YoY to $36.5M, with Diagnostics +9% and Sample Management +14%; CEO: “We made tremendous progress in our strategic transformation in 2024…” .
  • International Diagnostics delivered strong performance; CEO: “2024 was a record year for revenue from that business, surpassing OTI’s prior high set in 2023” .
  • Operational execution toward margin expansion (packaging waste reduction, reel-to-reel automation, insourcing manufacturing and critical reagents); CFO targets adjusted GM improving from 44.4% in 2024 toward ~50% in 2025 .

What Went Wrong

  • Total revenue down 51% YoY to $37.4M as COVID revenues fell 98% YoY, and GAAP gross margin dropped to 36.2% (non-GAAP 40.1%) versus 46%+ a year ago .
  • GAAP operating loss of $(12.4)M and non-GAAP operating loss of $(6.7)M, impacted by inventory write-downs tied to exiting Risk Assessment and one-time scrap expense; CFO confirmed scrap was separate from the non-GAAP inventory reserve .
  • Elevated uncertainty around donor-funded programs (PEPFAR waiver logistics, Global Fund dynamics) and NIH-related academic funding; management sized near-term Q1 impact at ~$1M plus “a couple of million” timing from a large consumer genomics customer .

Financial Results

Quarterly Performance (sequential)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$54.3 $39.9 $37.4
GAAP Gross Margin %45.4% 42.8% 36.2%
GAAP Operating Income (Loss) ($M)$(2.7) $(6.0) $(12.4)
GAAP EPS ($)$(0.01) $(0.06) $(0.14)
Non-GAAP EPS ($)$0.07 $(0.01) $(0.06)

Year-over-Year (Q4 2024 vs. Q4 2023)

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$75.9 $37.4
GAAP Gross Margin %46.3% 36.2%
GAAP Operating Income (Loss) ($M)$3.9 $(12.4)
GAAP EPS ($)$0.27 $(0.14)
Non-GAAP EPS ($)$0.18 $(0.06)

Segment Breakdown (Q4)

Segment ($USD Thousands)Q4 2023Q4 2024YoY %
Diagnostics$17,219 $18,768 +9%
Sample Management Solutions$13,044 $14,809 +14%
COVID-19 Diagnostics$41,617 $950 (98%)
Risk Assessment Testing$2,196 $2,055 (6%)
Other Products & Services$526 $636 +21%
Molecular Services$13,907 $1,705 (62%)
COVID-19 Molecular Products$47 $— (100%)
Total Net Revenues$75,881 $37,445 (51%)

KPIs and Balance Sheet Highlights

KPIQ3 2024Q4 2024
Cash & Cash Equivalents ($USD Thousands)$278,571 $267,763
Operating Cash Flow ($USD Millions)$12.7 $0.1
Core Revenue ($USD Thousands)$37,751 $36,482
Non-GAAP Operating Income (Loss) ($USD Thousands)$(2,698) $(6,745)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
Total RevenueQ4 2024$36M–$38M $37.4M actual Maintained; delivered within range
Core RevenueQ4 2024$35M–$37M $36.5M actual Maintained; delivered within range
COVID RevenueQ4 2024~$1M $0.95M actual In-line
Total RevenueQ1 2025N/A$27.5M–$31.5M New guidance
Core RevenueQ1 2025N/A$27M–$31M (incl. ~$1M Risk Assessment) New guidance
COVID RevenueQ1 2025N/A~$0.5M New guidance
GAAP Gross Margin %Q1 2025N/ALow 40s % New outlook
Adjusted Gross Margin %FY 2025N/AImproving from 44.4% in 2024 toward ~50% New outlook
Core OpExQ1 2025N/ALow $20M + ~$10M innovation spend (Sherlock $7M–$8M) New outlook

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Core Revenue TrajectoryQ2: Core $35.4M, sequential improvement ; Q3: Core $37.8M, (1%) YoY, sequential improvement Core $36.5M, +10% YoY Strengthening YoY, mix shift to core
Risk Assessment ExitInitiated exit; RA revenue $1.9M in Q3 “Significant progress” in exit; wind-down through H1 2025 Exit extended into H1 2025
Donor-Funding/Academic UncertaintyLimited prior disclosurePEPFAR waiver timing; ~80% of 2024 international diagnostics donor-funded; NIH indirect cost changes Elevated near-term uncertainty; quantified ~$1M Q1 impact
Margin Expansion InitiativesQ2: GM + efficiency gains ; Q3: GM down YoY on mix Packaging v2, reel-to-reel, insourcing; adjusted GM trending to ~50% in 2025 Structural tailwinds to margin
Tariffs & ReshoringNot highlightedReshored from Thailand; closed Belgium; moving Canada manufacturing to U.S.; tariffs not baked into outlook Reduced exposure; scenario planning
Sexual Health & Product MomentumQ2: HCV self-test WHO pre-qual; Syphilis momentum ; Q3: initial HCV orders International Diagnostics record year; multiproduct HIV/HCV/Syphilis success Building adoption
Innovation PipelineQ2: saliva liquid biopsy; Q3: blood proteomics H2’25 Sherlock CT/NG OTC molecular self-test submission by end-2025; Sapphiros blood collection in 2025 Accelerating new platforms
BARDA/Marburg—RRPV award ~$7.5M base, potential up to $11M; back-end loaded milestones to 510(k) Funded program underway
Consumer Genomics Customer Timing—Large customer timing uncertainty; “couple of million” sizing Near-term lumpiness

Management Commentary

  • CEO: “We delivered Q4 revenue that was in the top half of our guidance range… core revenue grew 10% year-over-year.”
  • CEO on international diagnostics: “2024 was a record year for revenue from that business, surpassing OTI’s prior high set in 2023.”
  • CFO on margin drivers: “Smaller HIV packaging… new reel-to-reel automation… ongoing insourcing… insourcing of critical reagents… adjusted gross margin to increase from the 44.4% we reported in 2024 towards our target of 50%.”
  • CEO on donor/academic uncertainty: “PEPFAR is where there's most uncertainty… we incorporated just under $1 million of that into the Q1 guidance.”
  • CEO on innovation: “Sherlock's first molecular self-test… is expected to be submitted to the FDA by the end of 2025.”

Q&A Highlights

  • Donor funding risks: Management prioritized monitoring PEPFAR; quantified ~<$1M Q1 impact; broader Global Fund support is multilateral and more durable; NIH indirect-cost changes monitored but limited direct near-term impact .
  • BARDA/Marburg: ~$7.5M base award, back-end loaded; pathway to potential ~$11M with milestones toward FDA 510(k) .
  • Gross margin cadence: One-time scrap from expired materials in Q4; multiple structural initiatives support expansion toward ~50% adjusted GM through 2025 .
  • Consumer genomics customer: Timing lumpiness due to strategic alternatives at a large customer; management sizing “a couple of million” variability in Q1 .
  • OpEx & Sherlock: Expect $20–$25M in 2025 for Sherlock (clinical/regulatory), Q1 innovation spend ~$10M with $7M–$8M tied to Sherlock .
  • Tariffs exposure: Reshoring efforts materially reduce exposure; tariffs not baked into outlook given uncertainty .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024, Q1 2025, FY 2025 was unavailable due to SPGI daily request limitations; as a result, comparisons to consensus cannot be provided at this time. Values would have been retrieved from S&P Global if available.

Key Takeaways for Investors

  • Core franchise resilience: Despite COVID headwinds, core revenue growth (+10% YoY) and record international diagnostics underscore durable demand across sexual health and SMS .
  • Margin expansion visibility: Concrete cost/productivity levers (packaging, automation, insourcing) support adjusted GM trajectory from 44.4% (2024) toward ~50% in 2025; monitor execution and volume ramp .
  • Near-term uncertainty: Donor-funded program timing and large consumer genomics customer lumpiness widen Q1 revenue range ($27.5M–$31.5M); sizing implies modest revenue volatility .
  • Strategic optionality: Sherlock acquisition positions OTI for OTC molecular testing in CT/NG with submission targeted by end-2025; potential 2026 revenue contribution contingent on regulatory approval .
  • Funded innovation: BARDA/RRPV-backed Marburg antigen test provides non-dilutive funding and leverages virology expertise; potential milestone-driven revenue over multi-year base period .
  • Risk assessment exit: Wind-down through H1 2025 removes a lower-margin, non-core business; watch for inventory and exit-related adjustments and core focus benefits .
  • Trading setup: Near-term stock reaction likely tied to donor funding clarity and confirmation of margin expansion cadence; positive catalysts include gross margin progress, international ordering normalization, and Sherlock regulatory milestones .