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    QIAGEN (QGEN)

    Q2 2024 Earnings Summary

    Reported on Feb 15, 2025 (After Market Close)
    Pre-Earnings Price$47.11Last close (Aug 1, 2024)
    Post-Earnings Price$47.84Open (Aug 2, 2024)
    Price Change
    $0.73(+1.55%)

    What went well

    • The company anticipates accelerated growth in the second half of 2024, driven by new product launches and contributions from key products like QIAstat-Dx and QuantiFERON, positioning QIAGEN to deliver on its expected three-year plan guidance.
    • QuantiFERON-TB continues to show double-digit growth, with significant room for expansion by converting the existing skin test market, reinforcing confidence in meeting or exceeding the $450 million guidance for 2024 despite potential competition.
    • Despite cautious capital spending in the life science market, the company expects conditions to normalize due to increased visibility on funding and ongoing innovation in areas like microbiome and minimal residual diseases, leading to anticipated growth in these segments.

    What went wrong

    • Increased competition in the QuantiFERON-TB market, as competitors like Revvity launch new workflows in the U.S. and China, which could impact QIAGEN's market share and future growth in this segment.
    • Cautious capital spending due to flat NIH budgets, leading to softness in capital equipment sales, which may negatively affect QIAGEN's instrument sales in the life sciences market.
    • Management anticipates the Sample Technologies market to grow at low single-digit rates for QIAGEN, indicating limited growth potential in this mature business segment.

    Q&A Summary

    1. H2 Growth Outlook and 2025 Guidance
      Q: How should we think about H2 growth and 2025 outlook?
      A: Thierry Bernard stated that QIAGEN is executing as planned, with a slower H1 and acceleration in H2, expecting 4% growth in Q3 and 5% in Q4, excluding NeuMoDx. New product approvals like the GI panel and QIAcuity Diagnostic in the U.S. will impact H2. This positions QIAGEN to deliver on the 7% long-term CAGR laid out in their Capital Market Day.

    2. Margin Outlook and NeuMoDx Impact
      Q: What is the margin outlook considering NeuMoDx phase-out?
      A: Roland Sackers explained there was no material impact from NeuMoDx on operational expenses in Q2 outside restructuring. The transition out of NeuMoDx will continue into mid-2025, with profitability improvements phasing in over time. They expect to reach at least a 28.5% EBIT margin for the full year, climbing close to 30% by year-end.

    3. QuantiFERON Performance and Competition
      Q: Can you discuss QuantiFERON's performance and competition?
      A: Thierry Bernard highlighted that QuantiFERON exceeded $100 million in sales for the fifth consecutive quarter, with double-digit growth. They are on track to achieve the $450 million guidance for 2024 and aim for $600 million by 2028 (7% CAGR). The main competition is the skin test market; potential competitors' products have not changed the growth paradigm.

    4. Portfolio Optimization and NeuMoDx Strategy
      Q: Are there plans to optimize other parts of the portfolio after NeuMoDx?
      A: Thierry Bernard confirmed the discontinuation of NeuMoDx and emphasized a focus on growth drivers since 2020. They continue to optimize the portfolio, actively looking to prune areas that no longer make sense for QIAGEN or could perform better elsewhere.

    5. China Market Exposure
      Q: How is the China market performing and what's the outlook?
      A: Thierry Bernard noted that China's contribution is less than 6% of sales. While the market remains challenging, QIAGEN is localizing activities and has a second brand in China. They do not expect structural improvement before the second half of 2025.

    6. Life Science Funding Trends
      Q: What's the outlook for life science customer spending?
      A: Thierry Bernard expects normalization as customers gain visibility on funding, with the NIH budget flat this year. He is confident the market will continue to grow, and the current caution in capital expenses is expected to be short-lived.

    7. Digital Insights (QDI) Growth
      Q: Can you discuss trends in Digital Insights and genomics?
      A: Thierry Bernard stated there's significant need for bioinformatics due to the explosion of genomics data. QIAGEN's combination of AI and manual curation makes them unique, and this activity is highly accretive at every level, including gross margin, EBIT margin, and EPS, while competitors are "bleeding money".

    8. QIAcuity Expansion and Growth
      Q: How is QIAcuity performing towards the $90 million target?
      A: Despite caution on capital spending, QIAcuity continues to grow, expanding into clinical diagnostics and pharma for companion diagnostics. They believe the $90 million guidance for 2024 is within reach. Consumables growth was above double-digit in Q2.

    9. QIAstat GI Panel Launch
      Q: What impact will the GI panel launch have on QIAstat?
      A: Thierry Bernard mentioned that QIAstat grew 12% in H1 without the GI panel. The GI panel launch in the U.S. will drive acceleration in H2, making QIAstat one of the main growth drivers.

    10. Sample Tech Returning to Growth
      Q: What drove the positive evolution in Sample Tech?
      A: The growth was mainly driven by performance in automated Sample Tech, validating the strategy to upgrade instruments. They see this market as low single-digit growth but will continue developing added-value applications in areas like liquid biopsy and microbiome.

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