Executive Summary

Q3 2024 returned to growth: revenue $155.0M (+10% y/y), adjusted EPS $0.43 (vs $0.23 y/y), and adjusted gross margin 50.7% (+870 bps y/y) amid stronger CDMO, consumables and equipment demand .
Orders outpaced sales by 4% and management highlighted a healthier funnel; new modalities posted record sales (+~20% y/y), and CDMO revenue and orders grew ~20% y/y, reinforcing recovery breadth .
FY24 guidance narrowed with midpoint effectively unchanged for revenue ($630–$639M) but raised on non-GAAP EPS ($1.50–$1.58 from $1.42–$1.49) and gross margin (49.5–50.5% from 49–50%), reflecting restatement impacts and operating execution .
Key watch items: China remains a ~$20M FY headwind (~3–4% of sales), emerging biotech demand is still soft, and GAAP results include a one-time $17.4M CEO transition stock comp charge in Q3 .

What Went Well and What Went Wrong

What Went Well

Broad-based momentum: “strong third quarter results” with 10% y/y sales growth; orders > sales by 4%; sequential growth in non‑COVID sales (+3%) and orders (+2%) .
New modalities and CDMOs: record new modality revenue (+~20% y/y) and CDMO revenue and orders up ~20% y/y; management: “we achieved record sales in the quarter… continued strength in Filtration, consumables, and Pharma” .
Margin expansion: adjusted gross margin 50.7% in Q3 (up 8.7 pts y/y), with QTD adjusted operating margin 14.9% and adjusted EBITDA margin 20.7%, aided by productivity and mix .

What Went Wrong

China softness: Q3 China down ~50% y/y, 3% of Q3 sales; FY24 China now ~4% of sales and ~$20M revenue headwind .
Emerging biotech: continued weakness in early-stage demand; management cited declining biotech funding and fewer U.S. clinical trial starts, pressuring that subsegment .
GAAP headwinds/non-recurring items: GAAP operating loss (–5.1% margin) in Q3, largely from $17.4M incremental CEO transition stock comp within SG&A, and $2.6M restructuring charges (excluded from non-GAAP) .

Financial Results

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($USD Millions)	$151.346	$154.0	$154.871
GAAP Diluted EPS ($)	$0.04	N/A	($0.01)
Adjusted Diluted EPS ($)	$0.28	$0.33	$0.43
GAAP Gross Margin (%)	49.5%	N/A	50.0%
Adjusted Gross Margin (%)	48.6%	49.6%	50.7%
GAAP Operating Margin (%)	1.3%	N/A	(5.1)%
Adjusted Operating Margin (%)	7.8%	~10%	14.9%
Adjusted EBITDA Margin (%)	13.4%	~15%	20.7%
Cash & Equivalents ($USD Millions)	$780.6	$809.0	$784.0

Selected Q3 operating KPIs and mix:

Orders vs sales: orders > sales by 4% .
Segment/market color: Consumables revenue +10% y/y; equipment +mid-single-digit y/y; filtration revenue +mid-teens y/y; chromatography orders +35% y/y; new modalities +>20% y/y .
Regional: Americas revenue +mid-teens y/y; Asia ex‑China +>40% y/y; China ~3% of Q3 sales, down ~50% y/y .

Guidance Changes

Metric	Period	Previous Guidance (May 1, 2024)	Current Guidance (Nov 12, 2024)	Change
Total Reported Revenue	FY 2024	$620M – $650M	$630M – $639M	Narrowed range; midpoint ~unchanged
YoY Revenue Change	FY 2024	(3%) – 2%	0% – 1%	Raised
Gross Margin (Adj/GAAP)	FY 2024	49% – 50%	49.5% – 50.5%	Raised 50 bps
Income from Operations (Adjusted)	FY 2024	$83M – $88M	$80M – $85M	Lowered
Operating Margin (Adjusted)	FY 2024	13% – 14%	12.5% – 13.5%	Lowered
Adjusted EBITDA Margin	FY 2024	18% – 19%	17.5% – 18.5%	Lowered
Other Income (Adjusted)	FY 2024	$18M – $19M	~$27M	Raised
Adjusted Effective Tax Rate	FY 2024	~21%	~20%	Lowered
Adjusted Net Income	FY 2024	$80M – $84M	$85M – $89M	Raised
Adjusted EPS (Diluted)	FY 2024	$1.42 – $1.49	$1.50 – $1.58	Raised
GAAP EPS (Diluted)	FY 2024	$0.51 – $0.58	$0.25 – $0.32	Lowered

Management noted the restatement shifted ~$7M of revenue into FY24 and raised gross margin guidance due to mix effects, while maintaining the revenue midpoint and modestly increasing adjusted operating margin vs July’s update .

Earnings Call Themes & Trends

Topic	Q1 2024 (May)	Q2 2024 (Jul)	Q3 2024 (Nov)	Trend
CDMO recovery	No “sticky” rebound; lumpiness at top accounts	Tier-2 CDMO orders up >20% q/q; B2B >1.4 for CDMO	CDMO revenue & orders +~20% y/y; sustained breadth across Tier-1/2	Improving breadth; sustained into H2
Consumables destocking	Destocking “behind us” outside Proteins	Consumables orders +20% 1H; momentum continues	Consumables revenue +10% y/y; orders highest since Q1’22	Momentum sustained
Capital equipment	Weak in Q1; RS10 launched	Orders +20% q/q; recovery expected H2	Sales up mid-single-digit y/y; strong funnel; platforming at big pharma	Gradual recovery with better funnel
New modalities	Revenue +>15% y/y; top 20–25 accounts driving	Orders +>40% y/y; 1H revenue +>10%	Record quarter; +>20% y/y; tracking ~20% of FY revenue	Clear growth driver
China	Weakness persists	Guidance cut: China ~$25M FY (~4%)	Q3 China ~3% of sales; FY headwind ~$20M; down ~50% y/y	Continued headwind
Proteins	Headwind (~$32M) expected	Headwind ~constant; 2025 rebound expected	Still ~$32M headwind; planning rebound via Tantti/Avitide	Headwind in 2024; recovery setup
Margins	FY adj GM 49–50%; productivity offsets mix	Q2 adj GM 49.6%; FY adj OI margin 12–13%	Q3 adj GM 50.7%; FY adj GM 49.5–50.5%	Expanding in H2
M&A / Portfolio	Metenova integration; RS10 launch	Tantti announced; resin roadmap with Purolite	Pending Tantti close Q4; first resin launch Q4	Building purification stack

Management Commentary

CEO: “I’m pleased to report strong third quarter results… In new modalities, we achieved record sales… We are… narrowing the 2024 revenue guidance… maintaining the midpoint” .
CEO on orders and funnel: “orders pacing above sales by 4%… non‑COVID sales up 3% versus last quarter and orders up 2%… record revenue quarter for new modalities” .
CFO on margins: “third quarter 2024 adjusted gross margin is 50.7%… up 8.7 percentage points versus last year… adjusted operating income margins… nearly 15%” .
CFO on cash and Q4: Cash $784M after note settlement; implied Q4 adjusted op margin “just over 15%” and Q4 base revenue growth ex‑COVID “12%–13%” .
Strategy: Key account program now covers 20 top accounts, driving platform wins and consumable pull-through on systems (e.g., FlowVPX, ATF) .

Q&A Highlights

Q4 ramp mechanics: Normal seasonality (Q4 strongest), stronger October orders, book-to-bill >1 supports H2 revenue skew .
Equipment funnel velocity: Mid-single-digit sequential growth in equipment; platforming at big pharma; typical 3–6 months for smaller hardware cycles, 6–9 months for larger .
CDMO durability: Orders up mid-teens over last two quarters vs prior-year; breadth across Tier-1 and Tier-2; some BioSecure Act tailwinds for U.S. smaller CDMOs .
2025 margin trajectory: Management still targets 100–200 bps annual gross margin expansion over next few years; expect additional operating leverage .
China/biotech: China remains ~3–4% of revenue with stimulus a potential help; emerging biotech demand is the softest area (funding, trial starts) .

Estimates Context

We attempted to retrieve S&P Global consensus for Q3 2024 (EPS and revenue), but the API returned a request limit error; therefore, Street comparisons are unavailable in this report. Values retrieved from S&P Global could not be displayed due to access limits.
Implications: Given raised FY24 adjusted EPS ($1.50–$1.58) and gross margin (49.5–50.5%) guidance and Q3’s higher non-GAAP profitability, sell-side models likely need to reflect higher FY24 non-GAAP earnings and slightly better margin mix, while GAAP EPS is lower due to the one-time CEO transition stock comp .

Key Takeaways for Investors

Operating inflection: Q3 showed resumed growth and meaningful margin expansion, with orders > sales, record new modalities, and improving equipment/CDMO trends—constructive for Q4 setup and 2025 entry .
Guidance quality improved: Range tightened, midpoint intact, non‑GAAP EPS and GM raised; restatement lifted 1H mix and supports margin math even as GAAP reflects one‑time CEO stock comp .
Mix tailwinds: Platforming wins at large pharma and expanding key accounts should drive recurring consumables (ATF/FlowVPX/RS systems), supporting durability in margins and growth .
Watch China/biotech: China remains a modest (~4%) but volatile exposure; emerging biotech softness is the main demand risk, partially offset by CDMO breadth and stimulus/BioSecure dynamics .
2025 margin path: Management reiterates 100–200 bps annual gross margin expansion potential with additional operating leverage as volume recovers; Q4 implied adjusted op margin >15% offers a solid jump-off .
Proteins headwind contained in 2024: ~$32M drag remains, but integration of Tantti/Avitide with OPUS positions portfolio for recovery in 2025+ .
Trading setup: Near-term catalysts include Q4 seasonal strength, closing and initial contribution of Tantti, and early proof points on platform wins translating to consumables pull-through; risks remain around China cadence and early‑stage biotech demand .

Appendices

Q3 2024 Franchise/Region Highlights (selected)

Area	Q3 2024 Commentary
New Modalities	Record revenue; +>20% y/y; tracking ~20% of FY revenue .
CDMO	Revenue and orders +~20% y/y; strongest level in 18 months .
Consumables	Revenue +10% y/y; orders highest since Q1’22 .
Equipment	Sales +mid-single-digit y/y; strong funnel; platforming at big pharma .
Filtration	Revenue +mid-teens y/y; ETF revenues +>50% .
Chromatography	Orders +35% y/y; two consecutive record quarters for order intake .
Americas	Revenue +mid-teens y/y .
Asia ex‑China	Revenue +>40% y/y .
China	~3% of Q3 sales; down ~50% y/y; FY headwind ~$20M (~4% of sales) .

Non-GAAP adjustments (Q3 examples)

CEO transition incremental stock comp $17.379M in Q3 (excluded from non‑GAAP); restructuring Q3 ~$2.6M (cash) .
Comprehensive reconciliations provided in 8‑K Exhibit 99.1 tables (EPS, operating income, EBITDA, COGS, SG&A) .

REPLIGEN CORP (RGEN)·Q3 2024 Earnings Summary