Q1 2025 Earnings Summary
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue Growth (YoY) | Q1 2025 | “Low single-digit growth” | +4.5% YoY (from US$276.935MIn Q1 2024 to US$289.458MIn Q1 2025) | Met |
Operating Margin (YoY diff) | Q1 2025 | “First half adjusted operating margin ~200–300 bps lower YoY” | Operating margin went from ~20.2% (55,862 ÷ 276,935)In Q1 2024 to ~13.8% (39,987 ÷ 289,458)In Q1 2025, ≈640 bps decline | Missed |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
China market and stimulus | Q4 2024: Stabilizing, reagents in double digits; instrument sales down; pickup expected in Q1 2025. Q3 2024: Challenging funding; mid-single-digit decline; expecting $70B stimulus. Q2 2024: Down over 20% YoY; gradual recovery anticipated; building local GMP facility. | 9% of global revenue, down low double digits; instrument business hit hardest; stimulus expected to shift from negative to modestly positive growth by Q3 FY25. | Continued cautious improvement, with near-term negativity but upside from upcoming stimulus |
Cell and gene therapy | Q4 2024: Mid-single-digit growth, biotech funding headwinds; new GMP facility in Bristol. Q3 2024: 30%+ growth; record quarter; Wilson Wolf synergy. Q2 2024: Funding challenges but focusing on DMFs and GMP expansions. | GMP reagents up over 60%; 400 customers in funnel; strong Wilson Wolf synergy; broad momentum despite market constraints. | Momentum remains strong, synergy with Wilson Wolf continues to fuel growth |
Diagnostics and Spatial Biology | Q4 2024: 9% organic growth; Lunaphore integration; margin at 12.5%. Q3 2024: 16% YoY growth; 9.3% margin; COMET demand outpacing capacity. Q2 2024: 11% growth; 6% margin; COMET backlog. | 14% reported and organic growth to $83.2M; ExoDx Prostate driving Diagnostics; COMET with multiomic RNA/protein capabilities; segment margin improved to 5.1%. | Continued expansion with higher margins and strong COMET demand |
ExoDx Prostate test & ESR1 test | Q4 2024: ExoDx volumes +35%, ESR1 kits in development. Q3 2024: ExoDx +25%, no ESR1 mention. Q2 2024: ExoDx +30%, no ESR1 mention. | ExoDx up 40%; ESR1 (exosome-based) launching via Asuragen channel. | ExoDx remains strong; ESR1 is a newer exosome-based test expanding the molecular diagnostics pipeline |
Wilson Wolf investment | Q4 2024: 3% share of Wilson Wolf’s net income recognized. Q3 2024: 14% growth, high margins (72%), strategic CGT synergy. Q2 2024: Challenging 2023 but returned to profitability; full integration by end of 2027. | 20% stake; >30% growth in quarter; synergy via OPEC GMP cytokines; G-Rex used in 45% of clinical trials; full buyout by 2027 or earlier. | Accelerating growth after prior slowdown; remains crucial for cell & gene therapy strategy |
Operating margins & profitability | Q4 2024: 33.5% adjusted margin, -360 bps YoY, improvement expected in second half FY25. Q3 2024: 33% margin, +290 bps sequentially. Q2 2024: 30.1% margin, -540 bps YoY, expected low point. | 29% adjusted margin, down 240 bps YoY; adverse mix and incentive comp accrual; Diagnostics margin up to 5.1%. | Margins under pressure from compensation and mix; improvement forecast in H2 FY25 |
Large pharma R&D spending | Q4 2024: Major R&D budget recalibrations; potential realignment by end of 2024. Q3 2024: No specific mention. Q2 2024: Little direct mention, references to large pharma constraints. | Stable after earlier budget drop-off; no major near-term shift seen; could pick up around April-May 2025. | Stabilizing at lower levels, modest optimism for slight rebound in late FY25 |
Biotech funding environment | Q4 2024: Multi-year lows but modest recovery in first half 2024. Q3 2024: Possible recovery from 8-year low, still uncertain. Q2 2024: Very soft, near lowest since 2016. | Early signs of improvement; stabilizing; beneficial for cell & gene therapy growth. | Gradual recovery from lows, fueling growth especially in CGT |
Protein Sciences | Q4 2024: -3% organic, impacted by China & pharma, strong consumables. Q3 2024: -2% YoY but sequential improvement; 44.2% margin. Q2 2024: -4% organic, 40.3% margin, biotech & China headwinds. | 1% organic growth (improvement vs. declines); 39.4% margin (-380 bps YoY); strong CGT offsetting China/biopharma challenges. | Modest rebound after consistent declines, driven by CGT adoption |
Instrument sales & capital constraints | Q4 2024: Instrument sales under pressure, consumables strong, China stimulus in 2025. Q3 2024: Double-digit Simple Western growth, capital constraints in China. Q2 2024: Decline in placements due to funding, strong consumables. | Ongoing China instrument softness; stimulus tender expected in Q3 FY25; large pharma budgets stable; capital environment still cautious. | Challenging capital environment persists; potential lift from China stimulus |
Simple Western platform | Q4 2024: Double-digit growth; introduced LEO (up to 100 samples/3 hours). Q3 2024: Double-digit expansion, broad adoption. Q2 2024: No specific mention. | Mid-single-digit growth; new LEO high-throughput system to launch in 2H FY25; <20% market penetration. | Strong recurring demand, upcoming LEO expected to expand reach |
COMET spatial biology platform | Q4 2024: Demand exceeded capacity; launched RNAscope HiPlex; up to 24 markers. Q3 2024: Production backlog, multiomic approach, backlog clearing in early FY25. Q2 2024: Automated high-plex instrument with backlog; pending multiomics workflow. | High demand, capacity ramped up; can detect 24 proteins & 12 RNA in one run; ASP $350k; aimed at multiomic research. | Robust market traction as manufacturing scales; multiomic features drive future growth |
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Sustainability of Growth in Diagnostics and Spatial Biology
Q: Is the momentum in diagnostics and spatial biology sustainable?
A: Management believes the momentum is sustainable, citing strong adoption of the ExosomeDx prostate test with plenty of runway for market penetration. Upcoming launches, such as the ESR1 breast cancer treatment resistance test through the Asuragen channel, are expected to further drive growth. In spatial biology, the Comet platform is experiencing strong instrument adoption, and they anticipate increased consumable sales enabled on the instrument. -
Cell and Gene Therapy Growth
Q: Can you elaborate on the cell and gene therapy growth and customer metrics?
A: The cell and gene therapy segment is showing great momentum, with over 400 customers, including 58 in various stages of clinical trials. Customers are progressing through the funnel, leading to increased order sizes, and there's broad growth from both large and smaller customers. -
Biotech and Biopharma Spending Trends
Q: What are you seeing in biotech and biopharma improvements?
A: There is a notable pickup in spending, particularly in cell and gene therapy, which saw very strong, broad-based growth. Management monitors daily run rates and observed that smaller biotech growth rates not only stabilized but started to pick up, a trend that continued into October. This indicates that biotech funding is beginning to translate into spending. -
China Market Trends
Q: How is China revenue performing, and what is the impact of tender activity?
A: China accounts for about 9% of global revenues, with a typical mix of 50% instruments and 50% consumables. Recent tender activity is leading to increased inquiries, particularly for automated Western blot instruments. Management expects this activity to shift China from declining growth to modest positive growth in Q3. -
Margin Outlook and Cost Management
Q: What is the outlook on margins and cost management?
A: Incentive compensation headwinds are stronger in Q2 due to previous accrual reversals. Merit increases also present a slight headwind. Management is implementing productivity initiatives and prioritization to protect the bottom line, expecting positive margin expansion in the back half of the fiscal year, assuming growth materializes as predicted. -
Performance of Wilson Wolf Investment
Q: How did Wilson Wolf contribute to the quarter?
A: Wilson Wolf, in which the company owns 20%, delivered a strong quarter with over 30% growth. This contributed to positive other income during the quarter. -
Outlook for Q2 and Fiscal Year
Q: What is the growth outlook for Q2 and the rest of the fiscal year?
A: Management anticipates mid-single-digit growth in Q2. Factors such as stronger incentive comp headwinds and merit increases may impact margins. Growth drivers include gradual improvement in the biotech segment and potential benefits from China tender activity in the latter half of the fiscal year. -
Academic End Market Performance
Q: How did the academic end market perform?
A: The academic segment showed strong growth across product lines and regions, including Europe and the U.S., despite challenging comparisons. Funding is flowing into areas like cancer and neuroscience, which align with the company's product offerings. -
Comet Instrument Performance
Q: What is the status of the Comet instrument rollout and expectations for pull-through?
A: The Comet instrument has an average selling price of around $350,000 and has met launch expectations with strong adoption. Manufacturing capacity has been increased to meet demand. The company is enabling consumables, including RNA-scope, on the instrument, which is expected to bolster growth. -
Molecular Diagnostics and Partnerships
Q: Any updates on molecular diagnostics partnerships, especially with Exosome Diagnostics?
A: An agreement with Thermo Fisher around a kidney rejection test is progressing, with teams working on the assay. The company is focusing on creating exosome-based tests to market through the Asuragen channel, starting with the ESR1 breast cancer test. -
Pharma Spending Trends
Q: What are the trends in pharma spending?
A: Large pharma spending has been stable but without significant change. Earlier in the year, larger pharma customers reduced run rates, but spending has remained steady sequentially. Management does not expect major changes until new budgets are released in 2025.
Research analysts covering BIO-TECHNE.