Q2 2025 Earnings Summary
- Strong growth in the cell and gene therapy segment, with over 500 customers relying on Bio-Techne's GMP reagents, including 85 in various phases of clinical trials, and 6 currently in Phase III. This robust pipeline is driving significant demand for GMP reagents, which increased over 90% in the quarter.
- Anticipated return to growth in China due to government stimulus, benefiting major product lines. The company expects China to shift to modest positive growth in fiscal Q3 as the stimulus program and improvement in government funding materialize.
- High interest and strong growth rates in the COMET platform and spatial biology franchise. The company reports that the interest in COMET remains very high, with growth rates still very strong, indicating continued expansion in this innovative segment.
- Growth in GMP reagents is expected to slow down due to the lumpiness of orders and the timing of large orders that may not repeat in the next quarters. The company acknowledged that while they experienced strong growth in GMP reagents in Q2, it will "definitely not be the large contributor to growth that it was this quarter."
- The run rate business is lagging and performing closer to the overall market, relying heavily on growth vectors to drive differentiation and acceleration. This suggests that the core business may not be driving significant growth on its own.
- China sales declined low single digits in the quarter, and although an improvement is expected, ongoing economic challenges and funding issues could continue to impact growth in this important market. The company stated that growth was "very stable at low single-digit declines in China."
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +9% | The new product launches and increased demand from biopharma drove higher sales, offset partially by cautious spending in certain geographies. Continued operational efficiencies also helped expand reach into academic and industrial customers. |
Protein Sciences Revenue | +7% | Growth was fueled by strong adoption of GMP proteins and steady core assay sales, despite lingering funding challenges in China. The product pipeline remained robust, supporting modest organic expansion in the segment. |
United States | +8% | Improved funding in academia and partial recovery in biotech orders led to resilient performance. However, customer budget discipline lingered, keeping growth at single digits. |
EMEA | +12% | Commercial execution and strong end-market demand—especially from academic and translational research—boosted sales. The region also benefited from organizational improvements enacted in prior quarters, building on the momentum from high comps in the last period. |
United Kingdom | +24% | The steep increase was driven by new customer wins and targeted expansion in government-funded and commercial research accounts. Some carryover of project backlogs from earlier quarters also contributed to the elevated growth rate. |
Rest of World | +20% | Regions outside North America and EMEA benefited from targeted distribution partnerships and rising demand in emerging markets. Although smaller in revenue share, these markets showed notable double-digit increases from a relatively low base. |
Operating Income (EBIT) | +25% | Higher sales volume and disciplined cost controls improved operating leverage. Previous investments in manufacturing efficiencies and selected restructuring actions also optimized margin performance. |
Net Income | +27% | Driven by improved EBIT, alongside a favorable effective tax rate relative to the prior year. Additionally, lower restructuring impacts and robust top-line growth further supported net profitability. |
Diluted EPS | +22% | The stronger net income and slightly reduced share count lifted EPS, reflecting both the improved profit margins and shareholder return initiatives like share repurchases in earlier quarters. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue growth | Q3 2025 | no prior guidance | mid single-digit (upper range) | no prior guidance |
Revenue growth | Q4 2025 | high single-digit | high single-digit | no change |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q2 2025 | Expected mid-single-digit year-over-year growth | 297.031MVs. 272.60MIn Q2 2024 → ~8.96% YoY growth | Beat |
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Cell & Gene Therapy Outlook
Q: How did the pull-forward impact cell and gene therapy growth?
A: Management noted that some large cell and gene therapy GMP protein orders were pulled into Q2, contributing about 2 points of overall growth. They grew about 90% on GMP proteins. While this drove several points of growth in Q2, they expect continued traction but not at the same elevated level next quarter. -
Margin Expectations for 2H
Q: What are the margin expectations for the second half?
A: They reaffirmed outlook for margin expansion, expecting 50 to 150 basis points improvement year-over-year despite a 50 basis point FX headwind. Volume leverage, mix improvement, and efficiencies will contribute to this expansion. -
Large Pharma & Biotech Recovery
Q: What's the recovery outlook for large pharma and biotech customers?
A: The biotech segment, about 30% of revenues, is recovering as expected. Large pharma showed better-than-expected recovery, contributing additional momentum in Q2. While not fully recovered, gradual improvement gives confidence for the second half. -
China Growth Expectations
Q: How is China performing and what's the outlook?
A: China experienced low single-digit declines but is expected to return to positive growth in Q3. Increased government funding activities are encouraging, and all three platforms are expected to be in a better position going forward. -
NIH Funding Impact
Q: Are there concerns about NIH funding affecting the business?
A: Management is not overly concerned. The U.S. academic market represents about 11% of revenues, with NIH exposure at mid-single digits, and direct NIH revenue less than 1%. January showed improvement in the academic market. -
M&A Strategy
Q: What's the updated M&A strategy given market conditions?
A: M&A remains a priority for capital deployment. They focus on areas like discovery of novel biological insights and analytical platforms supporting advanced therapeutics. With a strong balance sheet and capable management, they are well-positioned for new M&A activity. -
Wilson Wolf Performance
Q: How did Wilson Wolf perform, and can it be consolidated early?
A: Wilson Wolf's core growth aligns with earlier-stage cell and gene therapy growth. They have 5 customers commercialized, forecasting solid double-digit growth for calendar year 2025. No mention of early consolidation before 2027. -
AI Capabilities Advantage
Q: How do Bio-Techne's AI capabilities compare in the industry?
A: They believe their AI-engineered antibodies and proteins represent a step-change in innovation with sustainable advantages due to patentability. Combining internal know-how, extensive databases, and early AI investment uniquely positions them. Benefits include hyperactivity and enhanced receptor binding. -
Spatial Biology & COMET Platform
Q: What's the outlook for the COMET platform and multiomics?
A: The COMET platform shows positive traction. Recently launched multiomic capabilities allow analysis of 12 RNA targets and 24 protein targets simultaneously. High consumable pull-through is expected, positioning it as market-leading. -
Instrument Sales Resuming Growth
Q: Have instrument placements started growing again?
A: Yes, instrument placements returned to growth in Q2 after consistent double-digit consumables growth indicated capacity constraints. Growth was mainly in the protein analytical instrumentation portfolio, excluding the COMET platform. -
GMP Reagents Growth & Margins
Q: What are the growth expectations and margin profile for GMP reagents?
A: GMP reagents will grow but not at the elevated levels of the first half. It's a profitable business, nearly as profitable as core RUO reagents, and is the second most profitable product line. Mix changes aren't expected to significantly impact margins due to improvements in RUO business. -
Run Rate Business Performance
Q: How is the run rate business performing and trending?
A: The run rate business is performing closer to the overall market and is gradually improving. In a normalized mid-single-digit growth market, they expect it to be at least mid-single-digit, contributing to double-digit company growth due to growth vectors. -
NIH Exposure Quantified
Q: Can you quantify your NIH exposure?
A: Global academic market is 21% of revenues, U.S. portion about 11%, with NIH exposure at mid-single digits. Revenue directly from NIH is less than 1%. -
China Reagents vs. Instruments
Q: How did reagents perform versus instruments in China?
A: Growth was comparable between reagents and instruments, both experiencing low single-digit declines and expected to improve in Q3. -
Late-stage Cell & Gene Therapy Programs
Q: What's the opportunity as cell and gene therapy programs advance?
A: Orders roughly double with each clinical stage progression, but it varies greatly depending on customer ordering patterns and study size.
Research analysts covering BIO-TECHNE.