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BIO-TECHNE Corp (TECH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 delivered 6% organic revenue growth (4% reported) to $316.2M and a strong adjusted EPS beat at $0.56 vs prior year $0.48, while GAAP EPS fell to $0.14 due to a non-recurring arbitration award impacting GAAP operating margin (12.2%) .
  • Adjusted operating margin expanded 190 bps YoY to 34.9% on volume leverage and cost actions; Protein Sciences grew 7% organically with 45.6% segment margin, Diagnostics & Spatial Biology grew 2% organically with 9.4% margin .
  • Management flagged near-term headwinds from NIH funding uncertainty and tariff escalations; guided Q4 organic growth to temporarily slow to low-single digits and adjusted operating margin to be 100–150 bps below Q4 FY2024, but expects full tariff impact to be fully mitigated by the start of FY2026 .
  • Capital returns stepped up: $0.08 quarterly dividend and a new $500M share repurchase authorization; net debt remains modest with $330M bank debt and $140.7M cash at Q3 .

What Went Well and What Went Wrong

  • What Went Well

    • Protein Sciences executed strongly: 7% organic growth to $227.7M; segment margin expanded to 45.6% on volume leverage and profitability initiatives .
    • Adjusted profitability outperformed: adjusted operating margin 34.9% (+190 bps YoY) and adjusted gross margin 71.6% despite FX headwinds; CFO emphasized structural streamlining and diligent expense control .
    • Management highlighted robust pharma demand and traction in cell therapy and protein analysis platforms (Maurice), with biologics instruments growing double digits; “Our continued focus on profitability resulted in a 34.9% adjusted operating margin” (Kelderman) .

  • What Went Wrong

    • GAAP results compressed: GAAP EPS $0.14 vs $0.31 prior year and GAAP operating margin down to 12.2% due to a non-recurring arbitration award .
    • Academic end-market uncertainty tied to NIH policy changes pressured capital equipment demand; academia was flat and Spatial Biology, most exposed to U.S. academic funding, saw headwinds despite COMET’s double-digit growth .
    • China declined mid-single digits YoY with tariff-related pressures; management expects Q4 growth to slow to low-single digits and margin 100–150 bps below last year before tariff mitigation fully offsets by FY2026 start .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$289.5 $297.0 $316.2
GAAP EPS ($)$0.21 $0.22 $0.14
Adjusted EPS ($)$0.42 $0.42 $0.56
Adjusted Gross Margin %69.5% 70.5% 71.6%
GAAP Operating Margin %N/A16.0% 12.2%
Adjusted Operating Margin %29.0% 30.1% 34.9%
Q3 YoY ComparisonQ3 2024Q3 2025
Revenue ($USD Millions)$303.4 $316.2
GAAP EPS ($)$0.31 $0.14
Adjusted EPS ($)$0.48 $0.56
Adjusted Gross Margin %71.9% 71.6%
GAAP Operating Margin %22.1% 12.2%
Adjusted Operating Margin %33.0% 34.9%
Segment Breakdown ($USD Millions)Q1 2025Q2 2025Q3 2025
Protein Sciences Revenue$204.5 $211.6 $227.7
Protein Sciences Operating Margin %39.4% 41.2% 45.6%
Diagnostics & Spatial Biology Revenue$83.2 $84.1 $89.2
Diagnostics & Spatial Biology Operating Margin %5.1% 3.9% 9.4%
KPIsQ1 2025Q2 2025Q3 2025
Cash from Operations ($USD Millions)$63.9 N/A$41.1
Cash and Equivalents ($USD Millions)$187.5 $177.5 $140.7
Bank Debt ($USD Millions)$300.0 N/A$330.0
Estimates vs ActualsQ2 2025 EstimateQ2 2025 ActualQ3 2025 EstimateQ3 2025 ActualQ4 2025 EstimateQ4 2025 Actual
Revenue ($USD Millions)286.47*297.03 317.33*316.18 315.04*316.96
Primary EPS ($)0.390*0.42 0.507*0.56 0.501*0.53

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Revenue GrowthQ4 FY2025High-single-digit exit rate (improving in H2) Low-single digits (temporary slowdown) Lowered
Adjusted Operating MarginQ4 FY2025 vs Q4 FY2024H2 +100–200 bps YoY vs prior year (mix/volume recovery) 100–150 bps lower than Q4 FY2024 Lowered
Tariff Impact (Adj. Op Margin)FY2026 startN/AFully mitigated by the start of FY2026 Mitigation plan
Adjusted Tax RateOngoing21.5% framework 21.5% (non-GAAP adjusted) Maintained
DividendQ3 FY2025$0.08 per share (ongoing quarterly reviews) $0.08 per share payable May 30, 2025 Maintained
Share RepurchaseNew ProgramPrior program in placeNew $500M authorization beginning May 8, 2025 Raised capital return

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025 and Q2 2025)Current Period (Q3 2025)Trend
AI/technology initiativesIntroduced AI-engineered designer proteins; pipeline of cytokines/growth factors/antibodies Focus continued on automation (COMET multiomics upgrades); AI themes less central in Q3 Stable, execution-focused
Cell & Gene Therapy (GMP reagents)TTM growth upper-teens; quarter up >60% with lumpiness; ~400 customers, 58 in clinical phases High-single-digit growth in GMP agents; TTM ~13% growth; strong pharma orders; Wilson Wolf double-digit growth Sustained growth with normalizing cadence
Protein Analysis (Maurice/ProteinSimple)Return to low single-digit growth in Americas; LEO launch planned H2 FY2025 Biologics instruments grew double digits; strong placements and consumables Improving
Spatial Biology (COMET)Capacity increased; multiomic (RNA + proteins); pull-through ramp expected Double-digit COMET growth; U.S. academic NIH uncertainty dampens overall segment; proactive KOL rollouts Growth with near-term U.S. academic headwind
Tariffs/macroChina tender stimulus pipeline building; expectation Q3 benefit Tariff escalation from April; mitigation via regional production/surcharges; full offset by FY2026 start Near-term headwind; mitigation underway
Academic funding (NIH)Low single-digit growth; strong Europe; mixed U.S. funding flows U.S. policy uncertainty; academia flat; instruments more impacted than consumables Cautious
Regional trendsChina low double-digit decline but stimulus expected to help China mid-single-digit decline; rest of Asia mid-teens growth; Europe mid-single digits Mixed; ex-China strength

Management Commentary

  • “Our pharma end market continued to improve… solid performance in our cell therapy and protein analysis instrumentation businesses… 34.9% adjusted operating margin” — Kim Kelderman, CEO .
  • “Adjusted operating margin for Q3 was 34.9%, up 190 bps… due to favorable volume leverage, productivity gains and cost control… FX was a partial offset” — James Hippel, CFO .
  • On tariffs: “We mobilized specialized teams… optimize global footprint for regional production… targeted price/surcharge adjustments… expect to fully mitigate by FY2026 start” — Management .
  • On academia: “Uncertainty around NIH grants impacts purchase decisions, particularly capital equipment; consumables more resilient” — Management .

Q&A Highlights

  • Near-term guide: Q4 organic growth “low-single digits” with adjusted operating margin 100–150 bps below Q4 FY2024; larger pharma orders in Q3 unlikely to repeat immediately; academia slowdown began in February with stabilization in March .
  • Tariff exposure and mitigation: Main exposure from Chinese tariffs on U.S.-made instruments; plan to shift manufacturing to alternate sites and leverage existing non-U.S. production; consumables largely tariff-exempt; mitigation expected by FY2026 start .
  • Academic market impact and mix: U.S. academic consumables relatively flat; instruments (lower ASP ~$50K) more impacted but positioned to automate workflows and drive lab efficiencies; Europe academia remained strong .
  • China outlook: Mix shifted, stimulus expected to turn growth modestly positive; Q3 saw mid-single-digit decline, rest of Asia mid-teens growth .
  • Margin discipline: Teams holding discretionary spend and driving structural efficiencies; balancing investment with cost containment to prepare for FY2026 .

Estimates Context

  • Q3 FY2025: Adjusted EPS $0.56 vs S&P Global consensus $0.507* — beat; Revenue $316.2M vs $317.3M* — slight miss .
  • Q2 FY2025: Adjusted EPS $0.42 vs $0.390* — beat; Revenue $297.0M vs $286.5M* — beat .
  • Q4 FY2025: Adjusted EPS $0.53 vs $0.501* — beat; Revenue $317.0M vs $315.0M* — beat .

Values retrieved from S&P Global.*

Adjustments likely: Street should factor tariff-related margin headwinds in Q4 and academic instrument softness; medium-term margins likely resume expansion as tariff mitigation completes and mix improves (Maurice/COMET/consumables growth) .

Key Takeaways for Investors

  • Quality of earnings: Strong adjusted margins and EPS beats driven by operational execution and volume leverage, despite GAAP volatility from litigation/arbitration and mix; focus on adjusted margins for trend .
  • Near-term caution: Expect softer Q4 growth and margin compression vs last year due to tariffs and NIH-related academic uncertainty; set expectations accordingly .
  • Medium-term setup: Tariff mitigation actions and global manufacturing footprint support margin normalization by FY2026 start; continued growth in Maurice, COMET, and GMP reagents underpins thesis .
  • Capital allocation: $500M buyback plus steady dividend supports downside; modest leverage and strong cash generation provide flexibility for M&A and investment .
  • Segment momentum: Protein Sciences remains the profit engine; watch for Diagnostics & Spatial Biology margin improvement as COMET scales and consumables pull-through ramps .
  • Geographic dynamics: Ex-China strength (Europe, rest of Asia) offsets China softness; stimulus could help China return to positive growth, but tariffs remain a wildcard .
  • Trading lens: Near-term sentiment may hinge on Q4 trajectory and academic/China updates; medium-term rerating potential tied to margin resilience post-mitigation and continued beat/raise cadence on adjusted EPS .