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BIO-TECHNE Corp (TECH)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue was $317.0M (+4% reported, +3% organic) and adjusted EPS was $0.53; GAAP EPS was $(0.11) due to an $83.1M impairment tied to the Exosome Diagnostics business held-for-sale .
  • Results were essentially in line: revenue slightly above consensus ($317.0M vs. $315.0M*) and adjusted EPS above consensus ($0.53 vs. $0.50*); management cited unfavorable mix in Diagnostics & Spatial Biology as a margin headwind .
  • Portfolio reshaping: agreed to divest Exosome Diagnostics to mdxhealth; management expects an “immediate” uplift to operating margins post-close (anticipated Q1 FY2026). Exosome contributed $25.9M in FY2025 revenue and was a ~200 bps headwind to corporate adjusted operating margin .
  • Forward tone: organic growth expected to remain low-single-digits until policy uncertainties (NIH funding, potential pharma tariffs/MFN pricing) abate; adjusted operating margin expansion of ~100 bps in FY2026 (flat in Q1, ~+200 bps by Q4) driven by divestiture and productivity initiatives .

What Went Well and What Went Wrong

What Went Well

  • Large pharma strength drove robust demand for proteomic analytical instrumentation (LEO Simple Western, Maurice), with mid-teens instrument revenue growth and high-single-digit growth in proteomic instruments for the year; Protein Sciences organic growth +4% in Q4 (6% reported), margin up 60 bps to 43.6% YoY .
  • Cell therapy workflow solutions remained resilient despite biotech funding softness; GMP reagents grew ~20% in Q4 and >30% for FY25; Wilson Wolf grew >20% FY25 with EBITDA margins >70% .
  • China returned to growth (low double digits in Q4) amid stimulus and pull-forward ahead of potential tariffs; broader APAC ex-China grew low-single-digits; Europe mid-single digits .
  • Quote: “We achieved strong performance in our cell therapy and protein analysis instrumentation growth pillars, supported by a resilient pharma market.” — Kim Kelderman, CEO .

What Went Wrong

  • Diagnostics & Spatial Biology declined 1% in Q4; segment margin fell to 6.0% (vs. 12.5% LY) on unfavorable mix and order timing (including delayed COMET placements in Middle East); Exosome impairment also weighed on GAAP margins .
  • GAAP operating margin contracted to (7.5)% (from 15.0% LY) and GAAP EPS turned negative ($0.11) on the Exosome Diagnostics impairment and other charges; adjusted operating margin was 32.0% (down 150 bps YoY) on mix .
  • Academia was soft (low-single-digit decline in Q4) amid precautionary budget holds ahead of NIH clarity; management believes behavior may be worse than likely funding outcomes, delaying purchasing until certainty improves .

Financial Results

Headline Metrics vs Prior Periods and Estimates

MetricQ4 2024Q2 2025Q3 2025Q4 2025
Revenue ($M)$306.1 $297.0 $316.2 $316.964
GAAP EPS ($)$0.25 $0.22 $0.14 $(0.11)
Adjusted EPS ($)$0.49 $0.42 $0.56 $0.53
GAAP Gross Margin (%)66.4% 65.3% 67.9% 62.7%
Adjusted Gross Margin (%)71.1% 70.5% 71.6% 70.0%
GAAP Operating Margin (%)15.0% 16.0% 12.2% (7.5)%
Adjusted Operating Margin (%)33.5% 30.1% 34.9% 32.0%

Notes: Q4 2025 GAAP margins impacted by Exosome Diagnostics impairment; adjusted margins pressured by mix in Diagnostics & Spatial Biology .

Results vs S&P Global Consensus (Q4 2025)

MetricConsensusActualDelta
Revenue ($M)315.0317.0+2.0
Adjusted/Normalized EPS ($)0.500.53+0.03
EBITDA ($M)110.7142.2+31.5

Values retrieved from S&P Global.*

Segment Performance

SegmentQ4 2024 Revenue ($M)Q3 2025 Revenue ($M)Q4 2025 Revenue ($M)Q4 2024 MarginQ3 2025 MarginQ4 2025 Margin
Protein Sciences214.0 227.7 226.5 43.0% 45.6% 43.6%
Diagnostics & Spatial Biology90.7 89.2 89.7 12.5% 9.4% 6.0%

Key KPIs and Cash/Capital Returns (Q4 2025)

  • Cash from Operations: $98.2M; Capex: $4.9M .
  • Share Repurchases: $100.1M; Dividends Paid: $12.4M .
  • Cash: $162.2M; Bank Debt: $346.0M at quarter end .
  • Dividend Declared: $0.08/share, payable Aug 29, 2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Revenue GrowthNear-term (FY2026 until uncertainties abate)Not providedLow single digits until NIH/tariff/MFN uncertainty resolves New qualitative framework
Adjusted Operating MarginFY2026Not provided~+100 bps YoY; flat in Q1; ~+200 bps by Q4 New positive outlook
Diagnostics & Spatial Biology MarginPost-Exosome CloseNot providedImmediate improvement expected post-divestiture Raised
Exosome Diagnostics DivestitureClose Timing/ImpactN/ATarget close Q1 FY2026; FY2025 revenue $25.9M; ~200 bps headwind removed Portfolio reshaping
DividendQuarterly$0.08/share (ongoing pattern)$0.08/share declared for Q4 FY2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 FY2025)Current Period (Q4 FY2025)Trend
Large pharma demand & instrumentsImproving biopharma; Protein Sciences +8% organic (Q2); strong instruments in Q3; adjusted op margin 30.1% (Q2), 34.9% (Q3) High-single-digit proteomic instrument growth; mid-teens instrument revenue; LEO and Maurice highlighted Strength sustained/accelerating in large pharma
Cell therapy (GMP reagents, Wilson Wolf)Momentum in cell/gene therapy (Q2, Q3) GMP reagents +~20% Q4 and >30% FY; Wilson Wolf >20% FY25 growth, >70% EBITDA margin Strong, resilient despite biotech softness
Academia/NIH exposureNot a major headwind in Q2/Q3; Q3 steady U.S. academics low-single-digit decline; company NIH exposure “low single digits”; behavior cautious pending clarity Cautious near term; upside once certainty returns
ChinaStabilizing in Q3 Low double-digit growth in Q4 (stimulus, tariff pull-forward); expect modest growth going forward Stabilizing with some pull-forward
Policy/tariffs/MFNNot prominent in Q2; modest mentions in Q3 Potential pharma tariffs and MFN drug pricing driving uncertainty across end markets Heightened uncertainty
Portfolio actionsN/AExosome Diagnostics divestiture to mdxhealth; immediate margin uplift expected Margin-accretive portfolio focus

Management Commentary

  • Strategic focus and portfolio reshaping: “Last night, we announced the divestiture of our Exosome Diagnostics business… This strategic decision will immediately strengthen our profitability and allow us to increase our focus on high-growth areas, particularly tools for research and precision diagnostics.” — Kim Kelderman, CEO .
  • Margin outlook: “We expect adjusted operating margin expansion of approximately 100 basis points in fiscal year ’26… starting flat year over year in our first quarter and ramping to roughly 200 basis points higher by Q4.” — CFO James Hippel .
  • Academic exposure and behavior: “Our new estimate is that less than one third of our U.S. academic revenue is directly tied to NIH grants… our total company exposure to NIH funded research is likely in the low single digits… customers are actually behaving more conservative than even the worst case scenario.” — CEO & CFO .
  • China and instruments: “China delivered a positive surprise, increasing low double digits in the quarter… instrument revenue grew mid-teens… LEO… tailored to large pharma users… Maurice continues to gain share.” — CEO .

Q&A Highlights

  • Outlook framing: Management expects low-single-digit organic growth until NIH/tariff/MFN uncertainty resolves; not committing to a full-year FY2026 low-single-digit framework but will persist “until” clarity improves .
  • Margin expansion drivers: FY2026 +100 bps (to ~+200 bps by Q4) primarily from Exosome divestiture (~200 bps drag removed) plus productivity; reinvestment partially offsets .
  • Large pharma vs biotech: Large pharma grew double digits even as overall growth was low-single-digits; biotech remains constrained by funding .
  • China color: Low double-digit growth included some stimulus and pull-forward ahead of tariff timelines; expect stabilization to modest growth .
  • Wilson Wolf acquisition milestone: EBITDA threshold could be reached earlier than 12/31/2027; company “keeping a close eye” and “rooting” for earlier takeout .

Estimates Context

  • Q4 FY2025 results modestly beat consensus: revenue $317.0M vs. $315.0M*, adjusted/normalized EPS $0.53 vs. $0.50*, and EBITDA $142.2M vs. $110.7M*. Management described the quarter as in line with expectations, with adjusted margin pressure from mix in Diagnostics & Spatial Biology .
  • Given low-single-digit growth outlook and margin uplift from the Exosome divestiture, street models may need to:
    • Trim near-term revenue run-rates to low-single-digit organic growth until clarity emerges;
    • Raise FY2026 adjusted operating margin assumptions by ~100 bps (with Q4 FY2026 ~200 bps higher YoY) to reflect divestiture and productivity plans .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Core engines (proteomic instruments, GMP reagents) are outperforming, underpinned by large pharma demand; watch continued LEO and Maurice traction as drivers of mix and margin .
  • The Exosome Diagnostics divestiture is a clear margin catalyst: removes a ~200 bps drag; management guides ~+100 bps FY2026 adjusted operating margin expansion (flat in Q1, ~+200 bps by Q4) .
  • Near-term organic growth will likely remain low-single-digits pending NIH/tariff/MFN clarity; academic caution appears behavioral and could normalize once budgets are set, offering upside .
  • China returned to growth with some pull-forward; expect modest growth ahead as stimulus fades; monitor sustainability of instrument demand and consumables pull-through in the region .
  • GAAP volatility reflects non-cash impairment; adjusted metrics better capture operational performance (70.0% adjusted gross margin; 32.0% adjusted operating margin in Q4) amid unfavorable mix .
  • Capital returns remain active (Q4: $100.1M buybacks, $0.08 dividend) with a strong balance sheet ($162.2M cash; $346M bank debt) supporting M&A focus in core growth pillars .
  • Watch for FY2026 catalysts: closure of Exosome divestiture (Q1), progress toward Wilson Wolf acquisition milestones, and potential policy clarity that could re-accelerate growth .

Footnote:
*Consensus/actual estimates data are from S&P Global.