Bio-Rad Laboratories ((BIO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Bio-Rad Laboratories’ recent earnings call painted a picture of solid execution and growth, particularly in the Life Sciences segment, despite facing challenges such as gross margin declines and increased expenses. The call highlighted a balanced outlook, with positive developments in key areas offsetting some market softness.
Revenue and Operating Margin Exceed Expectations
Bio-Rad Laboratories reported impressive financial results for the second quarter of 2025, with both revenue and operating margin surpassing consensus expectations. The company achieved approximately $652 million in revenue, marking a 2.1% increase from the previous year. This performance underscores the strength of Bio-Rad’s portfolio and the discipline of its team.
Life Science Segment Growth
The Life Science segment was a standout performer, recording a 4.9% increase in sales. This growth was primarily driven by significant advancements in process chromatography and food safety products, with the process chromatography business experiencing double-digit year-over-year growth.
Droplet Digital PCR (ddPCR) Advancements
Bio-Rad completed the development of the QX Continuum platform and closed the acquisition of Stilla Technologies, further enhancing its ddPCR portfolio. The launch of the rebranded QX700 Series ddPCR instruments marks a significant milestone in the company’s technological advancements.
Clinical Diagnostics Stability
The Clinical Diagnostics segment demonstrated stability, with sales reaching approximately $389 million. This was supported by increased demand for quality control and immunology products, indicating a steady market presence.
Improved Free Cash Flow
Bio-Rad reported a notable improvement in free cash flow, which rose to $71 million in the second quarter, up from $55 million in Q2 2024. The year-to-date free cash flow to non-GAAP net income conversion ratio stood at an impressive 117%.
Gross Margin Decline
Despite the positive revenue growth, Bio-Rad faced a decline in gross margin, which decreased to 53% from 55.6% in Q2 2024. This was attributed to higher material costs and reduced fixed manufacturing absorption.
SG&A and R&D Expense Increase
The company experienced an increase in SG&A expenses, which rose to $208 million, accounting for 31.9% of sales. R&D expenses also saw a slight increase, reaching $61 million, or 9.3% of sales.
Challenges in China
Bio-Rad faced challenges in the Chinese market, particularly in the Clinical Diagnostics segment, due to lower reimbursement rates for diabetes testing. However, growth in other regions helped offset these local reimbursement pressures.
Headwinds in Academic and Biotech Markets
The company encountered ongoing softness in the biotech and academic research markets, which affected instrument demand. This led to a 1.7% decrease in core Life Science Group revenue year-over-year.
Forward-Looking Guidance
Bio-Rad provided an updated guidance reflecting their financial performance and strategic developments. The company raised its full-year 2025 guidance, anticipating currency-neutral revenue growth of flat to 1%, with the Life Sciences segment expected to grow flat to 1% and Diagnostics by 0.5% to 1.5%. The updated outlook considers reduced tariff impacts, projecting a full-year non-GAAP operating margin between 12% and 13%.
In summary, Bio-Rad Laboratories’ earnings call highlighted a balanced outlook with strong performance in key segments like Life Sciences, despite challenges in gross margins and certain markets. The company’s strategic advancements and improved cash flow position it well for future growth, as reflected in their optimistic forward-looking guidance.