Bio-Techne ((TECH)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Bio-Techne’s recent earnings call painted a picture of solid organic growth and strategic positioning in core markets, particularly in biopharma and cell therapy. Despite these strengths, the company remains cautious due to uncertainties in academic funding, challenges in the biotech market, and policy-related headwinds.
Organic Revenue Growth
Bio-Techne reported a 3% organic revenue growth in Q4 and a 5% increase for the full fiscal year. This growth was primarily driven by strong performance in the biopharma end markets, highlighting the company’s robust market positioning.
Strong Performance in Biopharma
The biopharma sector showed high single-digit growth, especially among large pharmaceutical customers. This performance is noteworthy given the uncertainties in the pharma landscape, indicating Bio-Techne’s resilience and strategic focus.
Operating Margin Achievements
The company achieved an adjusted operating margin of 32% for the quarter. Looking ahead, Bio-Techne plans for a 100 basis point expansion in fiscal year 2026, showcasing their commitment to operational efficiency.
Growth in Protein Sciences
Bio-Techne’s Protein Sciences segment reported a 4% growth for Q4 and 5% for the full fiscal year. This growth was driven by the demand for proteomic analytical tools and cell therapy solutions, underscoring the segment’s importance to the company’s portfolio.
Cell Therapy Demand
There was a strong demand for Bio-Techne’s GMP reagents, with a 20% growth in Q4 and over 30% growth for the full fiscal year. This demand highlights the company’s strategic positioning in the cell therapy market.
China Market Recovery
China delivered low double-digit growth in Q4, indicating signs of stabilization and modest growth potential in this key market.
Divestiture of Exosome Diagnostics
Bio-Techne announced the strategic divestiture of Exosome Diagnostics to MDxHealth. This move is expected to improve the company’s operating margin and allow a sharper focus on core growth pillars.
Challenges in Academic Markets
The academic end markets experienced a low single-digit decline in Q4. Concerns about NIH funding are affecting customer behavior, posing challenges for future growth in this segment.
Biotech Funding Decline
Biotech funding has declined more than 40% year-to-date compared to 2024 levels. This decline impacts smaller biotech firms and results in cautious spending, affecting Bio-Techne’s growth prospects.
Diagnostics and Spatial Biology Segment Decline
The Diagnostics and Spatial Biology segment saw a 1% organic revenue decline in Q4. This was attributed to order timing and macro uncertainties, reflecting the challenges in this segment.
Uncertain U.S. Policy Impact
Uncertainties around U.S. pharmaceutical tariffs and NIH funding continue to create a cautious market environment, impacting Bio-Techne’s strategic planning.
Forward-Looking Guidance
Bio-Techne remains confident in its long-term growth trajectory despite current challenges. The company expects an adjusted operating margin expansion of approximately 100 basis points in fiscal 2026. The divestiture of Exosome Diagnostics is anticipated to close in fiscal Q1 2026, providing an immediate uplift to the operating margin profile.
In summary, Bio-Techne’s earnings call highlighted a mix of solid growth and strategic challenges. While the company is well-positioned in core markets like biopharma and cell therapy, uncertainties in academic funding and biotech market challenges necessitate a cautious outlook. The forward-looking guidance suggests confidence in overcoming these hurdles and achieving long-term growth.