Harvard Bioscience ((HBIO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Harvard Bioscience painted a picture of cautious optimism, with the company demonstrating strong financial discipline. Despite challenges such as regional revenue declines in the Americas and APAC regions, the company exceeded its revenue guidance and made significant strides in product pipeline development. The sentiment was one of stabilizing the business while positioning for long-term growth.
Revenue Exceeds Guidance
Harvard Bioscience reported second-quarter revenue of $20.5 million, surpassing their guidance range of $18 million to $20 million. This positive outcome was primarily driven by increased shipments to China, showcasing the company’s ability to capitalize on international markets despite regional challenges.
Improved Operating Expenses
The company successfully reduced operating expenses by $2 million compared to the previous year. This reduction contributed to an improvement in adjusted operating income, which rose to $1 million from $0.8 million in the second quarter of 2024, highlighting effective cost management strategies.
Positive Cash Flow and Debt Reduction
Harvard Bioscience reported robust cash flow from operations, generating $5.7 million year-to-date, with $2.8 million in the second quarter alone. The company also managed to reduce net debt by over $4 million, bringing it down to $27.9 million, reflecting a strong focus on financial health.
European Revenue Growth
The European market showed promising growth, with overall revenue increasing by 9% sequentially. This growth was attributed to stronger academic shipments and increased preclinical sales, both sequentially and year-over-year, indicating a solid performance in the region.
Product Pipeline Progress
Significant advancements were made in Harvard Bioscience’s product pipeline, including the development of the SoHo Telemetry platform and the VivaMARS automation pilot with Labcorp. The company also achieved $1 million in BTX bioproduction consumable revenue and expanded the Mesh MEA organoid platform, underscoring their commitment to innovation.
Overall Revenue Decline
Despite exceeding guidance, overall revenues in the second quarter showed a slight decline, finishing at $20.5 million compared to $21.8 million in the prior quarter. This decline highlights the challenges faced in maintaining consistent revenue growth.
Americas Revenue Decrease
Revenue in the Americas decreased by 5.4% sequentially and 11.7% year-over-year. This decline was primarily due to budget uncertainties affecting academic institutions and the NIH, reflecting broader economic challenges in the region.
APAC Revenue Impacted by Tariffs
The APAC region experienced a significant revenue decline of over 25% both sequentially and year-over-year. This was largely due to tariff issues with China, which halted orders and shipments in April, posing a substantial challenge to the company’s operations in the region.
Gross Margin Decline
The gross margin for the second quarter of 2025 was 56.4%, slightly down from 57.2% in the same quarter the previous year. This decline was mainly due to lower absorption of fixed manufacturing overhead costs on reduced volume, indicating areas for potential improvement.
Forward-Looking Guidance
Looking ahead, Harvard Bioscience projects revenue between $19 million and $21 million for the third quarter of 2025, with a gross margin guidance of 56% to 58%. The company plans to restructure its debt obligations by December 5, 2025, and continues to focus on effective working capital management and reduced operating expenses.
In summary, Harvard Bioscience’s earnings call reflected a balanced view of achievements and challenges. While the company exceeded revenue guidance and made notable progress in product development, regional revenue declines and tariff impacts posed significant hurdles. The forward-looking guidance suggests a continued focus on financial stability and growth, with strategic plans to navigate the challenges ahead.