Quidelortho Corporation ((QDEL)) has held its Q1 earnings call. Read on for the main highlights of the call.
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QuidelOrtho Corporation’s recent earnings call reflected a cautiously optimistic sentiment, highlighting solid revenue growth excluding COVID impacts, improved profitability metrics, and effective cost-saving measures. Despite challenges such as declining total revenue, COVID-related declines, and tariff impacts, the company expressed confidence in its mitigation strategies and maintained its financial guidance.
Revenue Growth Excluding COVID and Donor Screening
QuidelOrtho achieved a commendable mid-single-digit revenue growth of 6% in Q1 2025, primarily driven by strong performance in the labs business, immunohematology, and a robust flu season. This growth underscores the company’s ability to thrive in its core areas despite external challenges.
Improved Adjusted EBITDA Margin
The company reported a significant 450 basis point year-over-year improvement in its adjusted EBITDA margin. This improvement is a testament to QuidelOrtho’s successful cost-saving initiatives, which have bolstered its profitability.
Significant Increase in Adjusted Diluted EPS
QuidelOrtho’s adjusted diluted earnings per share saw a remarkable 68% increase compared to the prior year period, reflecting the company’s strong financial performance and effective operational strategies.
Lab Business and Geographical Growth
The labs business, which constitutes 54% of QuidelOrtho’s total revenue, grew by 7%. Additionally, the ‘Other’ region, including Japan, Asia-Pac, and Latin America, experienced a robust 12% growth, highlighting the company’s successful geographical expansion.
Cost Savings Initiatives
QuidelOrtho is on track to realize $100 million in annualized cost savings, with $50 million expected in the first half of 2025. These initiatives are crucial in offsetting potential tariff impacts and enhancing the company’s financial resilience.
Decline in Total Reported Revenue
Total reported revenue for Q1 2025 was $693 million, down from $711 million in the prior year period. This decline was primarily due to lower COVID and donor screening revenue, a challenge the company is actively addressing.
COVID Revenue Decline
COVID-related revenue saw a substantial 53% year-over-year decline, amounting to $23 million. Despite this, QuidelOrtho remains focused on other growth areas to mitigate this impact.
Tariff and Macroeconomic Challenges
The company faces potential tariff headwinds estimated at $30 million to $40 million for 2025. QuidelOrtho is implementing strategic mitigation plans to address these macroeconomic challenges effectively.
Softness in China Revenue
Revenue from China remained flat compared to the prior year period, affected by the timing of orders and decreased reimbursement rates for certain cardiac markers. The company is working to navigate these challenges and improve performance in the region.
Forward-Looking Guidance
QuidelOrtho’s forward-looking guidance remains optimistic, with expectations of mid-single-digit revenue growth excluding COVID and donor screening. The company maintains its full-year guidance with projected revenue between $2.6 billion and $2.81 billion and adjusted EBITDA of $575 million to $615 million. They aim to offset anticipated tariff impacts through cost-saving initiatives and strategic mitigations, with a focus on expanding their global footprint and manufacturing capabilities.
In conclusion, QuidelOrtho Corporation’s earnings call painted a picture of resilience and strategic growth. Despite facing revenue declines and macroeconomic challenges, the company is confident in its mitigation strategies and continues to focus on its core strengths and cost-saving measures to drive future success.