Snapshot
Bio-Rad Laboratories, Inc. reported $652M of revenue in Q2 2025, up 2.1% year over year, with diluted EPS of $11.67 and an operating margin of 11.8%.
- Revenue
- $652M
- YoY growth
- +2.1%
- Diluted EPS
- $11.67
- Operating margin
- 11.8%
What management said
- •Finally, our remarks today will include references to non-GAAP financials including net income and diluted earnings per share, which are financial measures that are not defined under generally accepted accounting principles.
- •In addition to excluding certain atypical and non-recurring items, our non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG.
- •In order to provide investors with a better understanding of Bio-Rad underlying operational performance, investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release.
- •We have also posted a supplemental earnings presentation in the Investor Relations section of our website for your reference.
- •Both revenue and operating margin exceeded consensus expectations, underscoring the strength of our portfolio and the discipline of our teams in a challenging and rapidly evolving macroeconomic environment.
- •Our clinical diagnostics business remained stable while our life science segment benefited from the strength in our process chromatography portfolio.
- •Product mix and a continued focus on cost control and discretionary spending helped drive an outperformance in operating margin for the quarter.
- •This resilience highlights the enduring demand for our differentiated assays and reagents, including droplet digital PCR consumables, which saw high single-digit revenue growth versus 2024.
- •Synchronized with the closing of the Stilla acquisition, we launched the rebranded QX700 Series ddPCR instruments.
- •Strength outside of China helped offset local reimbursement pressures, resulting in 3.7% growth in our rest of world markets.
- •While we factored headwinds from the recent Diagnosis Related Group or DRG policy changes affecting diagnostic panels into our first quarter guidance, the impact was not significant.
- •Net sales for the second quarter of 2025 were approximately $652 million, which represented a 2.1% increase on a reported basis versus $638 million in Q2 of 2024 on a currency neutral basis.
What went well
- •Both revenue and operating margin exceeded consensus expectations, with net sales of approximately $652 million representing a 2.1% reported increase versus Q2 2024.
- •The process chromatography business delivered strong double-digit year-over-year growth, prompting the company to raise its full-year outlook for the product area from high single digit to low double digit growth.
- •Bio-Rad completed development of the QX Continuum platform and closed the acquisition of Stilla Technologies, then launched the rebranded QX700 Series ddPCR instruments to early positive customer feedback.
- •Droplet digital PCR consumables saw high single-digit revenue growth versus 2024, and academic consumable demand proved more durable than prior expectations, showing signs of stabilization.
- •Free cash flow reached $71 million versus $55 million in Q2 2024, with first-half free cash flow of $166 million and a year-to-date conversion ratio of 117% of non-GAAP net income.
- •The company raised its full-year 2025 guidance to reflect Q2 results, the Stilla close, and a reduced tariff headwind.
What went wrong
- •Non-GAAP gross margin declined to 53.7% from 56.4% a year ago, due to higher material costs and reduced fixed manufacturing absorption from lower instrument demand.
- •Non-GAAP operating margin fell to 13.6% from 16.7% in Q2 2024.
- •Instrument demand remained weak, with ddPCR instruments relatively weak year-over-year and broad softness across instruments, particularly in the academic market.
- •Clinical Diagnostics currency-neutral sales decreased 0.7%, hurt by lower diabetes testing reimbursement rates in China.
- •Core Life Science revenue excluding process chromatography decreased 1.7% year-over-year (2.7% currency neutral), reflecting biotech and academic research softness.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Total currency-neutral revenue growth | FY2025 | Wider range including down to -3% on life science | Flat to 1% growth (midpoint ~25 bps higher) | raised |
| Life science segment growth | FY2025 | Flat to down 3% | Flat to 1% | raised |
| ddPCR portfolio revenue growth | FY2025 | Low single digit | Mid single digit (reflecting Stilla) | raised |
| Process chromatography growth | FY2025 | High single digit | Low double digit | raised |
| Diagnostics growth | FY2025 | 0.5%-2.5% | 0.5%-1.5% | lowered (50 bps at midpoint) |
| Non-GAAP gross margin | FY2025 | 53%-54.5% | 53.5%-54.5% | raised at low end |
| Tariff headwind to operating margin | FY2025 | Up to 130 bps | 30-40 bps | reduced |
| Operating margin | FY2025 | 10%-12% | 12%-13% | raised |
| Free cash flow | FY2025 | $310M-$330M | $310M-$330M | reaffirmed |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Net sales | +2.1% reported (+1% currency neutral) to ~$652M | Primarily driven by process chromatography product sales |
| Life Science segment sales | +4.9% reported (+3.8% currency neutral) to $263M | Increase in process chromatography and food safety product sales |
| Clinical Diagnostics segment sales | Flat reported (-0.7% currency neutral) at ~$389M | Lower diabetes testing reimbursement in China, partially offset by quality control and immunology demand |
| Non-GAAP gross margin | 53.7% vs 56.4% | Higher material costs and reduced fixed manufacturing absorption from lower instrument demand |
| Non-GAAP operating margin | 13.6% vs 16.7% | Lower gross margin |
| Non-GAAP net income | $71M ($2.61 EPS) | Excludes Sartorius equity value change |
| Free cash flow | $71M vs $55M | Stronger cash generation |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Academic/government research funding | More paralysis in Q1 | Stabilization, particularly in consumables; stable through the quarter | improving |
| Process chromatography | High single digit outlook | Low double digit, normalized order patterns; ~20% of quarter's sales were pulled forward | improving |
| China diagnostics | Diabetes reimbursement and DRG headwinds contemplated in Q1 guidance | Still soft; no new VBP impact, no significant new reimbursement changes | stable/soft |
| Tariffs | Up to 130 bps potential headwind | Reduced to 30-40 bps after easing China tensions and tariff delays | improving |
| ddPCR portfolio | QX Continuum in development | Continuum complete, Stilla closed, QX700 launched; positive early feedback | improving |
Q&A summary
On process chromatography, how much was pulled forward and what is sustainable given the strong quarter?
Management raised the full-year guide from high single digits to low double digits, signaling they view the growth as sustainable. There was some movement between Q1 and Q2 from customer-driven pull-forward (not necessarily tariff related), and they expect it to sustain through the rest of the year.
What is the contribution from Stilla versus organic in the raised guidance?
Stilla is now in the guide following the June 30 close, and the ddPCR growth rate moving up to mid single digits is solely Stilla-specific since Continuum was already in the original guide. The raise also reflects increased process chromatography growth and more durable consumables.
Can you bridge the margin guide from old to new and isolate tariff headwinds?
Tariffs came down significantly, from up to 130 bps of headwind to 30-40 bps. Of the operating margin change from 10%-12% to 12%-13%, about 100 bps relates to tariffs; the rest reflects better absorption from Stilla and stable, positive mix from consumable pull-through.
How do the China diagnostics headlines relate to Bio-Rad?
China overall remains soft. VBP has not impacted the portfolio. DRG was already contemplated in Q1 guidance with no significant change since. As a specialty diagnostics supplier weighted toward quality controls, much of the portfolio is not affected by reimbursement targeting larger-spend areas.
How are ddPCR instruments and the Continuum launch performing, and is there pent-up demand?
ddPCR instruments were slightly better sequentially but relatively weak year-over-year amid academic softness. Continuum, designed to replace qPCR in a 96-well format, drew strong excitement; the QX700 was on track to forecast. The strategy is to expand the digital PCR user base rather than replace the existing base.
How should second-half revenue and margin phase between Q3 and Q4?
Q3 should look similar to Q2 on the top line with possibly slight strength, and Q4 steps up seasonally though not as much as before. Q3 margins should be in a similar range to Q2, with Q4 margins better due to higher-quality system mix, ddPCR flow-through, and improved absorption, landing within the 53.5%-54.5% range.