Snapshot
Bio-Rad Laboratories, Inc. reported $653M of revenue in Q3 2025, up 0.5% year over year, with diluted EPS of $-12.70 and an operating margin of 10.0%.
- Revenue
- $653M
- YoY growth
- +0.5%
- Diluted EPS
- $-12.70
- Operating margin
- 10.0%
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.
- •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.
- •Revenue was consistent with our outlook, and operating margin exceeded consensus, a testament to the discipline and agility of our teams in what continues to be a challenging and evolving macro environment.
- •Our Clinical Diagnostics segment remains stable across our product areas, aside from the reimbursement rate headwind in China, which we expect to analyze in the fourth quarter.
- •In our Life Science segment, process chromatography delivered a strong performance, helping offset the continued softness we're seeing in academic research and biotech funding.
- •This sentiment was reflected through continued weak instrument demand and some softness in consumables.
- •However, through disciplined cost management and tight control of our discretionary spending, we achieved margin outperformance for the quarter.
- •While it's still early, we are encouraged by the customer receptivity to the new products, particularly in the entry-level segment.
- •In summary, we're pleased with the progress we're making, balancing near-term execution with continued investment in innovation and long-term growth.
- •Net sales for the third quarter of 2025 were approximately $653 million, which represents a 0.5% increase on a reported basis versus $650 million in Q3 of 2024.
- •Within the Life Science segment, our process chromatography business experienced strong double-digit growth on a year-over-year basis due to the timing of customer orders within the quarter.
What went well
- •Revenue was consistent with the company's outlook and operating margin exceeded consensus, with net sales of approximately $653 million, a 0.5% reported increase versus Q3 2024.
- •Process chromatography again delivered strong double-digit year-over-year growth, prompting the company to raise its full-year outlook for the product area to high teens growth from prior low double-digit.
- •Non-GAAP operating margin improved to 11.8% from 11.3% a year ago, reflecting proactive cost actions and net reductions in in-process R&D expense.
- •Free cash flow was $89 million for the quarter and $256 million year-to-date, yielding a year-to-date conversion ratio of 126% of non-GAAP net income.
- •The ddPCR strategy advanced with completed global sales training, a building sales funnel, strong entry-level segment receptivity, and new partnerships with Gencurix and Biodesix.
What went wrong
- •On a currency-neutral basis net sales decreased 1.7% year-over-year, driven by both Life Science and Clinical Diagnostics segments.
- •Non-GAAP gross margin declined to 53.5% from 55.6% a year ago, due to higher material costs and reduced fixed manufacturing absorption.
- •Core Life Science revenue excluding process chromatography fell 6% year-over-year (7.8% currency neutral) on academic and biotech softness plus a tough comparison from large one-time orders a year ago.
- •Clinical Diagnostics currency-neutral sales decreased 1.8%, hurt by lower diabetes testing reimbursement in China.
- •Instrument demand remained weak and consumables showed some softness as research customers stayed cautious with budgets.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Total currency-neutral revenue growth | FY2025 | Flat to 1% | Flat to 1% | maintained |
| Non-GAAP gross margin | FY2025 | 53.5%-54.5% | 53.5%-54.5% | maintained |
| Non-GAAP operating margin | FY2025 | 12%-13% | 12%-13% | maintained |
| Free cash flow | FY2025 | $310M-$330M | $310M-$330M | maintained |
| Process chromatography growth | FY2025 | Low double digit | High teens | raised |
| Process chromatography growth (framing) | FY2026 | Not previously given | High single digit (normalization) | new framing |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Net sales | +0.5% reported (-1.7% currency neutral) to ~$653M | Driven down currency-neutral by both Life Science and Clinical Diagnostics segments |
| Life Science segment sales | Flat reported (-1.5% currency neutral) at $262M | Constrained academic research and biotech funding environment |
| Core Life Science ex-process chromatography | -6% (-7.8% currency neutral) | Academic/biotech softness and tough comp from large one-time orders in year-ago period |
| Clinical Diagnostics segment sales | +0.6% reported (-1.8% currency neutral) to ~$391M | Lower diabetes testing reimbursement in China |
| Non-GAAP gross margin | 53.5% vs 55.6% | Higher material costs and reduced fixed manufacturing absorption |
| Non-GAAP operating margin | 11.8% vs 11.3% | Proactive cost actions and net reductions in IP R&D expense |
| Non-GAAP net income | $61M ($2.26 EPS) vs $56M ($2.02 EPS) | Excludes Sartorius equity value change |
| Free cash flow | $89M vs $123M | Lower operating cash generation versus prior year |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Process chromatography | Low double digit FY outlook | High teens FY outlook; Q4 expected lower sequentially and year-over-year on order timing; FY2026 framed at high single digit | strong near-term, normalizing |
| Academic/government research funding | Stabilizing in Q2 | Still cautious; no budget flush expected amid NIH budget uncertainty and U.S. government shutdown | soft/cautious |
| China diagnostics | Soft, DRG impact noted, no VBP | Still soft; expect return to growth in Q4 as diabetes reimbursement annualizes; no new VBP expected into 2026 | soft, improving into Q4 |
| ddPCR portfolio | QX700 launched, Stilla closed | Sales training complete, funnel building, strong entry-level receptivity, new Gencurix/Biodesix partnerships; still expecting flat for the year | improving |
| Biotech funding | Slow recovery | Gradual improvement anticipated into 2026 | gradual improvement |
Q&A summary
What are the expectations for the Q4 ramp given the government shutdown and process chromatography pull-forward?
Slight uptick on both Life Sciences and Diagnostics. Process chromatography is a Q4 headwind, offset by expected ddPCR strength on the Life Science side; on Diagnostics it is about the quality controls lot releases. October demand was on plan, giving confidence in the trajectory.
How are you thinking about the market into 2026?
U.S. academic remains cautious and TBD pending the NIH budget; instruments most affected while consumables chug along. China remains an open question with no VBP impact. Biotech improves gradually. Process chromatography normalizes back to high single digit growth. Full guidance comes at the February call.
Does the high single-digit process chromatography framing for 2026 reflect full market normalization given historical volatility?
Volatility remains, as seen this year with customers pulling forward between quarters tied to therapeutic demand. But without an easy comparator from 2025 into 2026, normalization back to high single digits is where they are pointing and what they want to execute to.
Can you quantify the China diabetes pricing headwind?
Last Q4 had two components: the price cut-in (mid-single digits) which China cut in mid-quarter, and a channel cut-in (low to mid-single digits). That frames what was there last year and is annualizing.
Can margins expand in 2026 if growth stays low single digit, and what are the moving parts?
There are opportunities for margin expansion in 2026 beyond 2025. Ideally growth would be 3%-5%, with 3% allowing more effective absorption. Drivers include lean/productivity initiatives in factories, logistics improvements, untapped supply chain buying-power leverage, and OpEx productivity in R&D and other functions.
Was ddPCR integration disruptive, and how were instruments versus consumables in Q3?
Integration was not disruptive; there was excitement about the expanded portfolio and growing pipeline, with somewhat extended sales cycles. Still expecting to be on plan for the full year for the portfolio. Consumables were a little slow in Q3 but expected to come back in Q4, with an instrumentation rebound in Q4 and 2026.