Snapshot
Bio-Rad Laboratories, Inc. reported $693M of revenue in Q4 2025, up 3.9% year over year, with diluted EPS of $26.65 and an operating margin of 7.8%.
- Revenue
- $693M
- YoY growth
- +3.9%
- Diluted EPS
- $26.65
- Operating margin
- 7.8%
What management said
- •Today, we will review the fourth quarter and full year 2025 financial results and provide an update on key business trends for Bio-Rad.
- •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.
- •In 2025, we delivered results within our revised guidance for both revenue and operating margin.
- •However, gross margin did not meet our expectations or, frankly, what Bio-Rad is capable of delivering.
- •In the fourth quarter, gross margin was pressured by higher than anticipated supply chain costs.
- •In Life Science, we are particularly encouraged by the traction from our execution on the Stilla acquisition and the launch of the QX700 droplet digital PCR family and products.
- •These data points reinforce our belief that QX700 is, is enabling Bio-Rad to expand its served market and gain share in the entry-level digital PCR segment.
- •More broadly, the early success of QX700 strengthens our conviction that digital PCR will remain a core growth pillar for Bio-Rad over the long term.
- •Turning to our end markets, cautious spending persisted throughout the fourth quarter, continues to weigh on instrument demand in academia and government.
- •While the recent passage of the NIH budget may support improved sentiment over time, we believe academic institutions remain focused on maintaining staffing levels and sustaining ongoing research rather than purchasing capital equipment.
What went well
- •Clinical Diagnostics returned to growth, with Q4 segment sales of approximately $425 million, up 8.4% reported (5.6% currency neutral), driven by higher quality control and blood typing product sales and the annualization of the China diabetes reimbursement change.
- •The QX700 droplet digital PCR family saw meaningful acceleration in instrument sales, with strong customer response, an expanding order funnel, and adoption driven by both qPCR conversions and competitive wins; ddPCR posted mid-single-digit year-over-year growth in Q4.
- •Full-year free cash flow improved to approximately $375 million from $290 million in 2024, representing a 138% conversion ratio of non-GAAP net income, with full-year operating cash flow of $532 million versus $455 million.
- •Process chromatography delivered over 20% growth in 2025, and the Stilla acquisition is now expected to be accretive by mid-2026, six to twelve months earlier than the initial view.
- •Full-year results landed within revised guidance for both revenue and operating margin, and the company made tangible progress lowering its cost base through restructuring and tighter expense discipline.
- •Early signs of stabilization emerged across core markets with NIH funding set, improving biopharma funding, and a diagnostics return to growth.
What went wrong
- •Gross margin did not meet expectations; Q4 non-GAAP gross margin fell to 52.5% from 53.9% a year ago, and full-year non-GAAP gross margin declined to 53.3% from 55%, on reduced fixed manufacturing absorption and higher material costs.
- •Q4 gross margin was pressured by higher-than-anticipated supply chain costs, including expedited freight and overtime, as the extended U.S. government shutdown shifted sales late in the quarter, forcing 90 days of work into 30 days; procurement initiatives also progressed slower than expected.
- •Q4 GAAP operating loss of approximately $119 million included $173 million of impairment charges for purchased intangibles and other items from discontinuing and reprioritizing certain R&D programs.
- •Life Science segment sales fell 2.6% reported (4% currency neutral) on the constrained academic research and biotech funding environment, with Americas consumables flat year-over-year due to the government shutdown.
- •Q4 non-GAAP operating margin declined to 12% from 13.8%, and full-year non-GAAP EPS fell to $9.92 from $10.31.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Operating margin | FY2026 | Not previously given | 12%-12.5% | new |
| ddPCR portfolio growth | FY2026 | Not previously given | Mid single digit | new |
| Process chromatography impact to operating margin | FY2026 | Not previously given | -50 bps headwind | new |
| Process chromatography growth | FY2027 | Mid single digit longer term | Flat to low single digit in 2027, mid single digit beyond | refined timing |
| Stilla accretion timing | FY2026 | Initial view later | Accretive by mid-2026 (6-12 months earlier) | accelerated |
| Clinical Diagnostics growth | FY2026 | Not previously given | 1%-2% | new |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Net sales (Q4) | +3.9% reported (+1.7% currency neutral) to ~$693M | Driven by the Clinical Diagnostics segment |
| Clinical Diagnostics segment sales (Q4) | +8.4% reported (+5.6% currency neutral) to ~$425M | Higher quality control and blood typing product sales plus China diabetes reimbursement annualization |
| Life Science segment sales (Q4) | -2.6% reported (-4% currency neutral) to $268M | Constrained academic research and biotech funding environment |
| ddPCR portfolio (Q4) | Mid single digit growth | Success of the QX700 platform |
| Non-GAAP gross margin (Q4) | 52.5% vs 53.9% | Higher-than-anticipated supply chain costs from government shutdown timing; expedited freight, overtime, slower procurement progress |
| Non-GAAP operating margin (Q4) | 12% vs 13.8% | Impact from lower gross margin |
| Non-GAAP net income (Q4) | $68M ($2.51 EPS) vs $81M ($2.90 EPS) | Excludes Sartorius equity value change; lower margin |
| Full-year net sales | +0.7% reported (flat currency neutral) to $2.583B | Diagnostics growth offset by Life Science decline |
| Full-year non-GAAP operating margin | 12.1% vs 12.9% | Gross margin headwinds |
| Full-year free cash flow | ~$375M vs $290M | Focused efforts on working capital efficiency |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Gross margin / supply chain costs | Reduced absorption and material costs through 2025 | Q4 pressured by execution-related supply chain costs from government shutdown; described as execution-related not structural, with corrective actions initiated | worsened, actions underway |
| Process chromatography | Strong 2025 (>20% growth), high single digit FY2026 framing | Vaccine customer demand changes lowered FY2026 outlook; -50 bps operating margin headwind; flat to low single digit in 2027, mid single digit beyond | deteriorating near-term |
| ddPCR / QX700 | Funnel building, entry-level receptivity | Meaningful instrument sales acceleration; mix shifted to ~one-third instruments from ~20%; qPCR conversions and competitive wins; mid-single-digit FY2026 growth | improving |
| Academic/government funding | Cautious, no budget flush | Cautious spending persisted; NIH budget passed may support sentiment but institutions focused on staffing over capital equipment | stabilizing |
| Biopharma funding | Gradual improvement anticipated | Conditions improved in H2 2025, skewed to later-stage biotech; modest core life science recovery anticipated in 2026 | improving |
| M&A | Looking at assets opportunistically | Actively looking for additional assets to accelerate top line and margin expansion; Stilla cited as model of measured scale | active |
Q&A summary
Can you unpack the Stilla contribution versus legacy ddPCR and why mid-single digit is the right go-forward rate?
Strong QX700 sales hit Q4 targets, with qPCR conversions and continued legacy QX200/600 movement; QX700 dominated. The instrument mix moved from about 80%+ assays / 20% instruments to roughly two-thirds assays / one-third instruments. Mid-single-digit guidance reflects the large consumables base growing at about mid-single digit, with upside potential as the market stabilizes.
What are the recent process chromatography guideline changes around vaccines and the impact?
A family of vaccines saw changed expectations of who would be vaccinated by geography, so a customer changed its manufacturing strategy due to a demand shortfall. Bio-Rad was notified late last year while preparing the 2026 plan, and that is the impact on the business.
On the 2025-to-2026 operating margin bridge, the 12%-12.5% range seems conservative given IP R&D rolling off and the Q4 GM issue not recurring - what is being missed?
The Process Chromatography impact is 50 basis points to operating margin, which brings the range down. Some Q4 costs are not expected to recur and operational improvements are progressing, with some mix improvement. QX700 ddPCR growth offers possible margin enhancement as those are strong-margin products.
Why is process chromatography only a mid-single-digit long-term grower rather than faster?
Changing conditions late in Q4 from government regulations and customer efficiencies plus a desire to be conservative. Strength in clinical-phase customers and a growing pipeline that can move to commercial could support a higher rate, but with all moving pieces they set a reasonable mid-single-digit long-term target. The portfolio's commercial products are over-indexed to vaccines versus the bioprocess industry average.
Why is clinical diagnostics only guided to 1%-2% when it was a 2%-3% grower pre-COVID?
It is a mix of the portfolio: quality controls lead and are doing well, but some platforms face weaker markets, some reliant on China. It reflects product mix and geographies.
How should we interpret the lack of a buyback this quarter given $1.5 billion of cash?
There is nothing to read into it; the company looks at buybacks opportunistically. They are actively looking at assets, but the absence of a buyback should not be a leading indicator of any particular event.