Snapshot
Bio-Rad Laboratories, Inc. reported $592M of revenue in Q1 2026, up 1.1% year over year, with diluted EPS of $-19.55 and an operating margin of 5.8%.
- Revenue
- $592M
- YoY growth
- +1.1%
- Diluted EPS
- $-19.55
- Operating margin
- 5.8%
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 generally 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.
- •We reported Q1 results within our revenue guidance as we navigated several external pressures, most notably associated with the ongoing conflict in the Middle East.
- •We haven't highlighted this in the past, but in 2025, the region represented over 9% of our diagnostic segment, primarily driven by our blood typing franchise.
- •The conflict substantially reduced our first quarter 2026 revenues, and depending upon the timing of resolution, will be a significant headwind for revenue and margin for full year 2026.
- •Despite the macro headwinds, our teams remain focused on executing our strategic initiatives, accelerating innovation, and driving further efficiencies across the organization to increase competitiveness.
- •Academic demand remained constrained, particularly in Americas, where our customers' budgets have been significantly impacted by changes in funding.
- •On the commercial side, ensuring we capture our fair share of demand in a constrained market requires our sales organization to work differently.
- •We have sharpened the focus of our commercial teams on segment-level prioritization, directing coverage towards customers with active funding, accelerating conversions from our existing installed base, and competing aggressively where competitive displacement opportunities exist.
- •Ahead of schedule, the team now has enabled over 99% of our digital PCR assays to be available on the new QX700 series, which is driving instrument growth.
- •In clinical diagnostics, we delivered modest reported growth of just under 2%.
What went well
- •Q1 results landed within the company's revenue guidance despite significant external pressures, with net sales of approximately $592 million, up 1.1% on a reported basis versus Q1 2025.
- •ddPCR instrument revenue grew 24% over the prior year, a leading indicator viewed as a strong sign of market share gains given current conditions, driven by the QX700 platform's competitive wins and qPCR conversions.
- •Ahead of schedule, the team enabled over 99% of digital PCR assays to be available on the new QX700 series, supporting instrument growth, and the Stilla acquisition remains on track to be accretive by mid-year.
- •The company began manufacturing select life science instruments in China for China, improving local responsiveness, enabling tender participation, and minimizing tariff exposure.
- •Free cash flow was $78 million, representing a 153% conversion ratio of non-GAAP net income, and quality systems and immunohematology franchises showed signs of strength outside the affected region.
What went wrong
- •The ongoing conflict in the Middle East, which represented over 9% of the diagnostic segment in 2025, substantially reduced Q1 2026 revenues with an $11 million impact in the quarter and is expected to be a significant headwind for full-year revenue and margin.
- •On a currency-neutral basis net sales decreased 4.2% year-over-year, driven by lower sales in both Life Science and Clinical Diagnostics segments.
- •Non-GAAP operating margin fell sharply to 6.6% from 10.8% in Q1 2025, reflecting lower gross margin year-over-year.
- •Non-GAAP gross margin declined to 53.1% from 53.8%, hurt by unfavorable manufacturing absorption from lower Middle East revenue (40 bps), higher instruments-versus-consumables mix (30 bps), higher freight fuel surcharges (20 bps), and FX (20 bps).
- •The ddPCR portfolio was essentially flat as biopharma consumables softened and academic/biopharma research consumables fell 3.9%; process chromatography declined 13% currency neutral.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| FY2026 guidance | FY2026 | Prior 2026 guidance | Adjusted downward due to ongoing Middle East conflict (demand softness and channel/logistics challenges) | lowered |
| Process chromatography growth path | FY2027 | Flat to low single digit in 2027, mid single digit beyond | Low single digit next year on path back to mid single digit | reaffirmed |
| Q2 revenue phasing | Q2 2026 | Not previously given | ~5% lift from Q1; core potentially down ~5%-6% organic | new |
| Q2 gross margin | Q2 2026 | Not previously given | Tick down slightly versus Q1 due to three months of elevated freight | new |
| Operating margin ambition | Near term | Not previously framed this way | Mid-teens operating margin in the near term | reaffirmed ambition |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Net sales | +1.1% reported (-4.2% currency neutral) to ~$592M | Lower sales in both Life Science and Clinical Diagnostics segments |
| Life Science segment sales | Flat reported (-4.3% currency neutral) to $229M | Ongoing academic research market challenges, particularly in the Americas |
| Clinical Diagnostics segment sales | +1.9% reported (-4.1% currency neutral) to ~$364M | Revenue declines in EMEA from the Middle East regional conflict ($11M impact) |
| ddPCR portfolio | Essentially flat | Softer biopharma consumables as customers shifted R&D priorities, despite instrument growth |
| ddPCR instrument revenue | +24% | QX700 platform driving competitive wins and qPCR conversions |
| Process chromatography | -13% currency neutral | As expected, year-over-year decline |
| Non-GAAP gross margin | 53.1% vs 53.8% | Unfavorable Middle East absorption, instrument mix, freight surcharges, and FX |
| Non-GAAP operating margin | 6.6% vs 10.8% | Lower gross margin year-over-year |
| Non-GAAP net income | $51M ($1.89 EPS) vs $71M ($2.54 EPS) | Excludes Sartorius equity value change; lower margin |
| Free cash flow | $78M vs $96M | Lower operating cash generation; 153% conversion ratio |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Middle East conflict | Region was a fast-growing market expected to contribute growth in 2026 | Substantially reduced Q1 revenue ($11M impact, >9% of diagnostics in 2025); significant full-year headwind, treated as transitory not permanent | deteriorating |
| Academic research funding | Cautious, stabilizing | Demand remained constrained, particularly Americas; modest NIH increase but continued disruption and lag between funding and purchasing | soft |
| Biopharma funding | Improved in H2 2025, skewed later-stage | Early signs of stabilization; later-stage robust, early-stage cautious; gradual improvement expected through the year | improving |
| ddPCR portfolio | QX700 accelerating, mid-single-digit FY2026 growth | Instrument revenue up 24% and 99%+ assays enabled on QX700, but consumables soft (down low double digits); strongest position in years | mixed - instruments strong, consumables soft |
| Process chromatography | -50 bps FY2026 headwind, vaccine demand changes | Q1 played out as expected; no change in inflection seen; low single digit next year on path to mid single digit | stable/as expected |
| M&A strategy | Actively looking at assets | Targeting companies with $100M-$500M revenue and demonstrated revenue/margin profiles, complementary, not transformative; Sartorius position monetizable optionality | active, more defined |
| China diagnostics | No VBP impact, monitoring | NHSA cost-containment update during quarter, but nothing impacting Bio-Rad to date per local teams | stable |
Q&A summary
Why was the Middle East impact more prominent for Bio-Rad than peers?
Bio-Rad has been very successful winning diagnostic tenders across the region for years, reaching about 9% of the diagnostic business and mid-single digit for the company overall, so exposure may differ from peers. The channel slowed; revenue still occurred but fell short of expected solid double-digit growth, and recovery will take time after any resolution, informing the new guide.
What cost actions are planned to protect and grow earnings toward the mid-teens operating margin ambition?
Several things are under evaluation; discretionary spend has already been tamped down. If the impact continues it will be more meaningful, requiring more significant actions. Given recurring challenges (tariffs, Middle East), there are structural considerations across all functional areas to run the business more efficiently and nimbly.
Were ddPCR consumables down low double digits, and is there qPCR cannibalization acceleration?
Confirmed consumables were down low double digits. Instrument sales were pleasing across QX700 and legacy QX100/200. Consumables softness reflected academic and some biopharma project timing and absorbing strong prior-year first-half growth. Bio-Rad is growing its installed base via qPCR share gains and competitive wins, describing the ddPCR portfolio as the healthiest in some time.
How does Q2/Q3 revenue phasing look off the Q1 base?
Q1 is the seasonal low. Expect about a 5% lift from Q1 to Q2, a slight further lift into Q3 (versus relatively flat Q2-Q3 in prior years), then a seasonal Q4 jump. Drivers beyond carved-out Middle East revenue include quality controls batch releases and blood typing upticks in Q3 and Q4. Core could be down about 5%-6% organic in Q2, with gross margin ticking down slightly on three months of elevated freight.
Should the more detailed M&A commentary signal something more actionable near term?
No; it is just explaining part of the strategy. The focus remains on developing and growing the organic business, with M&A as another piece of the puzzle - diving deeper on a piece of the strategy rather than signaling an imminent transaction.
Why are decremental margins on lower revenue so severe in the guidance, and are there offsets?
Near-term actions are in process and under further evaluation, with broader actions to stay tuned for. Increased fuel and logistics costs have been absorbed, and the company is deciding on appropriate surcharges or other mitigations; a comprehensive set of levers exists to improve margins amid the conflict and broader challenges.