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    BIO
    Earnings call· Jun 2026(Q2 FY26)

    BIO-RAD LABORATORIES Q2 FY26 earnings call BIO

    Aug 4, 2026 Source

    Executive summary

    Bio-Rad Q2 FY26 — Digital PCR Drives Growth Amidst Soft End Markets

    Bio-Rad navigated a challenging Q2 FY26 with flat reported revenue and a slight currency-neutral decline, primarily impacted by ongoing softness in the academic research market and China. Despite these headwinds, the company saw sequential improvement, driven by a return to growth in Clinical Diagnostics and strong performance in Digital PCR instrument sales. Management is implementing a significant restructuring program to enhance agility and efficiency, aiming for substantial cost savings and operating margin expansion by 2027, while reaffirming full-year guidance.

    Highlights

    4

    • Clinical Diagnostics returned to modest currency-neutral growth, led by quality controls and blood typing portfolio.

    • Digital PCR revenue grew 6% year-over-year, with instrument revenue up over 20%, indicating strong customer demand.

    • Stilla Technologies acquisition accelerated revenue growth and delivered margin performance ahead of original expectations.

    • Restructuring program expected to yield $30M-$35M in net annual cost savings by end of 2027, with 40-50 bps operating margin expansion in 2027.

    Concerns

    4

    • Total company revenue was essentially flat as reported and down 1.9% currency-neutral year-over-year.

    • Life Science segment revenue decreased 5.1% currency-neutral, primarily due to softness in the academic research market and tough process chromatography comps.

    • China revenue declined in the high teens, representing an estimated $4M headwind for the remainder of the year.

    • Non-GAAP operating margin declined to 12.5% from 13.6% in Q2 2025, though it improved sequentially from Q1 2026.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year currency-neutral revenue growth
    between minus 3% and plus 0.5%
    high materiality
    High
    Full-year Life Science segment currency-neutral growth
    between minus 3% and minus 1%
    medium materiality
    High
    Full-year Clinical Diagnostics segment currency-neutral revenue growth
    between minus 3% and plus 1%
    medium materiality
    High
    Q3 sequential revenue
    flat to Q2
    medium materiality
    High
    Q4 sequential revenue ramp
    mid-single-digit percentage ramp from Q3
    medium materiality
    High
    Full-year non-GAAP gross margin
    between 53% and 54%
    high materiality
    High
    Full-year non-GAAP operating margin
    between 10% and 12%
    high materiality
    High
    Full-year free cash flow
    approximately $290 million to $340 million
    high materiality
    High
    Net cost savings from restructuring
    $30 million to $35 million
    high materiality
    High
    Operating margin expansion from restructuring
    40 to 50 bps
    high materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Life Science
    Primarily driven by ongoing challenges in academic research market and a tough process chromatography year-over-year comparison. Currency-neutral sales decreased in Americas and Asia Pacific, partially offset by increased sales in EMEA.
    Excluding process chromatography, Life Science revenue: approximately flat currency-neutral
    		$252M-4.1% reported, -5.1% currency-neutral——
    Clinical Diagnostics
    Returned to modest currency-neutral growth, led by quality controls in our blood typing portfolio. Growth in Americas was offset by revenue declines in the broader Asia Pacific region. Compared to $389M in Q2 2025.
    		$399M+2.6% reported, +8.3% currency-neutral——
    Asia Pacific (ex-China)
    Grew 6% on a currency-neutral basis, with growth across most major product areas.
    		—+6% currency-neutral——
    China
    Represents approximately 6% of Bio-Rad's total revenue. Decline reflects timing of quality control orders and softer demand for life science instruments.
    		—declined in the high teens——
    EMEA
    Returned to growth with Middle East revenue increasing 7% year-over-year.
    		—returned to growth——
    Middle East
    Channel partners began replenishing approximately $3 million in inventory during the quarter, although underlying customer demand has not yet stabilized.
    		—+7%——

    Operational metrics

    21
    Total Company Revenue (currency-neutral growth)
    -1.9%YoY
    Q2 FY26

    Total company revenue was approximately $651 million, essentially flat as reported and down 1.9% on a currency-neutral basis compared with the prior year's $652 million.

    Total Company Revenue (sequential growth)
    +10%QoQ
    Q2 FY26

    Sequentially, revenue was up 10%, reflecting improved performance as our teams overcame challenging end market dynamics in the first quarter.

    Life Science Revenue (H1 currency-neutral growth)
    -4.5%YoY
    H1 FY26

    Life Sciences constant currency decline in the first half of the year.

    Digital PCR Revenue (currency-neutral growth)
    +6%YoY
    Q2 FY26

    Currency-neutral ddPCR revenue increased 6% year-over-year.

    Digital PCR Instrument Revenue (growth)
    +20%YoY
    Q2 FY26

    Digital PCR instrument revenue growing more than 20%.

    Digital PCR Consumables Revenue
    down slightly year-over-year, increased sequentiallyYoY/QoQ
    Q2 FY26

    Digital PCR consumables revenue was down slightly year-over-year, but increased sequentially. Consumables pull-through has not yet reached the level we ultimately expect.

    Non-GAAP Gross Margin
    53.9%vs 53.7% in Q2 FY25
    Q2 FY26

    On a non-GAAP basis, second quarter gross margin was 53.9% versus 53.7% in the year ago period. Improved sequentially from 53.1% in Q1 due to favorable manufacturing absorption, partially offset by unfavorable product mix and elevated logistics costs.

    SG&A Expense (% of sales)
    32.6%vs 31.9% in Q2 FY25
    Q2 FY26

    SG&A expense for the second quarter of 2026 was $212 million or 32.6% of sales compared to $208 million or 31.9% in Q2 of 2025. Non-GAAP SG&A expense was $209 million versus $201 million in the year ago period, primarily due to higher employee-related costs.

    R&D Expense (% of sales)
    9.4%vs 9.3% in Q2 FY25
    Q2 FY26

    Research and development expense on a GAAP and non-GAAP basis in the second quarter of 2026 was $61 million or 9.4% of sales compared to $61 million or 9.3% of sales in Q2 of 2025.

    Non-GAAP Operating Margin
    12.5%vs 13.6% in Q2 FY25
    Q2 FY26

    On a non-GAAP basis, second quarter operating margin was 12.5% compared to 13.6% in Q2 of 2025. This represents a sequential improvement from 6.6% in the first quarter of 2026.

    Non-GAAP Net Income
    $70Mvs $71M in Q2 FY25
    Q2 FY26

    Second quarter 2026 non-GAAP net income, which excludes the impact of the change in equity value of the Sartorius shares was $70 million or $2.62 diluted earnings per share versus $71 million or $2.61 diluted earnings per share for Q2 of 2025.

    Non-GAAP Diluted EPS
    $2.62vs $2.61 in Q2 FY25
    Q2 FY26

    Second quarter 2026 non-GAAP diluted earnings per share was $2.62 versus $2.61 diluted earnings per share for Q2 of 2025.

    Shares Repurchased
    110,000
    Q2 FY26

    During the second quarter of 2026, we repurchased approximately 110,000 shares through our buyback program at a total cost of approximately $32 million at an average price of $281.57.

    Buyback Cost
    $32M
    Q2 FY26

    Total cost of approximately $32 million for share repurchases.

    Average Buyback Price
    $281.57
    Q2 FY26

    Average price of $281.57 for shares repurchased.

    Remaining Buyback Authorization
    $206M
    as of June 30, 2026

    As of June 30, we have approximately $206 million available for additional buybacks under the current Board authorized program.

    Restructuring Cost Savings (net annualized)
    $30M-$35M
    Annualized

    On an annualized basis, we expect to achieve $30 million to $35 million of net cost savings after reinvestment with most of this realized by the end of 2027.

    Restructuring Operating Margin Expansion
    40-50
    FY27

    In 2027, we estimate approximately 40 to 50 bps of operating margin expansion.

    China Revenue (% of total)
    6%
    Q2 FY26

    China represents approximately 6% of Bio-Rad's total revenue.

    China Headwind (remainder of year)
    $4M
    H2 FY26

    China dynamics discussed, which represent an estimated $4 million headwind for the remainder of the year.

    Middle East Inventory Replenishment
    $3M
    Q2 FY26

    Channel partners began replenishing approximately $3 million in inventory during the quarter.

    Industry KPIs

    7
    MetricValueDetails
    Revenue EPS guidancecurrency-neutral revenue growth between minus 3% and plus 0.5%; non-GAAP operating margin between 10% and 12%; free cash flow $290M to $340M%
    China revenue exposuredeclined in the high teens%
    M a contribution synergiesaccelerated revenue growth and is delivering margin performance ahead of our original expectations
    Segment organic revenue growthClinical Diagnostics: +8.3% currency-neutral; Life Science: -5.1% currency-neutral%
    Bioprocessing orders book to billdeclined year-over-year
    Instruments vs consumables services mixdown slightly year-over-year
    Organic core revenue growth by end marketapproximately flat

    Deals & partnerships

    1
    Stilla TechnologiesAcquisition of a Droplet Digital PCR company.

    The acquisition expanded Bio-Rad's portfolio, strengthened existing capabilities, and created durable value. It is now at its first anniversary.

    Risks & headwinds

    5
    Academic Research Market SoftnessOngoing, but early indicators encouraging for gradual recovery.

    Life Science revenue decreased 5.1% currency-neutral, primarily due to this.

    Mitigation: Monitoring NIH funding outlays, adapting business model.

    China Market DynamicsRemainder of 2026.

    China revenue declined in the high teens, estimated $4M headwind for remainder of year.

    Mitigation: Adapting business model, operationalizing in-China for-China manufacturing capability, participating in broader range of tenders.

    Middle East Volatility & Logistics CostsSecond half of 2026.

    Middle East revenue increased 7% due to $3M inventory replenishment, but volatility expected to continue.

    Mitigation: Local teams actively working to keep product flowing, factored into guidance.

    Product Mix ShiftCurrent.

    Instruments carry a lower margin profile than consumables.

    Mitigation: Driving improved cost structure in product portfolio, managing mix, new higher-margin products in pipeline.

    Process Chromatography Tough ComparablesQ3 FY26.

    Modest drag on Q3 growth.

    Mitigation: Factored into guidance.

    What to watch in Q3 FY26

    5

    Academic & Government Market Recovery

    Next quarter / H2 FY26
    CurrentStill soft, particularly in Americas; NIH funding outlays increasing.
    TargetSustained pattern of purchasing activity following increased NIH funding.

    Why it matters

    Indicates a durable recovery in a key end market for the Life Science segment.

    In the academic and government market, demand remains below historical levels, particularly in Americas. NIH funding outlays have begun to increase year-over-year, but purchasing activity typically lags funding. The recent indicators are encouraging, but we need to see a more sustained pattern before concluding the market has entered a durable recovery.

    Q&A highlights

    7

    Was the >20% ddPCR instrument growth due to one-time factors or sustainable market dynamics?

    Management stated the growth was broad-based, driven by successful integration of Stilla products, competitive wins against qPCR, and expansion across geographies and segments (academic and biopharma).

    “It really is broad-based. We're very proud that right out of the gate, when we closed the acquisition at the end of June last year, we're well prepared to make the transition from our legacy portfolio to include these new systems from Stilla.”

    asked by Jack Meehan · answered by Jonathan DiVincenzo

    2 min read6 chapters

    Detailed Narrative

    01

    Market Dynamics and Recovery Signals

    The company observed early signs of stabilization in biopharma, particularly among later-stage and commercial-scale biotech customers, though early-stage companies remain cautious due to funding conditions. Academic and government markets, especially in the Americas, are still soft, but NIH funding outlays have begun to increase year-over-year. Management emphasized the need for a sustained pattern of purchasing activity before concluding the market has entered a durable recovery.

    02

    Digital PCR Strength and Strategic Acquisitions

    Digital PCR (ddPCR) was a key growth driver in Q2 FY26, with currency-neutral revenue up 6% and instrument sales growing over 20%. The QX-700 system is achieving competitive wins and conversions from qPCR, supported by Bio-Rad's broad assay menu and installed base. The acquisition of Stilla Technologies, now at its first anniversary, has accelerated revenue growth and exceeded original margin expectations, reinforcing a strategy of disciplined M&A for differentiated commercial products.

    03

    China and Middle East Headwinds

    China revenue, representing approximately 6% of Bio-Rad's total, declined in the high teens due to timing of📎 quality control orders and softer life science instrument demand, creating an estimated $4 million headwind for the remainder of the year. The Middle East saw a 7% revenue increase driven by channel partner inventory replenishment of approximately $3 million, but underlying customer demand has not yet stabilized. Regional volatility is also contributing to higher global freight and transportation costs.

    04

    Organizational Transformation and Efficiency

    Bio-Rad is undergoing a multi-year transformation to enhance agility and efficiency, with the latest phase involving organizational structure changes, workforce adjustments, and facility rationalization. This initiative is not solely a cost reduction program but aims to reallocate resources towards innovation and customer needs. Artificial intelligence is playing a significant role, enabling product development teams to complete 12 months of software development in 6 weeks and develop new cloud-based functionality in one month.

    05

    Restructuring and Financial Impact

    The announced restructuring is expected to be substantially completed by the end of 2027, yielding $30 million to $35 million in net annual cost savings after reinvestment. This is projected to contribute 40 to 50 basis points of operating margin expansion in 2027. Management noted minimal savings are expected in 2026 due to timing, but confirmed these actions are incremental to underlying margin expansion efforts and will primarily impact OpEx areas.

    06

    Capital Allocation and Shareholder Engagement

    The company maintains a disciplined approach to capital allocation, exemplified by the successful Stilla acquisition. The Sartorius AG stake is considered a valuable, monetizable asset providing optionality at the right time and price. Bio-Rad is engaged in active, constructive dialogue with Elliott Management, expressing broad alignment on objectives to improve execution, sharpen capital allocation, and close the valuation gap between the company's value and its share price.

    AI-generated summary of the company’s earnings call. Not investment advice.