Comment on an FT article reporting consideration of selling the point-of-care business and the rationale if true.

Brian Blaser declined to comment on market rumors. He stated that the highest priority is maximizing long-term shareholder value and that the board and management regularly evaluate a broad range of opportunities, including portfolio options. However, the current focus is on executing the strategy, improving cash conversion, reducing leverage, and driving operational performance. “I'm not going to comment on that. Just as a general matter, we don't comment on market rumors like that. But I will say that our highest priority is maximizing long-term shareholders value and just as a matter of good government governance our board and our management team is regularly evaluating a broad range of opportunities including portfolio opportunities to strengthen the business and improve shareholder returns but our current focus right now is on executing our strategy as Micah said, improving cash conversion, reducing leverage and driving operational performance across our portfolio.”

Elaborate on the early indicators suggesting a reduced respiratory forecast, such as Australia data.

Brian Blaser explained that the company's forecasting approach has changed to assume the lower end of historical respiratory seasons. He cited significantly lower US positivity rates and weaker data from the Southern Hemisphere, which could indicate a later or softer season. This prudent approach is based on these early indicators. “We have seen up until now, you know, our positivity rates in the US are significantly lower than they used to be we're seeing lower strength of data coming out of the southern hemisphere, which at a minimum suggests either a later season or could indicate a softer season.”

How does the company's risk mitigation strategy absorb underperforming parts of the business without major problems for the company as a whole, given strong growth excluding China?

Brian Blaser highlighted the strength of the underlying labs and immunohematology businesses, which represent about 75% of the company and demonstrate mid-single-digit growth with predictable, durable recurring revenue. He stated that aggressive mitigation steps are being taken in China and across the business, including cost improvement opportunities, to manage through challenges and emerge stronger. “When you step back and look at the business excluding respiratory in China, which is basically our labs and immunohepatology business, it's about 75% of the the company last year. Those are really strong, predictable businesses that are supported by really nice underlying business model attributes. They have long contracts, very durable recurring revenue streams, large base of instruments, and so on.”

QDEL

QuidelOrtho (QDEL) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 6, 2026

Source: earnings call transcript

Executive summary

QuidelOrtho Q2 FY26 — Core Business Strength Amid China Headwinds and Softer Respiratory Season

QuidelOrtho reported mixed Q2 FY26 results, demonstrating strong underlying performance in its core businesses and geographies outside of China, which drove 6% revenue growth and significant EBITDA margin expansion. However, persistent headwinds in China due to IVD pricing uncertainty and a more cautious outlook for the respiratory season led to a downward revision of full-year financial guidance and the withdrawal of free cash flow guidance. Management is intensely focused on improving cash conversion and reducing leverage.

Highlights

Total revenue increased 2% on a constant currency basis in Q2 FY26.
Revenue outside of China grew 6% year-over-year in Q2 FY26.
Adjusted EBITDA increased 21% to $129 million in Q2 FY26.
Adjusted EBITDA margin expanded 310 basis points to 20% of revenue in Q2 FY26.
Labs revenue outside of China grew 9%, Immunohematology revenue outside of China increased 5%, and Triage expanded by 9%.

Concerns

China revenue declined 23% year-over-year in Q2 FY26 due to IVD pricing uncertainty.
Full-year 2026 revenue guidance revised down to $2.52 billion to $2.60 billion.
Full-year 2026 adjusted EBITDA guidance revised down to $540 million to $560 million.
Operating cash flow was negative $111 million and free cash flow was negative $136 million in Q2 FY26.
Free cash flow guidance for 2026 was withdrawn due to market uncertainties.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	$2.52 billion to $2.60 billion high materiality	FY26	High
Full-year 2026 Adjusted EBITDA	$540 million to $560 million high materiality	FY26	High
Full-year 2026 Adjusted EBITDA Margin	21% to 22% medium materiality	FY26	High
Full-year 2026 Adjusted EPS	$0.65 to $0.90 high materiality	FY26	High
Full-year 2026 Free Cash Flow	Withdrawn high materiality	FY26	Low
H2 FY26 Core Laboratory and Immunohematology Growth (outside China)	3% to 5% medium materiality	H2 FY26	Medium
Respiratory Season Assumption	Consistent with muted activity experienced during H1 FY26 high materiality	H2 FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Total Company (excluding China) Reflects broad-based strength across core franchises and regions on a constant currency basis.	—	6%	—	—
Labs (excluding China) Strong contribution to overall growth.	—	9%	—	—
Immunohematology (excluding China) Strong contribution to overall growth.	—	5%	—	—
Triage Expanded performance.	—	9%	—	—
China Significant headwind due to uncertainty related to proposed IVD pricing guidelines.	—	-23%	—	—
North America Largest region, with strong contributions from labs and triage point of care business.	—	6%	—	—
J-PAC Driven by strong performance in Japan and India.	—	10%	—	—
Latin America Notable strength in Brazil and Central America.	—	8%	—	—

Product announcements

Product	Type	Timeline	Details
NULEXA (Lex Point of Care Molecular Platform)	launch	customer placements and test utilization to gain steady momentum as we progress into the respiratory season later this year; objective to enter 2027-2028 respiratory season with a growing installed base

Deals & partnerships

Griffles Termination of joint business arrangement $25 million

A $25 million payment was made in Q2 FY26 as part of the termination of the joint business arrangement. Remaining payments are scheduled for 2027 and 2028.

LECS Acquisition of Lex Point of Care Molecular Platform $97 million

The acquisition of the Lex Point of Care Molecular Platform was completed in April, with $97 million in cash deployed during Q2 FY26.

Risks & headwinds

Uncertainty related to China IVD pricing guidelines Persisting through the remainder of 2026.

China revenue declined 23% year-over-year in Q2 FY26. The second draft of guidelines differs meaningfully from the preliminary draft and expands pilot implementation from three to six provinces.

Mitigation:Working closely with teams, customers, and distribution partners in China to adapt commercial and operating plans; focused on protecting the install base, maintaining customer engagement, and aligning commercial resources with the evolving reimbursement environment.

Softer respiratory market and below-average flu season forecast Second half of 2026.

Positivity rates are down markedly compared with 2025. Early indicators are pointing to a below-average 2026-2027 flu season.

Mitigation:Assuming first-half softness continues and modeling second-half respiratory revenues accordingly; taking a more conservative approach to forecasting and aligning cost structure.

High net debt leverage Current.

Net debt leverage was 4.3 times adjusted EBITDA at the end of Q2 FY26.

Mitigation:Improving cash conversion, optimizing returns on instrument investments, enhancing working capital efficiency, rationalizing capital expenditures, and maintaining a disciplined approach to capital allocation.

What to watch in Q3 FY26

China IVD pricing guidelines impact

Next quarter (Q3 FY26 results)

Current China revenue declined 23% YoY in Q2 FY26 due to uncertainty.

Target Stabilization of demand and clarity on guidelines.

Why it matters

The ongoing uncertainty and demand pressure in China are significant headwinds impacting overall revenue and profitability; resolution is key for business recovery in a major market.

While the guidelines and their implementation timelines are not yet final, we believe the uncertainty regarding the guidelines is already impacting customer behavior. As we reviewed market performance data that became available after quarter end, we observed customers adjusting their purchasing and inventory levels more quickly and significantly than we had anticipated.

Find out whether QDEL delivers this. Inve re-checks your case every morning.

Q&A highlights

What proactive steps are being taken to improve balance sheet leverage?

The new CFO, Micah Young, stated his priorities are improving cash conversion, reducing leverage, and increasing returns on invested capital. Specific actions include improving working capital (reducing inventory), optimizing returns on instrument investments, rationalizing capital expenditures, and directing capital towards high-return geographies and businesses.

“I'm focused with this team is on improving working capital, reducing the capital that's tied up into inventory, optimizing the returns on our instrument investments, and rationalizing capital expenditures, and directing capital towards the geographies and businesses generating the highest returns.”

asked by Jack Meehan · answered by Micah Young

2 min read 7 chapters

Detailed narrative

Q2 Performance Highlights and Geographic Strength

QuidelOrtho reported a 2% constant currency revenue increase for Q2 FY26, with revenue outside of China growing a robust 6% year-over-year. This growth was broad-based, with Labs revenue outside China up 9%, Immunohematology up 5%, and Triage expanding by 9%.

Geographically, North America grew 6%, J-PAC (Japan and India) increased 10%, and Latin America (Brazil and Central America) saw 8% growth, underscoring the strength of the diversified global business.

Profitability and Operational Efficiency

The company demonstrated strong profitability, with adjusted EBITDA increasing 21% to $129 million and adjusted EBITDA margin expanding 310 basis points to 20% of revenue. This margin expansion, achieved during a seasonally weakest quarter, highlights the effectiveness of operational improvement initiatives, disciplined expense management, and strategic resource allocation towards high-return opportunities.

NULEXA Commercialization Progress

Following the acquisition of LECS in April, QuidelOrtho is on track with the commercialization of the Lex Point of Care Molecular Platform, now branded NULEXA. The teams have made substantial progress in manufacturing scale-up, supply chain readiness, and commercial launch capabilities.

Early customer engagement is encouraging, and the company expects NULEXA to gain steady momentum in placements and test utilization as the respiratory season approaches, serving as a scalable platform for future menu expansion.

Significant China Headwinds

China revenue declined 23% year-over-year, representing a significant headwind. This decline is attributed to uncertainty surrounding proposed IVD pricing guidelines, which have impacted customer buying behavior and inventory levels. The second draft of these guidelines, released in June, differs significantly from the preliminary version and expands pilot implementation to six provinces, creating ongoing market uncertainty.

Cautious Respiratory Season Outlook

The respiratory market remained softer in Q2 FY26, with positivity rates markedly down compared to 2025. Early indicators suggest a potentially below-average 2026-2027 flu season. Consequently, the company has adopted a more prudent forecasting approach, modeling second-half respiratory revenues based on continued first-half softness rather than assuming a typical seasonal uptick.

Revised Guidance and Cash Flow Withdrawal

Due to the persistent challenges in China and the cautious respiratory season forecast, QuidelOrtho revised its full-year 2026 guidance downwards for revenue ($2.52B-$2.60B), adjusted EBITDA ($540M-$560M), and adjusted EPS ($0.65-$0.90). Additionally, free cash flow guidance for 2026 was withdrawn, reflecting the current market dynamics and their impact on working capital, though improving cash performance remains a key priority.

New CFO Priorities: Cash Conversion and Leverage Reduction

New CFO Micah Young outlined his top priorities: improving cash conversion, reducing leverage (currently 4.3x net debt leverage), and increasing returns on invested capital. He emphasized evaluating opportunities to enhance working capital efficiency, optimize instrument investments, rationalize capital expenditures, and maintain a disciplined capital allocation framework to strengthen the balance sheet.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.