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    TECH
    Earnings call· Mar 2026(Q3 FY26)

    BIO-TECHNE Q3 FY26 earnings call TECH

    May 6, 2026 Source

    Executive summary

    Bio-Techne Q3 FY26 — Mixed Market, Strong Pharma, Spatial Biology Growth

    Bio-Techne navigated a mixed market in Q3 FY26, with strong performance from large pharma and stabilizing U.S. academic demand, but continued softness in emerging biotech. The company experienced a 400 basis point headwind from specific cell therapy and OEM order timing, resulting in a 2% organic revenue decline. Strategic brand alignment and leveraging AI are key initiatives, with a positive outlook for fiscal 2027 as market conditions are expected to normalize and company-specific headwinds abate.

    Highlights

    5

    • Spatial Biology portfolio delivered mid-teens growth, with COMET platform growing over 65% and achieving a record backlog.

    • GMP protein portfolio grew nearly 50% year-over-year when excluding two fast track cell therapy customers.

    • Large pharma customers delivered low double-digit growth for the sixth consecutive quarter.

    • China end market achieved positive organic growth for the fourth consecutive quarter (low single digits).

    • Adjusted operating margin improved sequentially to 34.2%, representing a 310 basis point improvement over fiscal Q2.

    Concerns

    5

    • Overall organic revenue declined 2% for the quarter.

    • Emerging biotech revenues declined high single digits, offsetting large pharma strength.

    • Protein Sciences organic revenue declined 4% (or 2% underlying excluding timing impacts).

    • Bio-Techne Diagnostics declined low single digits due to order timing from certain large customers.

    • Q4 FY26 organic growth is expected to be approximately flat.

    Guidance & targets

    4
    CategoryTargetConfidence
    Q4 FY26 Organic Growth
    approximately flat
    high materiality
    High
    Q4 FY26 Underlying Organic Growth (excluding cell therapy headwinds)
    low single-digit
    medium materiality
    High
    Q4 FY26 Margin Expansion
    approximately 100 basis points
    medium materiality
    High
    FY27 Organic Growth
    at least mid-single-digit growth
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Protein Sciences
    Operating margin down 140 bps year-over-year due to unfavorable product mix and volume deleverage, partially offset by profitability initiatives. Growth was led by proteomic analysis instruments, benefiting from large pharma and academic strength. Core reagents impacted by challenging biotech environment and U.S. government shutdown effects.
    Organic revenue decline: 4%Foreign exchange benefit: 3%Organic growth (excluding cell therapy and OEM timing): +2%Proteomic analysis instrument franchise growth: double-digit (academic), mid-single-digit (overall)Core portfolio of research reagents and assays decline: mid-single digitsCore portfolio decline (excluding commercial supply timing): low single digits
    		$226.2 million-1%—44.2%
    Diagnostics and Spatial Biology
    Segment operating margin improved from 9.4% last year, driven by the Exosome Diagnostics divestiture and productivity initiatives, partially offset by unfavorable mix among OEM customers. Expect continued margin expansion with COMET Spatial Biology platform scaling.
    Exosome Diagnostics divestiture impact: -8%Foreign exchange benefit: 1%Organic growth: 3%Bio-Techne Diagnostics decline: low single digitsSpatial Biology growth: mid-teensCOMET platform growth: over 65%RNA scope portfolio growth: high single digitsBio-Techne Diagnostics growth (trailing 12-month): low single digits
    		$85.6 million-4%—12.1%

    Operational metrics

    36
    Adjusted Operating Margin
    34.2%up 310 basis points sequentially
    Q3 FY26

    Represents a sequential improvement over fiscal Q2.

    Foreign Exchange Impact on EPS
    $0.02favorable
    Q3 FY26

    Favorable impact on adjusted EPS.

    Foreign Exchange Impact on Revenue
    2%tailwind
    Q3 FY26

    Favorable impact on total revenue.

    Exosome Diagnostics Divestiture Impact on Revenue
    2%headwind
    Q3 FY26

    Negative impact on total revenue.

    Cell Therapy Customer Timing Impact on Revenue
    3%headwind
    Q3 FY26

    Due to order timing from two largest cell therapy customers with FDA Fast Track designation.

    OEM Commercial Supply Order Timing Impact on Revenue
    1%headwind
    Q3 FY26

    Large OEM commercial supply order typically received in Q3 was received in Q2 this year.

    Adjusted Gross Margin
    70.4%down from 71.6% last year, up 190 basis points sequentially
    Q3 FY26

    Year-over-year decline driven by unfavorable product mix.

    Adjusted SG&A as % of Revenue
    28.7%down 30 basis points compared to 29% last year
    Q3 FY26

    Reflects benefits of structural streamlining and disciplined expense management.

    R&D Expense as % of Revenue
    7.5%compared to 7.8% in the prior year
    Q3 FY26

    Operating leverage partially offset by targeted investments in strategic growth initiatives.

    Adjusted Operating Margin
    34.2%down 70 basis points year-over-year
    Q3 FY26

    Decline driven by unfavorable mix and volume deleverage, partially offset by the Exosome Diagnostics divestiture.

    Net Interest Expense
    $1.3 millionup $0.4 million year-over-year
    Q3 FY26

    Due to the expiration of interest rate hedges.

    Bank Debt
    $200 milliondown $60 million sequentially
    Q3 FY26

    Balance at quarter end, contributing to a total leverage ratio well below 1x EBITDA.

    Other Adjusted Net Operating Income
    $1.3 milliondown $1.8 million from the prior year
    Q3 FY26

    Primarily due to nonrecurring foreign exchange gains in the prior year related to overseas cash pulling arrangements.

    Adjusted Effective Tax Rate
    22.3%up 80 basis points year-over-year
    Q3 FY26

    Driven by geography mix.

    Net Capital Expenditures
    $9.1 million
    Q3 FY26

    Capital expenditures during the quarter.

    Dividends Paid
    $12.5 million
    Q3 FY26

    Returned to shareholders via dividends.

    Average Diluted Shares Outstanding
    157.4 milliondown 1% year-over-year
    Q3 FY26

    At quarter end.

    Cash and Investments Balance
    $209.8 million
    Q3 FY26

    Balance sheet remains strong.

    Underlying Organic Revenue Growth (excluding timing impacts)
    2%
    Q3 FY26

    Adjusted for cell therapy customer timing and large OEM commercial supply order timing.

    GMP Protein Revenue Growth (excluding 2 fast track customers)
    nearly 50%year-over-year
    Q3 FY26

    Strong performance from emerging cell therapy customers.

    Proteomic Analysis Instruments Growth
    mid-single-digit
    Q3 FY26

    Driven by favorable instrument placements and utilization trends.

    Neurology Assay Portfolio CAGR
    50%
    3-year

    Reflects strong adoption of Ella platform in neurodegeneration research.

    Maurice Instruments and Consumables Growth
    double-digit
    Q3 FY26

    Driven by increased embedding into biopharma manufacturing workflows for quality control.

    Core Reagent and Assay Portfolio Decline (excluding OEM timing)
    low single digits
    Q3 FY26

    Reflects strength from large pharma offset by U.S. academic softness and biotech funding environment.

    COMET Multiomic Spatial Platform Growth
    over 65%
    Q3 FY26

    Strong order momentum translated into significant growth.

    RNA scope Portfolio Growth
    high single-digit
    Q3 FY26

    Driven by customer adoption in EMEA and Asia, and increasing use in clinical diagnostic patients in the U.S.

    Cell Therapy Headwind Impact (Q4 FY26)
    approximately 150 basis pointsyear-over-year
    Q4 FY26

    Expected impact on growth, moderating from Q3. Will be fully out of comparisons in FY27.

    GMP Protein Revenue Growth (trailing 12 months)
    17%
    trailing 12 months

    Underlying growth rate for GMP proteins, excluding the impact of the two fast track customers.

    Biotech Funding Activity Rebound (Calendar Q2 2025)
    more than 90%
    Calendar Q2 2025

    Rebound in biotech funding activity, setting up for fiscal 2027.

    Biotech Funding Activity Rebound (Calendar Q3 2025)
    50%
    Calendar Q3 2025

    Rebound in biotech funding activity, setting up for fiscal 2027.

    Biotech Funding Lag
    2 to 3 quarter
    typical

    Typical lag between funding and customer spending in biotech.

    Wilson Wolf Trailing 12-Month Growth
    low double-digit
    trailing 12 months

    Despite challenging biotech funding environment, Wilson Wolf delivered strong growth.

    Wilson Wolf EBITDA Margins
    north of 70%
    Q3 FY26

    Maintained strong EBITDA margins.

    Biotech Funding Allocation
    75%
    prior year

    In the prior year, 75% of all funding went into late-stage work, clinical development, Phase II. This phrasing is ambiguous when compared to the 82% for Phase II.

    Biotech Funding Allocation
    82%
    prior year

    In the prior year, Phase II clinical development received 82% of the funding. This phrasing suggests Phase II alone received 82% of total funding, which is ambiguous when compared to the 75% for broader late-stage work.

    Wilson Wolf Attachment Rate
    more or less 50%
    Q3 FY26

    Attachment rate with Bio-Techne cytokines and proteins.

    Industry KPIs

    8
    MetricValueDetails
    FCF conversion ROICOperating cash flow: $86.7 million. Net capital expenditures: $9.1 million.USD
    Revenue EPS guidanceQ3 FY26 Adjusted EPS: $0.53; GAAP EPS: $0.32. Q3 FY26 Total Revenue: $311.4 million. Q4 FY26 Organic Growth: approximately flat. FY27 Organic Growth: at least mid-single-digit.
    China revenue exposurelow single digits%
    Diagnostics testing demandBio-Techne Diagnostics: low single digits decline.%
    M a contribution synergiesExosome Diagnostics divestiture: 2% revenue headwind.%
    Segment organic revenue growthProtein Sciences: -4%. Diagnostics and Spatial Biology: 3%.%
    Instruments vs consumables services mixProteomic analysis instruments: mid-single-digit growth. Core reagent and assay portfolio: mid-single digits decline. Spatial Biology portfolio: mid-teens growth. COMET platform: over 65% growth. RNA scope portfolio: high single-digit growth.%
    Organic core revenue growth by end market-2%%

    Product announcements

    1
    ProductTypeDetails
    Ella benchtop immunoassay platformexpansion

    Deals & partnerships

    1
    Wilson WolfBio-Techne currently owns 20% of Wilson Wolf and plans to acquire the remainder.

    Wilson Wolf manufactures the market-leading product line of single-use bioreactors called the G-Rex. It delivered low double-digit growth on a trailing 12-month basis with EBITDA margins north of 70%.

    Risks & headwinds

    5
    Emerging Biotech Spending LagNear-term (Q4 FY26)

    Revenues declined high single digits in Q3 FY26, despite funding rebounds of >90% in calendar Q2 2025 and 50% in calendar Q3 2025.

    Mitigation: Increased engagement and higher opportunity funnel reported by commercial teams; historical lag of 2-3 quarters between funding and spending suggests recovery in H1 FY27.

    Cell Therapy Customer Timing ImpactQ3 FY26, Q4 FY26

    3% headwind to Q3 FY26 revenue; expected 150 basis point headwind to Q4 FY26 growth.

    Mitigation: Headwind moderates in Q4 FY26 and will be fully out of comparisons as of FY27, as customers advance through Phase III trials and accelerate potential commercial timelines.

    OEM Commercial Supply Order TimingQ3 FY26

    1% headwind to Q3 FY26 revenue.

    Mitigation: Order was received in Q2 FY26 instead of Q3 FY26, impacting Q3 comparisons but not a recurring issue.

    Unfavorable Product Mix and Volume DeleveragingQ3 FY26

    Adjusted gross margin down 120 bps year-over-year; adjusted operating margin down 70 bps year-over-year.

    Mitigation: Ongoing profitability initiatives and structural streamlining; expected margin expansion in Q4 FY26 commensurate with scaling of COMET Spatial Biology platform.

    U.S. Academic Market FrailtyNear-term

    Returned to low single-digit growth, but described as 'frail market'.

    Mitigation: Stabilization and gradual improvement expected; increased NIH outlays and budget increases reduce funding uncertainty.

    What to watch in Q4 FY26

    5

    Emerging Biotech Spending Inflection

    H1 FY27
    Currentdeclined high single digits
    Targetmeaningful uptick in growth

    Why it matters

    This is the biggest swing factor for growth acceleration, with a typical 2-3 quarter lag between funding and spending.

    While we can start to see improvement in the biotech end market as early as our June quarter, our base case is that we won't see a meaningful uptick in growth until the first half of our fiscal year 2027.

    Q&A highlights

    6

    Given the step-down in emerging biotech revenue to high single-digit decline, what were the intra-quarter trends, and what is the outlook for improvement?

    Management was surprised by the high single-digit decline in emerging biotech, as funding had rebounded significantly. They noted that while late-stage biotech funding was up, early-stage funding (which impacts core reagents) was down. Sales force interactions are increasing, but they are maintaining a cautious forecast for Q4, assuming no clear improvement yet, but expect a recovery in H1 FY27.

    “But you're right. It did step down to negative high single digits instead. And that really is the whole for our quarter, and it fits very nicely to exactly the gap in our biotech end market.”

    asked by Matthew Larew · answered by Kim Kelderman

    3 min read7 chapters

    Detailed Narrative

    01

    Market Dynamics and Funding Trends

    Bio-Techne observed a divergence in its end markets during Q3 FY26. Large pharmaceutical customers continued their strong performance with low double-digit growth for the sixth consecutive quarter, driven by sustained investment. In contrast, emerging biotech revenues declined high single digits, reflecting a lag in spending despite a significant rebound in biotech funding activity in calendar Q2 and Q3 2025. The U.S. academic market showed signs of stabilization, returning to low single-digit growth, supported by improved NIH outlays and budget increases. China continued its momentum with low single-digit growth for the fourth consecutive quarter, driven by increasing demand in advanced therapeutics.

    02

    Impact of Cell Therapy and OEM Order Timing

    The company's Q3 organic revenue decline of 2% was significantly impacted by specific timing issues. Order timing related📎 to two cell therapy customers with FDA Fast Track designation and a large OEM commercial supply order created a combined 400 basis point headwind. Excluding these factors, the underlying organic revenue growth for the quarter was 2%. Management expects the cell therapy headwind to moderate to approximately 150 basis points in Q4 FY26 and to be fully out of comparisons by FY27, positioning the company for accelerated growth.

    03

    Strategic Brand Alignment

    In April, Bio-Techne announced a strategic brand alignment, streamlining its portfolio from ten brands to three: R&D Systems, Bio-Techne Spatial Biology, and Bio-Techne Diagnostics. This initiative aims to simplify customer engagement across the research to clinical continuum and better align products with customer workflows from discovery through translational research and diagnostic applications. The new structure is also intended to enhance visibility of solutions on digital and AI-driven platforms.

    04

    AI's Influence on Operations and Drug Discovery

    Artificial intelligence is increasingly impacting Bio-Techne's internal operations and customer drug discovery processes. Internally, AI is leveraged to design novel proteins with enhanced properties, trained on five decades of proprietary data. From a customer perspective, AI accelerates early-stage drug discovery, particularly target discovery, which is expected to expand viable programs. This drives demand for high-quality biological data, benefiting Bio-Techne's spatial biology and proteomic analysis platforms, and fuels demand for specific reagents and assays for biological validation.

    05

    Segment Performance Highlights

    The Protein Sciences segment saw a 4% organic revenue decline, but an underlying growth of 2% excluding timing impact📎s. GMP protein revenue grew nearly 50% (excluding specific customers), and proteomic analysis instruments delivered mid-single-digit growth. The core reagent and assay portfolio declined mid-single digits. The Diagnostics and Spatial Biology segment achieved 3% organic growth, with the COMET multiomic Spatial Platform growing over 65% and RNA scope portfolio increasing high single digits. Bio-Techne Diagnostics declined low single digits due to order timing.

    06

    Financial Performance and Capital Allocation

    Adjusted EPS for Q3 FY26 was $0.53, down $0.03 year-over-year, with a $0.02 favorable FX impact🌐. GAAP EPS was $0.32, up from $0.14. Adjusted gross margin was 70.4%, down from 71.6% but up 190 basis points sequentially, impacted by unfavorable product mix. Adjusted operating margin was 34.2%, down 70 basis points year-over-year, reflecting mix and volume deleverage partially offset by productivity initiatives. The company generated $86.7 million in operating cash flow and returned $12.5 million to shareholders via dividends, maintaining a strong balance sheet with $209.8 million in cash and leverage well below 1x EBITDA. M&A remains a top capital allocation priority.

    07

    Outlook and Fiscal 2027 Expectations

    For Q4 FY26, Bio-Techne expects approximately flat organic growth, with underlying low single-digit growth excluding cell therapy headwinds. This outlook assumes Q3 market conditions persist. Management is optimistic for fiscal 2027, anticipating an acceleration in growth as biotech funding translates into customer spending, academic conditions normalize, company-specific timing headwinds roll off, and the company laps easier year-over-year comparisons. They expect to achieve at least mid-single-digit growth in FY27.

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