Q1 2025 Bio-Techne Corp Earnings Call Transcript
Key Points
- Bio-Techne Corp (TECH) reported a 4% year-over-year organic revenue growth, driven by strong performance in molecular diagnostics and proteomic analysis.
- The company experienced significant growth in its GMP reagent product lines, with over 60% increase, indicating strong demand in the cell and gene therapy sectors.
- Bio-Techne's diagnostics and spatial biology segment saw a 14% increase in both reported and organic growth, highlighting robust demand in these areas.
- The company is making significant progress in its ESG initiatives, including commitments to reduce greenhouse gas emissions, positioning it for a sustainable future.
- Bio-Techne's strategic investments and cost containment initiatives have maintained its peer-leading operating margin profile, allowing for continued expansion and growth.
- Bio-Techne faced challenges in China, with a low double-digit decline in the first quarter due to a challenging funding environment.
- The company's adjusted operating margin decreased by 240 basis points from the prior year, impacted by unfavorable product mix and reinstatement of incentive compensation accruals.
- The Protein Sciences segment reported flat revenue compared to the prior year, with organic revenue increasing only 1%, indicating slower growth in this area.
- Bio-Techne's total company adjusted gross margin decreased to 69.5% from 71.3% in the prior year, driven by unfavorable product mix.
- The company anticipates continued margin headwinds in the first half of FY 2025 due to incentive compensation accrual reinstatement and negative product mix.
From my end markets, combined with excellent execution by the biotech team led to 4% year-over-year organic revenue growth. Our growth pillars, including our molecular diagnostics for spatial biology platforms as well as our proteomic analysis franchise continue to outperform in constrained end markets.
It's also encouraging to see early indications of improvement in our biotech end markets, which is validated by the strength we experienced nerve cell and gene therapy business during this last quarter, I'll give additional details about the momentum in our growth pillars later in the call.
But first, I want to applaud the Bio-Techne team for delivering this top line performance for the continued focus on profitability. Jim will discuss this in more detail, but the cost containment and productivity initiatives we have put in place in recent quarters, position the company to being maintained its peer leading operating margin profile.
These efficiencies will also allow for continued strategic investments
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