OraSure Technologies, Inc. Q2 FY2025 earnings call

• Reported revenue in Q2 was in the top half of guidance for total and core revenue.
• Launched HEMAcollect PROTEIN in July to meet proteomic researchers' needs and expand Sample Management Solutions to blood samples.
• Anne Messing joined as Chief Commercial Officer to drive sales, marketing, and product management.
• Substantially completed transition of SMS product manufacturing from external contract to internal capabilities in Pennsylvania.
• Diagnostics grew 3% YOY, while Sample Management revenue decreased 22% YOY due to a large consumer genetics customer; excluding that customer, Sample Management revenue growth was positive.
• International Diagnostics faced disruption from USAID funding freezes, slowing HIV test deployment; expecting slower international HIV orders in Q3.
• Sample Management business had stability in Q3/Q4, with no significant revenue from large consumer genetics customer in second half, but orders likely to resume in 2026.
• Renewed agreement with GeneDx and collaborated with Targeted Genomics on GlutenID test.
• Launched HEMAcollect PROTEIN, advanced Colli-Pee device toward 2025 FDA submission, and progress on Sherlock CT/NG test clinical study.

Total revenue in Q2 was $31.2 million. Core revenue was $30.8 million, which was above the midpoint of the guidance range. Diagnostics generated $19.2 million in Q2, growing 3% year-over-year. Sample Management Solutions revenue was $9.9 million, down 22% year-over-year due to a large customer in the Consumer Genetics segment; excluding that customer, Sample Management revenue growth would have been positive. COVID-19 and risk assessment testing products contributed $474,000 in Q2, consistent with guidance. Core revenue growth excluding the large consumer genetics customer was 5% year-over-year.

• Guided Q3 revenue $27M-$30M, including less than $100k COVID testing.
• Q3 influenced by international diagnostic order trends and Together Take Me Home program timing.
• Gross margin in Q3 expected consistent with Q2.
• Manufacturing transition benefits to ramp up in second half 2025 and 2026.
• Q3 core operating expenses ~$20M plus $10M innovation investments, including $7M-$8M for Sherlock.

• Uncertainty in public health program funding affecting revenue.
• Disruption in international HIV test deployment due to USAID funding freezes.
• Impact of NIH funding cuts on Academic and Research segment of Sample Management business.
• Dependence on large consumer genetics customer for Sample Management revenue, with no significant revenue expected in second half of 2025.

Q: Could you go into specifics between HIV and HCV platforms and margin leverage from in-house manufacturing?

A: HCV expected stable Q/Q. For HIV, slower pace of orders in Q3 due to USAID funding disruption. Manufacturing transition benefits to start in second half and ramp up in 2026, volume dependent.

Q: How about the gross margin and Diagnostics performance? Any impact from tariffs?

A: Gross margin in Q2 was influenced by manufacturing improvements, lower scrap. Diagnostics performance had timing effects from Together Take Me Home and international order patterns. No significant pull forward from tariffs mentioned.