QuidelOrtho Corporation Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Delivered organic sales growth of 5% excluding COVID sales and U.S. donor screening exit. Adjusted EBITDA expanded to 25% of sales, with over $140M in cost savings and on track for mid- to high 20s EBITDA margins.
• Made targeted investments in key strategic areas. R&D focused on advancing pipeline, including clearance of new VITROS high-sensitivity troponin assay, which elevates cardiac panel performance.
• Operations team aggressively executing cost improvements, optimizing supply chain, managing tariffs, and supporting LEX Diagnostics in FDA submissions, anticipating clearance by late 2025 or early 2026.

Segment Performance

• Labs: Revenue grew 4%. Demand for VITROS immunoassay and clinical chemistry platforms remained solid, with stable customer renewal rates and new business wins. Benefiting from underpenetration in the immunoassay segment and strong brand recognition for low total cost of ownership and customer service.
• Immunohematology: Grew 5%, reflecting consistent strong demand from blood banks and hospitals as they expand automated testing solutions and strengthen positions in key geographies.
• Point-of-Care: Triage product line posted 7% growth, supported by strong value proposition, momentum in cardiac and BMP testing, and growing contribution from international markets. Respiratory revenue declined due to 63% drop in COVID revenue, Flu revenue down 8% year-over-year. North America revenue down 12% total but up 5% year-over-year excluding respiratory revenue and U.S. donor screening exit. Outside the U.S., Latin America grew 21% overall (22% in labs), Japan, Asia Pacific, and China each grew ~5%, Europe, Middle East, and Africa region grew 3% with EBITDA margins up over 700 basis points year-to-date.

Guidance

• Full year 2025 total reported revenue expected to be between $2.68 billion and $2.74 billion with neutral FX impact. Adjusted EBITDA guidance narrowed to $585 million to $605 million (midpoint same as prior guidance). Adjusted diluted EPS expected to be $2 to $2.15, impacted by higher interest expense and slightly higher tax rate. Interest expense for full year expected to be up by ~$17M to $177M. Effective tax rate expected to rise by ~1 percentage point to 25% due to tariff mitigation shifting income across geographies.

Risks

• Impact of tariffs and macroeconomic conditions. Potential impact of LEX Diagnostics acquisition integration. Goodwill impairment charge of $701M in Q3. Temporary cash flow impacts from ERP system conversion. System conversion timing affecting accounts receivable and payable, though manageable due to debt refinancing.

Q: Jack Meehan asked about Sofia franchise and LEX launch.

A: Sofia installed base stable; LEX expected FDA clearance late 2025/early 2026, limited rollout first part of 2026, fulsome rollout second half with potential dilutive impact on margins next year.

Q: Patrick Donnelly's representative asked about U.S. donor screening and lab business.

A: U.S. donor screening revenue wind down, residual revenue to complete in first half 2026. Lab business has ~30-40% integrated analyzer installed base, opportunity for additional placements.

Q: Andrew Cooper asked about high-sensitivity troponin on Triage and cost savings.

A: TriageTrue high-sensitivity troponin has technical challenges for U.S. market; cost savings initially focused on staffing, now on indirect and direct procurement, with heavy lifting ongoing.