QuidelOrtho Corporation Q4 FY2025 earnings call

• Brian Blaser reflected on joining QuidelOrtho in May 2024, outlined 3 priorities (customer focus, operational/financial performance, product development), and highlighted 2025 achievements including $140 million in cost savings, adjusted EBITDA margins in the low 20s, and Labs business growth. He also announced Joe Busky's retirement as CFO.
• Jonathan Siegrist discussed R&D progress, including FDA clearances of high-sensitivity troponin eye assay and ID MTS Direct Antiglobulin Test Card, launch of QuidelOrtho Results Manager, and upcoming products like VITROS 450, new immunoassay platforms for OUS markets, and LEX molecular diagnostics platform.

The Labs business reported strong growth of 7% in Q4 and 6% for the full year, representing 55% of total company revenue. Immunohematology delivered steady growth of 3% for the full year. The Triage business had revenue up 16% in Q4 and 7% for the full year. Respiratory revenue declined 14% in Q4 and 20% for the full year due to lower COVID testing, but flu revenue grew 6% in Q4 and 3% for the full year on a constant currency basis.

• Full year 2026 reported revenues expected between $2.7 billion and $2.9 billion.
• Labs business to grow mid-single digits, immunohematology low single digits, U.S. Donor Screening wind down by mid-2026.
• Adjusted EBITDA anticipated between $630 million and $670 million (approximately 23.3% margin).
• Adjusted diluted EPS between $2 and $2.42.
• Free cash flow expected between $120 million and $160 million, factoring in $50 million to $60 million in one-time cash use.

• Uncertainty in the respiratory business impacting revenue guidance.
• Potential impact of China's value-based procurement (VBP) program on revenue, with an estimated 0.5% to 1% impact if QuidelOrtho products are included.
• ERP system issues and cash collection timing affecting free cash flow conversion in prior quarters.

Q: Tycho Peterson on free cash flow guidance A: Joe Busky explained Q4 cash flow was lighter due to system-related AR and late revenue slipping into January, but expects improved cash flow in 2026 with midpoint free cash flow at $140 million Q: Jack Meehan on China and VBP A: Brian Blaser stated no new details on China's VBP program for dry chemistry test strips, with potential impact estimated at 0.5%-1% of revenue Q: Andrew Brackmann on EPS guidance A: Joseph Busky said the wide EPS range is due to respiratory business uncertainty, with midpoint being the focus Q: Patrick Donnelly on margin progression A: Joseph Busky discussed Q4 gross margin softness due to tariffs, instrument revenue, and product mix, expecting GP margin to be relatively flat in 2026 with direct procurement initiatives to impact margins later Q: Lu Li on R&D pipeline and U.S. systems A: Brian Blaser and Jonathan Siegrist discussed OUS market focus for new products, with U.S. systems development taking longer, and R&D focusing on content and menu addition for current systems Q: Andrew Cooper on free cash flow conversion A: Joseph Busky said 50% free cash flow conversion is the goal, targeted for mid-2027 with progress in 2026 Q: Casey Woodring on margin progression and free cash flow A: Joseph Busky talked about direct procurement savings in 2026 guide but offsets in GP, and free cash flow expected to be generated more in the second half of 2026 Q: William Bonello on cash flow outlook A: Joseph Busky expected onetime cash use to decrease to $40 million-$50 million in 2027, with free cash flow expanding as EBITDA margin rises and onetime cash decreases