Bio-Techne Corporation Q1 FY2026 earnings call

Business Performance: Organic revenue declined 1% in Q1 due to cell therapy clinical stage timing and biotech funding softness. Adjusted operating margin expanded 90 basis points to 29.9%. Large pharma customers' revenue remained strong, while biotech end market had high single-digit declines but early signs of stabilization. Growth Pillars: Protein Sciences: 3% organic revenue decline, but Maurice biologics platform had sixth consecutive quarter of growth. ProteinSimple: Installed base utilization strong, cartridge consumable pull-through resumed double-digit growth. Upcoming launch of ultrasensitive cartridge for Ella platform. Spatial Biology: Low single-digit growth in RNAscope product suite, launch of ProximityScope, COMET instrument bookings had solid double-digit growth. Diagnostics: Mid-single digit growth, rising interest in ESR1 test, launch of AmplideX PML-RARA kit, expanded agreement with Oxford Nanopore Technologies. Sustainability: Achieved 40% reduction in Scope 1 and 2 emissions in fiscal 2025.

Protein Sciences: Q1 reported sales were $202.2 million, down 1% year-over-year. Organic revenue declined 3% with a 2% benefit from foreign exchange. Excluding cell therapy timing impact, organic growth was +1%. Operating margin was 38.4%, down 100 basis points year-over-year. Diagnostics and Spatial Biology: Q1 sales were $79.5 million, down 4% year-over-year. Divestiture of Exosome Diagnostics negatively impacted reported growth by 7%, resulting in 3% organic growth. Diagnostics Products grew mid-single digits, while spatial biology was flat. Segment operating margin improved to 11.2%, up from 5.1% last year.

Q2 organic growth expected to be consistent with Q1, despite cell therapy headwind intensifying by ~400 basis points. Overall fiscal year organic growth still targeted at low single digits. Aim to achieve at least 100 basis points of margin expansion for the full fiscal year.

Volatility in biotech funding and cell therapy clinical stage timing leading to revenue lumps. Government shutdown impacting visibility into NIH budget for fiscal 2026.

Q: How long might the GMP protein air pocket persist?

A: Q2 will be worse with 400 bps headwind, fading in second half of fiscal year.

Q: Thoughts on academic sentiment and impact on business?

A: Stabilization in NIH markets, bipartisan support for flat NIH budget, positive mix of grants aligned with company's research areas.

Q: Update on Wilson Wolf?

A: Flat quarter, mid-teens trailing 12 months, well-positioned to accelerate again.

Q: Fiscal second quarter margin outlook?

A: Confident in achieving 100 basis point margin expansion goal, top line plays a role in quarter-to-quarter margin.

Q: Impact of government shutdown on academic customers?

A: No noticeable major differences in academic customer buying patterns thus far.