QuidelOrtho (QDEL) Fiscal Q2 EPS Beats

Key Points

• GAAP revenue for Q2 FY2025 narrowly surpassed analyst estimates but declined 3.6% from the prior year, reflecting ongoing contraction.

• Adjusted EPS rebounded to $0.12, beating expectations and last year's result on an adjusted (non-GAAP) basis due to significant cost savings.

• A $179 million GAAP restructuring charge, largely tied to the discontinued Savanna platform, drove a deeper net loss.

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QuidelOrtho (NASDAQ:QDEL), a global provider of diagnostic testing solutions, released its financial results for the quarter ended June 29, 2025, on August 5, 2025. The most notable headline was a return to positive adjusted earnings per share (non-GAAP) and improved adjusted profit margins (non-GAAP), even amid continued year-over-year revenue decline. Reported GAAP revenue of $614 million beat analyst consensus of $611.1 million, and Adjusted non-GAAP earnings per share came in at $0.12, far exceeding the $0.00 consensus estimate. However, The quarter was also marked by a much larger GAAP net loss, mainly from $179 million in non-cash charges, mostly tied to discontinuing the Savanna molecular testing system. Overall, the period reflected tight expense control and some growth in core diagnostics segments, weighed down by sharply lower sales in COVID-19 and Donor Screening products, as well as heavy restructuring costs.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Priorities

QuidelOrtho is a diagnostics company with a presence in over 130 countries, providing a range of products used in laboratories, hospitals, and at the point of care. It operates several platforms such as Vitros (laboratory chemistry analyzers), Sofia and Triage (point-of-care devices), and immunohematology systems for blood typing and transfusion support. QuidelOrtho’s customers include hospitals, clinical labs, blood banks, and clinics that rely on its instruments and testing supplies for patient care, disease surveillance, and screening.

In recent years, QuidelOrtho has focused on boosting recurring revenue streams and expanding its product pipeline. Its key priorities include sustaining innovation—by developing new assays and diagnostic tools—increasing global reach, and improving operational efficiency to drive profitability. Maintaining compliance with regulatory standards and closely managing relationships with healthcare providers also play central roles in its business approach. The company viewed near-term success as dependent on controlling expenses, growing non-respiratory testing revenue, and navigating the shift away from pandemic-related products.

Quarter in Detail: Revenue, Expenses, and One-Time Charges

Total GAAP revenue fell 3.6% compared to the prior year—driven by sharp declines in COVID-19 testing and Donor Screening solutions. Respiratory product revenue, largely made up of COVID-19 diagnostics, dropped 20%, while Donor Screening solutions plummeted by 61.2%. The Point-of-Care segment, which includes the Sofia diagnostic platform for rapid disease detection at patient bedsides, saw revenue decrease by 20.6%. These drops reflected reduced demand as pandemic testing volumes continued to recede.

Outside of pandemic and donor products, core segments showed modest strength. Laboratory solutions, which cover large-scale testing for hospitals and clinics, grew by 4% as reported, and Immunohematology systems, used for blood compatibility and transfusion support, increased by 4% as reported. Molecular diagnostics, while still a small part of overall business, jumped 27%—an increase off a low revenue base as QuidelOrtho seeks to expand in this area. On the other hand, North America’s revenue fell 11%, offset by growth in Europe, the Middle East, and Africa, which rose 9%, and the 'Other' region (including Japan, Asia-Pacific, and Latin America), which grew 12%.

Cost control was a clear highlight of the quarter. The company delivered $100 million in annualized cost savings from its recent expense-reduction initiatives, with much of the improvements coming from streamlined staffing, procurement, and other operating costs. These savings contributed to an improved adjusted EBITDA, which rose to $107 million and resulted in an adjusted EBITDA margin gain of 3.3 percentage points year over year.

A major feature of the earnings report was the $179 million in restructuring and one-time charges, including a $150 million charge tied to the discontinuation of the Savanna platform, which was originally intended to strengthen QuidelOrtho’s presence in the molecular diagnostics segment. The discontinuation resulted in a deep GAAP net loss, with diluted losses per share widening to $(3.77). These charges point to expensive adjustments in the company’s R&D (research and development) focus and product innovation strategy, as it pivots towards alternative molecular testing technologies—such as with its planned acquisition of LEX Diagnostics.

Financial Outlook and What Comes Next

Looking ahead, management reiterated full-year guidance targets. QuidelOrtho continues to expect reported revenue in the range of $2.60 billion to $2.81 billion for FY2025, Adjusted EBITDA between $575 million and $615 million (implying a 22% margin) for FY2025, and Adjusted diluted EPS of $2.07 to $2.57 for FY2025. Management described the second quarter as seasonally the lowest, with expectations for stronger revenue and margin performance in the fourth quarter. Tariff-related cost impacts—estimated at $30 million to $40 million for FY2025—are projected to be offset by additional cost savings and pricing adjustments, leaving the company’s outlook unchanged.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends QuidelOrtho. The Motley Fool has a disclosure policy.