Qiagen (QGEN) Q3 2025 Earnings Call Transcript

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DATE

Wednesday, November 5, 2025 at 9:30 a.m. ET

CALL PARTICIPANTS

Chief Executive Officer — Thierry Bernard

Chief Financial Officer — Roland Sackers

Vice President, Corporate Communication — John Gilardi

Vice President and Head of Investor Relations — Daniel Wendorff

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RISKS

Management cited ongoing U.S. tariffs as a headwind, with Roland Sackers stating, "the 90 bps this year is, of course, the net impact," and indicated mitigation actions are in place but the trajectory remains subject to change.

Sales in the Asia Pacific region declined 2% CER, reflecting a mid-teens CER decline in China during the period, offset by higher sales in India, South Korea, and Australia.

U.S. government shutdown impacted sales, particularly in the academic and government segments. Management confirmed this remains factored into guidance for the rest of the year.

The Parse Biosciences acquisition is expected to dilute adjusted EPS by $0.04 in 2026, and an EBIT margin dilution in 2026, though management anticipates mid-term accretion.

TAKEAWAYS

Total Net Sales -- $533 million, with net sales rising 6% in Q3 2025 over the prior year period, with 5% growth at constant exchange rates, exceeding the 4% CER target.

Core Sales -- Core sales excluding discontinued products increased by 6% CER in Q3 2025 over the prior year period

Adjusted Diluted EPS -- $0.61 at both actual and CER, above the prior outlook for at least $0.58.

Adjusted Operating Income Margin -- 29.6% adjusted operating income margin for 2025, and 30% adjusted operating income margin at constant exchange rates (CER) for 2025, absorbing over 150 basis points of currency and U.S. tariff headwinds in the adjusted operating income margin for 2025.

Operating Cash Flow -- $466 million for the first nine months of 2025, including approximately $45 million in restructuring payments during the nine months of 2025.

Free Cash Flow -- $336 million for the nine months ended September 2025, slightly below prior year due to increased capitalized IT investments.

Sample Technologies -- Returned to growth, with sales rising 3% CER, led by double-digit automated kit expansion; instrument sales were slightly lower.

Diagnostics Solutions Sales -- Up 4% CER or Sales rose 8% CER excluding discontinued NeuMoDx in Q3 2025 over the prior year period, driven by QIAstat and QuantiFERON, both up 11% CER.

Genomics/NGS Sales -- Grew 9% CER in genomics and NGS product groups, propelled by ongoing business growth.

Digital PCR Platform (QIAQUITY) -- Maintained double-digit CER growth in consumables, offsetting lower instrument sales.

Bioinformatics (QIAGEN Digital Insight) -- Achieved double-digit growth, aided by GenoX integration and heightened clinical NGS solution demand.

Americas Regional Sales -- Sales in the Americas rose 7% CER in Q3 2025 over the prior year period, with U.S. growth offsetting lower results in Brazil and Mexico.

EMEA Sales -- Advanced 4% CER, with strength in Germany, France, Italy, and Nordic countries.

Inventories -- Days of inventory declined to 151 at the end of Q3 2025 from 193 in 2024, reflecting execution of efficiency initiatives.

Shareholder Return Programs -- Announced a $500 million synthetic share repurchase to be completed in January 2026, following a $300 million synthetic share repurchase completed in January 2025 and a $54 million dividend paid in July 2025.

Parse Biosciences Acquisition -- Transaction expands into AI-driven, instrument-free single-cell analysis, already present in more than 3,000 labs globally, and projected to be EBIT dilutive in 2026 but accretive by 2028.

QIAstat Diagnostic Rise -- Obtained U.S. FDA clearance; automates up to 18 tests simultaneously and processes up to 160 samples per day.

Fourth Quarter Outlook -- Net sales expected to be steady at constant exchange rates in Q4 2025 compared to 2024; core sales targeted to rise about 2% CER in Q4 2025; adjusted EPS guidance is ~€0.60 CER for Q4 2025.

Full-Year 2025 Guidance -- Net sales growth of 4%-5% CER for full year 2025, Core portfolio growth of 5%-6% for full-year 2025, and adjusted EPS guidance raised to about $2.38 CER for full-year 2025, up $0.10 from prior guidance.

Leadership Transition -- Thierry Bernard announced plans to step down as CEO, with succession process underway to ensure continuity.

SUMMARY

The call highlighted an increase in full-year adjusted EPS guidance to about $2.38 CER for 2025, driven by operational efficiency and resilience despite macro and currency pressures. Management emphasized the importance of high-growth portfolio areas, notably through the Parse acquisition, which is expected to bolster single-cell and AI-powered analytics capabilities. Geographic diversification was evident, with robust performance in the U.S. and EMEA, but continued sales declines in China during Q3 2025. New product launches—including high-throughput automation and clinical diagnostic systems—are on schedule, aiming to sustain momentum and accelerate growth in 2026 and beyond.

Management reported operational improvements in inventory and receivables management, with accounts receivable days reduced from 56 in 2024 to 53 at the end of Q3 2025, and inventory days reduced from 193 in 2024 to 151 at the end of Q3 2025.

The core pillars—including QIAstat, QuantiFERON, and digital PCR—remain central to the 2028 sales and margin ambitions, with annual targets reaffirmed during the call.

Product pipeline expansions—such as forthcoming instrument launches (QIA Mini, QIA Spring Connect) and diagnostics menu enhancements—remain on track for launch in 2026.

Roland Sackers noted, "we expect QIAGEN's leverage ratio to move towards the industry average of about 2x net debt to adjusted EBITDA during 2026," reflecting disciplined capital deployment.

Management signaled that the 2026 EBIT margin profile may be pressured by the Parse acquisition and tariff-related headwinds, but underlying profitability improvements are still anticipated.

INDUSTRY GLOSSARY

Constant Exchange Rates (CER): Financial results presented as if currency rates had remained unchanged from the comparison period, isolating underlying business performance.

QIAstat Diagnostic Rise: Higher throughput version of QIAGEN's syndromic testing instrument, automating multiple simultaneous tests for large-volume clinical diagnostics.

Parse Biosciences: Provider of instrument-free, scalable single-cell analysis kits, newly acquired by QIAGEN.

Kayakuity/QIAQUITY: QIAGEN's digital PCR (polymerase chain reaction) platform for high-precision nucleic acid quantification and applications in clinical and biopharma settings.

Companion Diagnostic: Diagnostic test used to determine the suitability of specific therapies for individual patients, frequently supporting targeted pharmaceutical development and approvals.

Synthetic Share Repurchase: Capital return mechanism in which a company repurchases shares indirectly by leveraging a derivative or similar structure instead of directly buying shares on the public market.

Full Conference Call Transcript

John Gilardi: Thank you, operator, and welcome to all of you to who are joining us for this call for the third quarter 2025. We appreciate your time and your interest in QIAGEN. So joining the call today are Thierry Bernard, Chief Executive Officer, and Roland Sackers, our Chief Financial Officer. Also joining us today is Daniel Vendorf, our new Head of IR, and Dr. Domenica Martiromo from our investor relations team. Before we begin, I'd like to share that our next deep dive on sample technologies is planned for Friday, November 21. The invitation was just sent out to you, so please register for the event.

Dominica has done an outstanding job leading the creation of this series, and we look forward to another engaging session. As always, today's call is being webcast live and will be archived in the IR section of our website www.qiagen.com. Here, you can find the press release and presentation accompanying this call. Please also note that this call will include forward-looking statements. Actual results may differ materially from those projected due to a number of factors outlined in our most recent Form 20-F and other filings with the US Securities and Exchange Commission. We will also refer to certain financial measures not prepared in accordance with US generally accepted accounting principles or GAAP that provide additional insights into our performance.

Reconciliations to the most directly comparable GAAP figures are in the release and presentation, and all references to earnings per share refer to diluted EPS. With that, let me hand the call over to Thierry.

Thierry Bernard: Thank you, John, and hello, everyone. Good morning, good afternoon, or good evening to all of you joining us from around the world. I'd like to start by thanking the QIAGEN teams across our company and across the world for their ongoing dedication and strong execution in this challenging macro environment. Their focus and collaboration enabled us to deliver another solid quarter. In fact, the twenty-fourth consecutive quarter in which we met or exceeded our target. We continue to see the clear merits of our strategy to prioritize high-growth areas of molecular research and testing while maximizing the reach of our portfolio to customers across both the life sciences and diagnostics.

This approach continues to provide balance and stability even in these very volatile and uncertain conditions. This performance in 2025 also enables us to advance key capital allocation initiatives that are strengthening our business and creating value. Two important developments were announced yesterday. First, the acquisition of Parse Biosciences that expands our sample technologies portfolio into the very fast-growing AI-driven single-cell market. Second, a €500 million synthetic share repurchase to be completed in January 2026 that will bring total shareholders' returns since 2024 to above our 2028 goal for at least €1 billion return to shareholders. We remain strongly committed to our 2028 ambitions even again in this challenging environment.

We have significantly strengthened key pillars in our portfolio and continue to position QIAGEN towards our 7% sales CAGR target from 2024 to 2028. We are also on track to move well above our 31% adjusted operating income target by 2028 despite currency and integration headwinds. So we are combining top execution with decisive action to deliver solid profitable growth. So let me walk you through our key messages for today. First, we once again exceeded our targets for the third quarter and delivered one of the fastest growth rates in our industry. Net sales rose 6% to $533 million, while results at constant exchange rates were up 5% and ahead of our 4% CER target.

More importantly, core sales excluding recently discontinued products increased 6% CER over the prior year period. Adjusted diluted EPS was $0.61 at both actual and constant exchange rates and therefore above our outlook for at least $0.58. Those results again underscore the strength of our differentiated portfolio and the success of our efficiency initiatives in delivering a consistent performance quarter after quarter over the past six years. Second key message: our growth pillars continue to perform strongly in 2025. QIAstat Diagnostic grew 11%, driven by strong instrument placements and double-digit consumable growth on demand across our clinical syndromic testing panels. QuantiFERON also grew 11% CER, supported by continued latent TB conversion from the skin test and broader adoption worldwide.

Sample technologies returned to growth with sales rising 3% CER on demand for automated consumables despite cautious capital spending. Kayakuity, our digital PCR platform, maintained double-digit CER growth with robust consumable demand more than offsetting slower instrument sales among life science customers. And QIAGEN Digital Insight, our bioinformatics portfolio, delivered solid double-digit growth driven by growing demand for clinical bioinformatics and also the integration of GenoX, which has further enhanced our growing range of AI-driven solutions for the interpretation of clinical next-generation sequencing data. Third key message: our strong performance so far in 2025 is allowing us to again raise our earnings target while confirming our sales outlook. This reflects the success of our efficiency initiatives and disciplined execution.

Despite currency headwinds and the adverse impact of tariffs and the current US government shutdown, we continue to improve profitability and maintain solid growth. This is fully aligned with our 2028 ambitions for solid profitable growth. Therefore, we now expect adjusted EPS of about $2.38 CER, an increase of $0.10 from our initial guidance for 2025. At the same time, we continue to expect net sales growth of about 4% to 5% at constant exchange rates, and more importantly, 5% to 6% CER growth for our core portfolio. This is definitely another solid and strong quarter demonstrating consistent execution, operational discipline, and clear strategic direction. And lastly, let me briefly address the announcement about our leadership transition.

After more than ten years with this remarkable company, including six years as CEO, I and our Supervisory Board have agreed that this is the time to prepare for QIAGEN's next phase of growth. This decision comes after deep reflection and with full confidence in the strength of our company, the strength of our strategy, and above all, the quality of our people. I will obviously continue to lead QIAGEN until a successor is appointed to ensure a smooth and orderly handover. Our focus, my focus, remains unchanged: executing on our strategy, delivering on our 2025 goals, and advancing on our 2028 ambitions for solid and profitable growth.

It is a real privilege to serve QIAGEN and to work alongside such talented and dedicated colleagues, and I'm really confident that our company is well-positioned for its next phase of growth. With that, I'll hand it over to Roland for more on the financials.

Roland Sackers: Thank you, Thierry. And hello, everyone. Let me start with a few key financial highlights. First, QIAGEN remains one of the fastest-growing companies in our industry as core sales rose 6% at constant exchange rates. Techne profitability remained strong. Our adjusted operating income margin for 2025 was steady at 29.6% of sales, 30% at constant exchange rates, absorbing more than 150 basis points of headwinds from currency movements and the impact of US tariffs. Net earnings per share at CER were $0.61 and well ahead of the outlook for at least €0.58. Third, cash generation was also strong with underlying operating cash flow of $466 million for the nine months of 2025, including about $45 million cash restructuring payments.

And fourth, our balance sheet remains strong, giving us the flexibility to invest in innovation, pursue targeted bolt-on acquisitions like Parse, and to increase returns to shareholders as we are doing with our $500 million synthetic repurchase set for completion in January 2026. We have a long-standing capital allocation strategy that has created value by directing resources to the highest return opportunities. Based on this new repurchase program, we are well ahead of our target to return at least €1 billion to our shareholders by 2028.

We also anticipate that our leverage rate or net debt to adjusted EBITDA ratio will move towards the industry average of approximately 2x during 2026 as we consider additional capital allocation in the New Year. Now let me take you through the details. In terms of sales results, among the four product groups, Sample Technologies rose 3% CER, driven by consumers' growth, especially automated kits that showed double-digit expansion compared to the year-ago period. Instrument sales were slightly lower but included good placement of the QIAsymphony, QIAcube Connect, and EZ2 Connect systems. In Diagnostic Solutions, sales rose 4% at CER, but at a faster 8% excluding the discontinued NeuMoDx system.

The top performers were QIAstat and QuantiFERON, both growing 11% CER and supported by further expansion of our companion diagnostic pharma partnerships. In PCR and nucleic acid amplification, sales were stable compared to 2024 at constant exchange rates. Our digital PCR platform, QIAQUITY, continued to grow as strong demand for consumables more than offset lower instrument sales. In the genomics and NGS product groups, sales rose 9% CER, led by a combination of solid growth from the current business quarter. Sales in The Americas rose 7% CER, supported by strong growth in The US against lower sales in Brazil and Mexico. In the EMEA region, sales grew 4% CER, led by Germany, France, and Italy, along with the Nordic region.

The Asia Pacific region declined 2% CER, reflecting a mid-teens CER decline in China over the same period in 2024, against higher sales in India, South Korea, and Australia. Moving down the income statement, adjusted operating income grew in line with sales and reached $158 million as adjusted operating income margin remained at 29.6% of sales compared to 2024. The vast majority of our R&D spending continues to focus on our pillars. This includes the upcoming launches of three new sample prep instruments, new panels for QIAstat Dx, the expansion of QIAcuT applications in research and the clinic, and also the development of the fifth generation for QuantiFERON.

Sales and marketing expenses showed the benefit of efficiency gains, declining about one percentage point to 21.2% of sales from 22.2% in the third quarter of 2024, while our teams maintained an ongoing high level of customer engagement. General and administrative expenses declined slightly to 5.7% in the third quarter of 2025 compared to 5.9%, showing continued cost discipline while investing in IT upgrades such as the SAP system migration. Adjusted diluted EPS was €0.61 constant exchange rates, exceeding the outlook for at least €0.58 CER. The adjusted tax rate was 18%, and this was consistent with our target.

Moving to the cash flow, we saw an ongoing high level of cash generation for the first nine months of the year over the same period in 2024. Operating cash flow was $466 million for the 2025 period compared to $482 million in the same period of 2024. But the 2025 results included about $45 million of cash restructuring payments related to the efficiency and portfolio initiatives. Free cash flow was USD $336 million, which was slightly below the same period of 2024 due to the higher levels of planned capitalized IT investments. Accounts receivables declined to about fifty-three days compared to about fifty-six days in 2024 as our teams continue to improve in this area.

At the same time, days of inventories were one hundred and fifty-one days at the end of the third quarter of 2025 compared to one hundred and ninety-three days in 2024 and again reflected benefits from our efficiency initiatives. Improving level of profitability and strong cash flows is further strengthening our healthy balance sheet. This gives us the opportunity to make disciplined decisions to invest in innovation, pursue targeted bolt-on acquisitions, and increase returns to shareholders. As you saw with the developments, this is complemented by our decisions to increase returns to shareholders with a new repurchase set for completion on or about January 7, 2026.

This $500 million return program comes after we completed a $300 million synthetic share repurchase in January and also paid our first annual dividend of $54 million in July. So based on these capital allocation decisions announced and also our considerations for further deployment in 2026 to attractive return opportunities, we expect QIAGEN's leverage ratio to move towards the industry average of about 2x net debt to adjusted EBITDA. In closing, our strong financial position supports our commitment to solid profitable growth. We are deploying resources in areas offering the highest returns, all designated to improve our position to deliver on our 2028 ambitions and create long-term value. With that, let me hand the call back to Thierry.

Thierry Bernard: Thank you, Roland. And as usual, let's have a look at the progress across our product portfolio, particularly focusing on our pillars of growth. You probably remember that we are targeting around $1,490 million in combined sales from our five pillars for 2025, representing a growth of around 8% CER. So based on the results to date in 2025, we remain well on track to achieve the goal for this group. Let's start with Sample Technologies. We continue to advance our next wave of automation and have taken an important step with the acquisition of Parse to extend this leadership by moving into new technologies. Regarding the upcoming instrument launches, those are perfectly on track.

Kaya Symphony Connect has now been installed at the first customers, and the initial feedback has been very positive about the performance and enhanced connectivity. QIA Mini and QIA Spring Connect also both remain on schedule for launch in 2026, and early field tests for QIA Spring Connect are confirming very strong demand for an advanced high-throughput solution. It is indeed extremely interesting to note that we have already received purchase orders for QIA Spring Connect. We have also recently marked the four thousandth placement of Kayak Cube Connect, reaffirming our leadership in automated sample processes. Beyond automation, we are expanding the reach of our sample technologies portfolio with the acquisition of PARS, a pioneering scalable instrument-free single-cell analysis.

PARS has developed a breakthrough instrument-free combinatorial barcoding technology that removes the need for droplet-based systems and enables analysis of millions or even billions of cells instead of thousands. This enables delivering more insight at a fraction of the cost. PaaS solutions are already used by more than 3,000 laboratories worldwide, including every top pharmaceutical company and leading research institution. So this acquisition is really opening up new dimensions for QIAGEN in this fast-growing single-cell market and fits perfectly with our sample-to-insight strategy. PaaS also creates synergies with our QDI bioinformatics business, connecting large-scale single-cell data generation with powerful AI-driven interpretation.

Together, we can accelerate discovery, build virtual cell models, and help researchers unlock new frontiers in AI-based drug discovery and next-generation biology. So tune in for our sample technologies deep dive session on November 21, and you will learn more about the exciting area of our portfolio. Turning now to QIAstat, we continue to expand our syndromic testing portfolio worldwide with the launch of a new instrument version in The U.S., and we are preparing for more panel submissions in 2025. In September, we received the U.S. FDA clearance for QIAstat diagnostic rise, the higher throughput version of our syndromic testing platform.

QIAstat diagnostic rise automates up to 18 tests simultaneously, processing as many as 160 samples per day with very minimal hands-on time. So this high-volume version is particularly attractive to our largest customers. Also, in this third quarter, we were well above 150 QIAstat placements, which is once again a testament to the continued growth and stronger customer adoption of the QIAstat system. When it comes to menu expansion, we remain perfectly on track to submit the blood culture panel in The U.S. and in Europe by 2025. On Kayakuity, our digital PCR platform, we continue to expand the ASCE menu, and we are on track to sell at least 1,000 new assets in 2025.

So now back to Roland with the details on our outlook for the year.

Roland Sackers: Thank you, Thierry. Let me now turn to the outlook for the rest of 2025. We continue to expect another year of solid profitable growth as our teams drive operational efficiency and disciplined execution across the portfolio. For the full year, we are reaffirming our outlook for total net sales growth of about 4% to 5% at 5% to 6% CER since this excludes sales from discontinued products. You saw that impact on our results for Q3 2025 with core sales rising one percentage point faster than total sales.

Additionally, we raised our target for adjusted earnings per share to about $2.38 CER, reflecting our ability to improve profitability faster than sales while absorbing the headwinds of currency movements and U.S. tariffs. This marks an increase of €0.10 in our adjusted EPS target from the start of 2025. For full-year 2025, we continue to anticipate tariffs to create a relative headwind of about 90 basis points on the adjusted gross margin as we work on implementing various mitigation actions. Now on to the fourth quarter, where we have decided to take a view that the impact of the U.S. government shutdown continues until the end of the year.

In light of that factor, also the current macro trends, we are targeting for total net sales to be steady at constant exchange rates compared to 2024 and for our core sales to rise about 2% CER. Adjusted EPS is expected to be about €0.60 at constant exchange rates. As we look at the currency impact market trends, for the full year, we continue to expect a positive impact of about one percentage point on net sales but an adverse impact of about €0.02 on adjusted EPS. For the first quarter, currency movements are expected to have a positive impact on net sales of about one percentage point but an adverse impact of about $0.01 on adjusted diluted EPS.

On a separate note, I'm pleased to introduce Daniel Wendorff, who joined QIAGEN as of November 1, as our new Vice President and Head of Investor Relations, reporting directly to me. Some of you may know Daniel from his prior role at the Investor Relations team at Merck in Germany, and earlier as a research analyst covering QIAGEN and the life science sector. He joins a strong IR team. John Gilardi will continue in his role as Vice President, Corporate Communication. With that, I would like to now hand the call back to Thierry.

Thierry Bernard: Thank you, Roland. So we are coming to the end of our call. So to give you a quick summary, QIAGEN definitely delivered another strong and solid quarter once again exceeding our outlook. And just as important, we took decisive action to strengthen our portfolio and increase returns to shareholders, all aligned with our 2028 ambitions. Our differentiated pillars, mainly serving the continuum from basic research to clinical diagnostics, continue to perform very well. New product launches and additions to our portfolio are on the way to create new relays of growth. We definitely remain focused on creating value through profitable growth, operational excellence, and disciplined capital deployment while maintaining flexibility to pursue attractive acquisition opportunities like Parse.

And a new $500 million share repurchase, we are definitely delivering on our commitments to value creation by positioning QIAGEN for continued momentum as a top performer in 2026 and way beyond. With that, I would now like to hand back to John and the operator for the Q&A session.

John Gilardi: To ensure we can accommodate as many people as possible, please limit yourself to one question and, if necessary, one follow-up. Your microphone will also be muted after you finish asking the questions. Anyone who has a question may press star followed by one at this time. We'll take our first question from Jack Meehan with Nephron Research.

Jack Meehan: Hi, everyone. And congrats, Thierry, John. Enjoyed working together, but I doubt this will be the end. For my question, I wanted to focus on the Parse acquisition. Just had a few questions on that. Just first, if you could talk about how the deal came together and what brought them to the top of the list of targets, you know, as you consider tuck-in M&A. And then if you look at the competitive landscape for single-cell, it is very competitive. Kind of have an entrenched leader with 10x. And then you know, Illumina talks about instrument-free approach with Fluent.

So if you just talk about the differentiation of the technology and you know, kind of why it's better in QIAGEN's hands, and what you can do with it. That would be great. Thank you.

Thierry Bernard: Thank you, Jack, and thanks for your nice comments. So first of all, for me and for the company, the acquisition of Parse is the typical very good example of very good use of our cash for a strategic bolt-on acquisition. First, it is strategic. Second, it is extremely synergistic with our existing portfolio. Third, it is accretive to our top-line growth. And fourth, it will be accretive to our financials in a very reasonable time frame, in less than three years. But because there are different knowledges around Parse, let me come back first on what does Parse offer and what could be the everyday applications. This is a company that we are following since 2017.

We have always believed at QIAGEN that single-cell was a natural extension to our sample prep technology. And since we know them, what has amazed us at QIAGEN is that they constantly executed on what they told us they would deliver, either growth or product development. So let us remember first that single-cell analysis is literally turning biology from a blurry group photo into a real sharp portrait of every individual cell. As a result, scientists all over the world can now study millions to billions of cells at once, for example, to try to see which ones are driving cancers.

Other technologies group all the cells together, so researchers cannot really see which specific cells are actually causing the disease. Parse makes this level of insights completely possible. And we will combine this with AI-driven tools from our QDI portfolio. So why did we select Parse? There was no way for QIAGEN, obviously, to invest into a mid-to-product or portfolio of solutions. First of all, Parse is the fastest-growing company in single-cell analysis and is a very natural extension of our sample prep portfolio. Parse is already present in more than 3,000 labs in the world. Second, Parse offers an instrument-free kit allowing any lab to use it without costly hardware.

Third, and perhaps more importantly, Parse differentiates because it can process millions to billions of cells, far more than any other system and far more than the competitors that you mentioned. As a result, we consider that it is a very natural fit for sample tech, but also with synergies with our QDI and also next-generation sequencing chemistry. Operator, can you please an extra yes.

Katie: Yeah. Thank you. Jack, does he answer your question?

Jack Meehan: Jack? Sorry? I did answer your question. Yes. Hello. Yeah. It does. Thank you. Thank you.

Katie: Thank you. I'm sorry. We'll take our next question from Hugo Solvet with BNP Paribas.

Hugo Solvet: Hi, guys. Thanks for taking my question. I'd like to focus on QIAstat, please. Can you talk to the traction for the new panels, gastro and meningitis, and how do you see them driving an acceleration going forward? And as some of the instruments placed during COVID will likely arrive at the end of their life cycle soon, can you maybe talk to the potential market share gains here? Thank you.

Thierry Bernard: Thank you, Hugo. So QIAstat continues to deliver. I mean, it's very interesting to see again a double-digit growth in Q3. And we all know that Q3 is always normally a kind of softer quarter for QIAstat. Why? Because the syndromic testing market is still driven by respiratory panels. So 11% growth in Q3, one hundred and fifty more placements of systems is a good performance. 70% of the syndromic market. But it's very interesting to see at QIAGEN the growth of our GI panels and meningitis, and especially where we can grow, like, for example, in the North of Europe, or in North America or in the Middle East.

For GI and for meningitis, Hugo, we are growing at more than double-digit. This is very encouraging. And especially in The U.S. I remind you all that The U.S. is still the main market for syndromic testing. So yes, as you said, obviously, some of the customers that we installed during COVID will come for renewal. And basically, renewing with, once again, the QIAstat is the perfect choice. Why? Because since COVID, they have much more panel opportunities, and they will get more in 2026 with the launch of the blood culture panel and the complicated UTI by 2026 for Europe and 2027 for the rest of the world.

So we are well on track to execute on our guidance for 2025. And for syndromic testing, we will definitely beat our midterm guidance that we gave in our Capital Market Day in New York, which was, as you remember, $200 million revenues by 2028. I continue to say with the rest of the company that in syndromic testing, QIAGEN will be a very solid and competitive number two on the market.

Hugo Solvet: Very clear. Thank you very much.

Katie: Thank you. We'll take our next question from Doug Schenkel with Wolfe Research.

Doug Schenkel: Good morning, good afternoon, everybody. Couple of quick questions on the diagnostic side. First, on QIAstat Dx. You now have the three key panels, GI, and meningitis approved in The U.S. I'm just curious, how you have seen these contribute to platform growth since then. I know it's relatively early, but I just want to see if placements and utilization are tracking in line with expectations. And then on QuantiFERON, you guys have done a very good job this year with the investment community. Know, basically talking about the importance of some of the automation capabilities enabled via your partnership with DiaSorin.

You know, I'm just curious if, as we sit here today, you know, given I feel like we've heard less about, you know, any competitive disruption to the franchise, but if there's anything new to talk about there, you know, whether it's via the partnership or more broadly, you know, given performance looks quite good there. Thank you.

Thierry Bernard: Thank you, Doug. So I think the main example that I can give for the impact of those three panels on our U.S. performance for QIAstat is, as we already disclosed at the end of Q2, Doug, we placed more instruments in six months in The U.S. in 2025 than we did in the full year of 2024. I think this is the best testament that those three panels now are really helping. In addition to that, we have reshuffled the team. We have dedicated sales reps for QIAstat in every territory in The U.S., so that helps. So in 2025, we are going to exceed our target for instruments for The U.S., and the growth is very solid.

So I'm very confident. On QuantiFERON, I keep the same approach together with the team. We always believe that competition would come one day to this market. And this is why for the last ten years, Doug, we have prepared for that. Even when there were no names or no precise dates. We are prepared. This is why we built that automation partner with DiaSorin, not only with DiaSorin, also Ticcan and Hamilton. This is why we consistently improve the technology itself. We are now at the fourth generation of QuantiFERON. And this is why also we continue to focus on what is still today the main competition, which is the skin test.

I remind everybody once again that we still have to convert more than 50 million skin tests in the world. And if you just take The U.S., it's around probably 15%, a bit more than 15%, one five million of skin tests that we need to convert. And then we are prepared. We are prepared. And the last thing I would say that makes me very optimistic for QuantiFERON, Doug, is that despite those good results, despite the fact that we continue to grow at double-digit, we continue to prepare for the future. I started to speak about this in our Q2 earnings.

Expect in the coming weeks and months to see announcements improving the workflow of QuantiFERON, the ease of use, and we are also working on further enhancements of the test. So there is no complacency in our approach. We are number one, but we know we need to defend that position. And we are ready. We are ready commercially. We are ready also from a product standpoint.

Doug Schenkel: Thierry, I don't know if you can still hear me, but if you can, I just want to thank you for those answers and more importantly for all the great work you've done over the years. You've really done a great job through a tough period in the industry, bringing a new level of discipline to the company. So I really appreciate that, and thanks for everything. Look forward to seeing you in a few weeks.

Thierry Bernard: This is very humbling. Thank you so much.

Katie: Thank you. We'll take our next question from Casey Woodring with JPMorgan.

Casey Woodring: Great. Thank you for taking my questions. You know, maybe just to start on academic and government. Maybe just walk through, you know, if you can quantify what the shutdown impact is on the quarter. I know that you're assuming the shutdowns for the entirety of the quarter in April. And then some of your peers have talked about European academic and government spend improving. 3Q and, you know, taking a bit more optimistic stance there on the forward outlook. So just elaborate on what you're seeing in academic and government maybe between regions.

Thierry Bernard: Yeah. Thanks for the question, Casey. I mean, obviously, new events since we had the quarterly release is that we are in a shutdown in The U.S. And it's fair to acknowledge as well that nobody, and believe me, I ask many other CEOs, you probably know that I'm still chairing our Industry Association in The U.S., and nobody knows when it's going to stop. So we took a conservative assumption, which is, okay, we are going to be in a shutdown probably until the end of the year. If it stops before, we might see an improvement of our target so far. But let's take a cautious and realistic approach.

So obviously, the shutdown has an impact on our sales because it impacts obviously an already constrained environment in academia and research where we know that people were very cautious to spend on capital expenses, but sometimes on consumables. I believe that QIAGEN is able to mitigate that impact for some reason. First of all, because while we are not immune, obviously, to it, but I believe that we sell products of very high value for these academia and research labs. So it's very difficult to basically not use our products. Second, we do not sell huge price tag instruments, for example. So our solutions are first, very important, second, it's not a big, big budget.

But we see an impact. This is an impact on sales of consumables on a daily basis, and this is an impact also on sales of instruments. But overall, I think it's under control. It's fully factored in our current guidance. And I remind you, Casey, in that environment, unlike many competitors or peers, we have maintained our guidance for the year top line, and we have also improved our guidance from a profitability standpoint. I think this is a testament to the strength of the company.

Casey Woodring: Understood. Thank you. And we'll just reiterate what Doug said. Thierry. Thanks.

Thierry Bernard: This is very nice of you. I appreciate that. Thank you.

Katie: Thank you. We will take our next question from Eisenor with Morgan Stanley.

Eisenor: Explicit about the dollar value of these tariffs, whether these are gross or net of mitigation efforts, and whether we can annualize this impact for 2026.

Thierry Bernard: Thank you. Roland, would you like to take this one?

Roland Sackers: Yeah. Sure. No. Again, I think we will the 90 bps this year is, of course, the net impact. And I think what we said going forward is we have ongoing mitigation. So we do not necessarily expect an increase for next year's mitigations, modest kicking in, particularly also early next year. So we do not miss knowledge out of the day, unfortunately, that is an area where one tweet can change a lot. And but this all the information we're having right now, we do not expect that it becomes a larger impact for us.

Eisenor: Okay. Thanks, Roland. And if I could follow-up on that, on the pricing dynamics, these tariffs surcharges, you're placing on your products, we're hearing from some of your peers that there could be some resistance to the surcharges that are being passed through and potentially resulting in some delay or push out of demand into the next quarter. Just curious, is this something you're seeing or are you comfortable that these surcharges are passing through? Thank you.

Thierry Bernard: Well, I think we can take this question, the both of us. I can tell you, I've been for something like more than twenty years now, unfortunately, on the field. It is always a negotiation when you want to price to pass a price increase ratio. Always a negotiation. Customers, when you are selling value, so the surcharge of coming from tariff, it's not a price increase, it's a surcharge that we communicated to customers. It's not an easy discussion. But we explain the reason, and we explain that we need to share the burden as And it has generated results in our quarter as well. So never easy, we do not see customers postponing decision for this.

It is a discussion. We are always pragmatic, obviously, because we respect customers. But we are also insisting that we need to pass them. I think, Roland, you wanted to add something also to that.

Roland Sackers: I think you covered it very well, Thierry. The end of the day, again, it depends. It is nothing what we do. Again, we clearly look on where we have pricing power, which region, which product. What are the contracts. What's more important is that, I would say, again, if you look on the financial results of this year, that we balance it out quite well. We were able to increase EPS one more time. Now we are 10¢ up. If you look on the overall margin expansion for QIAGEN, again, I just want to remind everybody, I know, Auschel, that you know it quite well, 23%, we ended the fiscal year with an adjusted EBIT margin of 26.9%.

24%, we ended the year with an adjusted EBIT margin of 28.7. For this year, again, if you do the forecast CER, we end with an EBIT margin of 30%. So we have now less than twenty-four months an EBIT margin improvement of three ten basis points. I think that speaks for itself how we're able to manage it, including clearly headwinds like U.S. tariffs.

Eisenor: Thanks very much.

Katie: Thank you. We'll take our next question from Patrick Donnelly with Citi.

Patrick Donnelly: Hey guys. Thank you for taking the questions. And, Thierry, my congrats as well on a great run. You just talk about high level, the moving pieces we should be thinking about for '26? Obviously, the 4Q exit rate has a little bit of a shutdown in it. So just trying to think about high level the approach into '26, both on revenue maybe for you, Thierry, and then Roland, I know you touched on the margins there. Anything high level we should be thinking about as we head into next year? Thank you guys so much.

Thierry Bernard: Yes. I will ask Roland to start with the overall and I will come back on the revenue as well. Roland?

Roland Sackers: Yes. I think, again, talking about on the margin, let me kick it off also on Q4. As I just said, we are probably ending the year with a margin CER-wise of 30%. For the fourth quarter also, while it's clearly a more challenging quarter in terms of The U.S. shutdown, still expect also your constant exchange price an EBIT margin of 29.5%, so still quite high. Yes, we have a bit more currency impact negative impact in that quarter. But nevertheless, I would say still quite strong. And I think that also makes us confident for next year. So for me, it's very clear that we also expect an underlying margin improvement, not only for '26.

And I know that you're all expecting us that we will update the margin for '28, and we're going to do so. And you will see a significant increase there. But of course, I don't do that today. The one thing, of course, I want you to have in mind is why we will have an underlying margin improvement next year. It's quite obvious that, as we just talked about, tariffs is, to a certain extent, still some headwind. And of course, the Argos acquisition is also, to a certain extent, a headwind.

Nevertheless, we will more or less go into the year similar to what we did this year, and I do think we had a good one this year so far. And to complete that, Patrick, thanks for the comments. And the way we see it with the team is quite simple. Two years ago, Patrick, we took a commitment to the market. Which was very simple. 7% sales growth CAGR, 31% EBIT margin as Roland highlighted, 2,000,000,000 of revenues coming from our Pillars of Growth. The obsession of management, the priority and the focus, is regardless of the market environment we deliver on this.

And what I mean by this is that it is clear that since our last Capital Market Day sales are becoming more difficult. You see this with our competitors. You have seen most of our competitors or peers downgrading their outlook or extending their range of potential growth. So what we believe is that if the situation doesn't improve, in 2006, and 2026, we are positioned to go probably around five slightly above everything including with the acquisition of Parse. If the situation doesn't improve, if the situation improves, because also of our organic portfolio, but also the input from Parse, we could be between 5-7% of growth. This is not a guidance call. Let's make it clear.

I'm giving you we are giving you with Roland some flavors. Obviously, we monitor the situation. But what is important? Is that if you look at what this management is doing to do, and it's not just Thierry, it's all the team. Is that regardless of the environment and complexity, we do smart moves with our cash generation and balance sheet. To improve our portfolio of products, Genox, Parse, and we take actions also to continue to improve our profitability. In other words, I would also say that we will position QIAGEN again regardless of the environment, to deliver on the expectation on the market from an EPS standpoint 2026.

Patrick Donnelly: Thank you.

Katie: We will take our next question from Luke Sergo with Barclays.

Luke Sergo: Can you talk about just from the Parse acquisition, you know, plans that you guys or investments that you guys are that you would need to take either on the automation side or anything that you can leverage on your existing portfolio here to add scale or make it more user-friendly across a broader customer base. Thanks.

Thierry Bernard: I mean, it's already extremely user-friendly, and this is why imagine this is still a young company. More than 3,000 customers worldwide. It's a significant and humbling performance, I think. Second, you know that one of the differentiations is that it's completely instrument-free. So it makes the ease of use extremely customer-friendly. Third, there is something that we didn't go into details today. Parse has built, which I find also interesting, is Gigalab capacity to address, especially higher throughput, higher volume customer demand. So I see a lot of interesting synergies, immediate portfolio synergies. Someone selling sample tech at cash and can sell also Parse tomorrow.

And I would say a lot of people from Parse can immediately sell also and leverage our SampleTech portfolio, our QDI solution as well. Second, there is another natural. By definition, we are much more a global company than Parse. So we can immediately, obviously, expand the geographic footprint. And so it's in our business case to continue to support this portfolio with R&D investment. And the two teams are now going to work together as well to see what more synergy from the development standpoint can we put to make sure that we ensure the continuum of solutions from SampleTech but also QDI and also our sequencing chemistry. And all this linked with AI.

Let's not forget that a good driver AI. Also from that acquisition is that we take another dimension with AI in our portfolio.

Luke Sergo: Okay. That's helpful. And then, I guess, from a Kai Acuity perspective, talked about the consumables up double digits. You know, can you just break out what you're seeing there for across the biopharma side? Like, how much of your Kai Acuity piece is actually being sold into that market versus the A and G market? And then a follow-up on just what seeing from a competitive dynamic. Versus especially the new offerings from the droplet technologies.

Thierry Bernard: So once again, I mean, as usual, we deeply respect our competition. What we see is that our direct competition is basically presenting numbers that are not really comparing to our performance. We are still double-digit. That we continue to invest. I said during the call that it's a significant number of new applications in academia and research every year that we are making available for our customers. You know that the solution is also now available for clinical customers. It's what we call the Kayakuity diagnostic. And we see a very good also performance from our companion diagnostic.

So from a direct customer's usage such as biopharma QC controlled by pharma, is boosting way over double-digit and pharma customers are becoming a significant now segment of customers, and they are very interesting. Why? Because first of all, their throughput, their volume of consumable is higher than any other segment. And they are very demanding customers. Second, the portfolio of companion diagnostic digital PCR based is even surprising to us in full transparency. It's growing very fast. And I remind you this positions QIAGEN very well because we are the only company at this moment able to offer to biotechs and pharma companies companion diagnostic solutions that are PCR based, NGS based, or digital PCR based.

So we are confident. Double-digit, it's a good performance. We are a bit impacted by the slow capital expense environment. So we feel it in our number of placements. But once again, what are we talking about? We are still placing above 100 systems per quarter, and this is good for the future of digital PCR because those placements are going to generate obviously consumables.

Luke Sergo: Great. Thank you.

Katie: Thank you. We will take our final question from Jan Cook with Deutsche Bank.

Jan Cook: Yes. Good afternoon. Thanks for squeezing me in. And my first question is on the announced acquisition of Parse. Could you elaborate on the gross and margin EBIT margin profile of this business? If I have done the math correctly, it looks like you don't assume any kind of EBIT contribution from this asset in 2026. And could you also share the specific milestones that are required to trigger the additional €55 million payment? And then my second question is on the Sample Tech business. Very encouraging to see that business returning to growth in Q3. Did you benefit from any one-offs in the quarter? What kind of growth do you expect in Q4 in view of the government shutdown?

Thierry Bernard: Very good. Thanks for the question. I will ask Roland to take the financial on Parse from a contribution to our financials. And then I will address the Sample Tech question. Roland?

Roland Sackers: Yeah. Hi. Hello, Jan. And I do think, again, what we announced is, as you've seen, that we expect a dilution of about 4¢ for 'twenty-six, while we expect revenues of about €40 million. So if you do the math, you can see it has an EBIT dilution, of course, also for that year. But nevertheless, we do expect it becomes accretive in 2028. It is a significant growth opportunity. Again, the revenue growth rate is quite exciting. So yes, it is dilutive EBIT margin-wise for next year, and it's something what we have to eat, and we were clearly trying this underlying to compensate and maybe even to overcompensate for that.

But I would expect, on midterm, there is a nice accretion coming up as this business has healthy gross margins for QIAGEN, and therefore, the revenue growth rate is going to help.

Thierry Bernard: Thank you, Roland. And for Sample Tech, there is no one-off in Q3. And I think I hope that you will be able to attend our deep dive on the twenty-first because there, we will go into details showing you, I hope, and demonstrating that we are perfectly executing on our strategy. And what is this strategy, Jan? For the last four years, we have really invested into further automation. Kayak Cube became Kayak Cube Connect. EZ2 became EZ2 Connect. Kaya Symphony Connect is currently being installed. And in the first semester of '26, you will have two new instruments with CAYA MINI and KIA SPRINT CONNECT. So automation is the way to go.

Second, is investing into very high added value application. The first that comes to my mind, obviously, is liquid biopsy. This is not a number that we publish a lot. But do you know that Sample Tech liquid biopsy by QIAGEN is growing way over double-digit? And when I say double-digit, I'm not talking the 10 marks, way over that. And this is where we need to invest. And third, is investing into technologies of the future. The demonstration is Parse. So there is no time off. I expect that for the full year 2025, especially because of the shutdown, we will be basically overall flattish for the year.

But I continue to confirm our ambition to grow in the '28 objective because those instruments are going to help. And they are perfectly factored in the ambitions that we gave you back in New York two years ago. Which is roughly 3% growth rate. And reaching $750 million revenues.

Jan Cook: Great. Thank you.

John Gilardi: Okay, Thierry and Roland. Thank you very much. And with that, I'd like to close this conference call. And again, thank you for your participation. If you have any questions or comments, please don't hesitate to reach out to us. Thank you.

Katie: Ladies and gentlemen, this concludes the conference call. Thank you for joining, and have a pleasant day.

Eisenor: Goodbye.

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