OraSure (OSUR) Q2 2026 Earnings Call Transcript

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DATE

Wednesday, Aug. 5, 2026 at 5:00 p.m. ET

CALL PARTICIPANTS

• Chief Accounting Officer - Michele Anthony
• President and Chief Executive Officer - Carrie Eglinton Manner
• Chief Financial Officer - Kenneth J. McGrath

TAKEAWAYS

• Revenue -- $30.6 million, exceeding management's guidance range and representing 9.7% sequential growth.
• Diagnostics Revenue -- $19.4 million, increasing 14.7% sequentially due to stronger public health demand and higher syphilis testing revenue.
• Sample Management Solutions Revenue -- $9.9 million, growing 9% on a sequential basis with improvement across all key customer segments.
• Q3 2026 Revenue Guidance -- $29.5 million to $32.5 million, reflecting expectations for initial contributions from new product launches.
• GAAP Gross Margin -- 43.5%, representing a 120-basis-point sequential improvement from 42.3% in the first quarter of 2026.
• Non-GAAP Gross Margin -- 44.2%, compared to 43.4% in the previous quarter, driven by lower scrap and operational efficiencies.
• GAAP Operating Income -- $5.4 million, primarily reflecting a $22.6 million non-cash reduction in contingent consideration liability.
• Cash and Cash Equivalents -- $161 million as of June 30, 2026, compared to $199.3 million at the end of fiscal 2025.
• Stock Repurchases -- $2 million, utilized to acquire 647,000 shares during the second quarter under an existing authorization.
• Total Share Buyback Status -- 7.7 million shares repurchased since the program's inception, representing nearly 10% of total outstanding shares.
• Research and Development Expense -- $9.4 million, declining sequentially as launch preparation and production readiness for the Colli-Pee device tapered.
• General and Administrative Expense -- $14.4 million, up from $12.7 million year over year due to nonrecurring legal costs related to stockholder activism.
• Operating Cash Flow -- negative $9.9 million for the second quarter, which management stated was consistent with internal expectations.
• Contingent Consideration Liability Reduction -- $22.6 million, recorded as the company updated its regulatory submission plan for the IntelliQ CT/NG test.
• SickleSCAN Revenue Growth -- 2x faster in 2026 than in 2025, reflecting the integration of the product into the company's international commercial channel.
• Total Assets -- $360.6 million at the end of the second quarter, compared to $403.2 million as of Dec. 31, 2025.
• Net Product and Services Revenue -- $29.7 million, compared to $29.8 million in the second quarter of 2025.
• Non-product and Services Revenue -- $915,000, decreasing 34% year over year from $1.4 million.
• GAAP Net Income -- $6.2 million, or $0.09 per diluted share, compared to a net loss of $19.7 million in the prior-year period.
• COVID-19 Revenue -- $1,000, representing a 96% year-over-year decrease as the company completes its multiyear transition.
• Inventory -- $30.1 million, compared to $31.1 million at the end of fiscal 2025, reflecting continued manufacturing footstep consolidation.

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RISKS

• Manner stated, "I would like to call out that we are no longer expecting FDA clearance and US launch to occur in 2026," regarding the withdrawal of the IntelliQ CT/NG regulatory submission following interactions with the agency.

SUMMARY

Management stated that fiscal 2026 remains a transition year for OraSure Technologies, Inc. (NASDAQ:OSUR) as the company moves from restructuring and portfolio simplification to executing a focused growth strategy. The company reported sequential revenue growth in its core Diagnostics and Sample Management Solutions segments, driven by public health demand and innovation milestones. Management highlighted the recent FDA clearance of the Colli-Pee urine collection kit and the Emergency Use Authorization for the OraQuick Ebola 2.0 test as key steps in its decentralized diagnostics strategy. While the regulatory timeline for the IntelliQ CT/NG test has been extended following a submission withdrawal, the company stated it maintains its financial targets for revenue growth in 2026 and operating cash flow breakeven entering 2027.

• Manner announced the company elected to withdraw the FDA submission for IntelliQ CT/NG and stated management is "incorporating feedback from the agency, and we will be working with them on resubmission to bring it to market."
• Management reported receiving FDA Emergency Use Authorization for the OraQuick Ebola 2.0 rapid antigen test, which was developed in partnership with BARDA and detects all four known human Ebola virus species.
• The company achieved FDA clearance for its Colli-Pee urine collection kit, which enables at-home self-collection for sexually transmitted infection testing on the Roche cobas molecular diagnostic platform.
• McGrath noted that G&A expenses are expected to return to "more normalized levels beginning in Q3" as nonrecurring legal and professional costs related to stockholder activism wind down.
• The company paused stock repurchase activity during the quarter to prioritize balance sheet flexibility for product launches, having utilized approximately 55% of its $40 million authorization.
• Manner reported that the National Institute for Health and Care Excellence in the UK issued draft guidance recommending the Ziwig Endotest, which utilizes the company's OMNIgene saliva collection technology.
• Management confirmed that the company is insourcing manufacturing work previously performed by third-party contractors to leverage its Pennsylvania facilities and maintain disciplined cost controls.

INDUSTRY GLOSSARY

• BARDA: Biomedical Advanced Research and Development Authority, a U.S. government office responsible for the procurement and development of medical countermeasures.
• Colli-Pee: A proprietary urine collection device designed for the volumetric collection of first-void urine for diagnostic testing.
• CT/NG: Chlamydia trachomatis and Neisseria gonorrhoeae, two common sexually transmitted infections.
• Decentralized Diagnostics: Medical testing performed at or near the point of care, such as at home or in a clinic, rather than in a centralized laboratory.
• EUA: Emergency Use Authorization, a mechanism used by the FDA to allow the use of unapproved medical products in an emergency.
• IntelliQ: A rapid molecular self-test platform developed by the company for detecting infectious diseases.
• NUCLEO-PRECISION: The company's proprietary, non-toxic chemistry used for the stabilization and storage of biomarkers in urine samples.
• SickleSCAN: A rapid point-of-care test used to identify sickle cell disease and trait.
• SMS: Sample Management Solutions, a business segment focused on tools for collecting and stabilizing genetic material.
• Syndemic: The aggregation of two or more concurrent or sequential epidemics in a population with biological interactions.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to OraSure Technologies Inc. 26 second quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michele Anthony, Chief Accounting Officer. Please go ahead.

Michele Anthony: Thank you. Good afternoon, and welcome to OraSure Technologies Second Quarter 2026 Earnings Call. Participating in the call today for OTI are Carrie Eglinton Manner, our President and Chief Executive Officer and Kenneth McGrath, our Chief Financial Officer. As a reminder, today's webcast is being recorded. And the recording can be found on our Investor Relations website. Before we begin, you should know that this call may contain certain forward looking statements. Including statements with respect to revenues, expenses, profitability, earnings or loss per share and other financial performance, product development, performance, shipments and markets, business plans, regulatory filings and approvals, expectation and strategies. Actual results could be significantly different.

Factors that could affect results are discussed more fully in OTIs SEC filings. Its annual report on Form 10-K for the year ended December 31, 2025 Its quarterly reports on Form 10 Q, and its other SEC filings. Although forward looking statements help to provide more complete information about future prospects, listeners should keep in mind that forward looking statements are based solely on information available to management as of today. OTI undertakes no obligation to update any forward looking statements to reflect events or circumstances after this call. With that, I am pleased to turn the call over to Carrie.

Carrie Eglinton Manner: Thanks, Michele, and thanks to everyone for joining us. Today, I will discuss some of the highlights from Q2, and provide updates on our key priorities for 2026. Q2 was another important quarter in OraSure's transformation. We exceeded our revenue guidance expanded gross margin sequentially, advanced our decentralized diagnostics pipeline in rapid tests and sample management solutions, and continue to position the business for sustainable growth and long term shareholder value in the second half of 2026 and beyond. Through our multiyear transformation, we have moved from restructuring and portfolio simplification to execution against a more focused growth strategy. In 2025, we said that 2026 would be a transition year on the path back to growth.

Q2 demonstrated that transition beginning to take shape through stronger revenue, improving margins and meaningful innovation milestones. Including FDA clearance of Colli-Pee with its nuclear precision chemistry for use with Roche cobas STI test plus FDA emergency use authorization for our second generation OraQuick Ebola rapid test. Also on the innovation front, and an FDA update, is our IntelliQ CT/NG test on the SHERLOQ platform. While we remain very confident in and excited about this first-of-its-kind rapid molecular self-test. I would like to call out that we are no longer expecting FDA clearance and US launch to occur in 2026. I will provide additional details later on this.

But I want to reiterate our conviction that it is an excellent test that performs very well. Following constructive conversations with FDA, however, we recently elected to withdraw our submission. We are incorporating feedback from the agency, and we will be working with them on resubmission to bring it to market. We have positive momentum on multiple fronts. And while we are disappointed in the IntelliQ delay, I want to emphasize this does not change our commitment or ability to deliver on revenue growth in 2026 or cash flow from operations breakeven as we enter 2027. We are strengthening our foundation by leveraging our Pennsylvania manufacturing capabilities.

Insourcing work previously performed by third party contractors, and maintaining disciplined cost controls that are visible in our margin performance. We are elevating our core by diversifying the markets channels, and customers we serve across rapid diagnostics and sample management solutions, as evidenced in our sequential progress. We are accelerating profitable growth through targeted R&D and partnerships focused on high value markets where decentralized access, proprietary know how, scalable manufacturing, and accessible rapid testing and collection solutions can create attractive risk adjusted returns. Focusing on our Q2 results, Total revenue was $30.6 million exceeding our guidance range. And gross margins improved sequentially.

Lapping the divestiture of our risk assessment testing business, and now with COVID almost entirely behind us, we are focused on growing our business. Executing launch readiness, for near term catalysts, and progressing toward operating cash flow breakeven as we enter 2027. The accomplishments we will highlight today are important proof points of that strategy. Moving to those highlights. In mid June, we announced FDA clearance of the Colli-Pee urine collection kit. Which enables at home self collection, of volumetric first void urine samples for STI testing, which can be collected at any time of day. We believe clearance of OTIs differentiated Colli-Pee collection device with its proprietary NUCLEO-PRECISION sample stabilization technology.

Utilized with Roche's STI test on its COBOS molecular diagnostic platform. Can increase access, convenience, and privacy for important STI testing. It also represents a key milestone in our strategy to decentralize diagnostic solutions and connect more people to care while helping increase SMS portfolio growth. We also recently shared that we received FDA emergency use authorization for our OraQuick Ebola 2.0 rapid antigen test. Building on our Ebola 1.0 rapid antigen test, for which we received de novo authorization in 2019,, Our version 2.0 test was also developed in partnership with BARDA. The test detects all 4 Ebola virus species known to cause human disease. Including the Bundibugyo species driving the current outbreak in Central Africa.

This authorization underscores OTI's strength in public health, including our R&D expertise, our regulatory capabilities, manufacturing scale, global reach, and long standing partnerships with governments and global health organizations. Together, these capabilities enable us to respond quickly to emerging and ongoing health threats. With accessible rapid diagnostic solutions. While this outbreak is a stark reminder, of the devastating impact of infectious diseases, it is another reminder that our mission and expertise matter. We are proud to contribute to the response and remain committed to applying our strengths where they make a meaningful difference for communities in need while creating value for our shareholders. In International Diagnostics, our Q2 progress reflects an approach to stabilize, diversify, and localize.

We continue to serve long standing HIV testing customers while also expanding the portfolio and deepening relationships with partners that support public health needs from Africa to Latin America and in between and beyond. While Ebola is our latest example of the strength of our capabilities to serve global markets, Another is our work on nearshoring, an in-country value-added assembly program for our OraQuick HIV self-test. Which we discussed in Q1. These partnerships are increasingly important as national health programs adapt to evolving funding structures, and as customers seek more resilient local supply chains. We expect to share more on localization later this year. A third strong global example is in the progress following our acquisition of BioMedomics, with SickleSCAN.

We are seeing encouraging progress integrating SickleSCAN into our international commercial channel and pursuing opportunities with national health programs in geographies where point-of-need sickle cell testing can address significant unmet need. In the hands of our international sales team, SickleSCAN revenue is growing 2x as fast in 2026 as it did in 2025. Taken together, Ebola 2.0 rapid test access, OraQuick HIV nearshoring, and SickleSCAN expansion reflects a strategic evolution of our international diagnostics business. By addressing critical public health priorities, with increasing localization, while diversifying our revenue base, we are creating new avenues for growth and reinforcing the capabilities that differentiate OTI globally.

We believe this approach positions us to serve customers more effectively strengthen long term partnerships, and create durable value for shareholders. Switching to US diagnostics. We saw stronger public health demand in Q2, including customer purchasing patterns tied to fiscal-year cycle. Even with continued federal funding pressure, HIV testing programs remain an important public health priority, and demand for our market leading OraQuick HIV Self Test was strong in the quarter. We also continue to benefit from the syndemic testing approach we have discussed on prior calls. By offering rapid tests across HIV, HCV, and syphilis, we can help customers address overlapping populations while delivering both clinical and health economic value.

In addition, our consumer and B2B2C channels for the OraQuick HIV Self-Test continue to grow including through telehealth and other digital access points. These channels provide a strong foundation for future OTC and decentralized STI testing opportunities, and reinforce the growing demand for convenience, private access to diagnostic testing. That demand is also reflected in the opportunity we see for IntelliQ CT/NG molecular self-testing. As I mentioned earlier, I want to provide more detail on the withdrawal of our FDA submission and our regulatory path forward. Our studies demonstrated strong performance compared with centralized laboratory molecular diagnostic methods. And we remain encouraged by the product's performance and its potential to address an important public health need.

Based on the strength of our data, across all elements of performance, the demonstrated patient and provider need for this test and the value of IntelliQuick's differentiated profile. We had anticipated FDA clearance around this time. Following constructive interactions with the FDA, and in consultation with them, we are building our plan for resubmission. While we are disappointed by the delay in obtaining regulatory clearance and broader market access for IntelliQ CT/NG our confidence in the quality, performance, and clinical value of the test has only increased. We will provide additional updates on our progress in future quarters as we move quickly to complete the work we think is needed for regulatory clearance and full market launch.

Moving to sample management solutions. We are seeing various levels of improvement across key customer segments, including commercial, advanced diagnostic testing laboratories, and other precision health care applications. Including microbiome collection, along with early signs of recovery in academic and research channels. We are encouraged by increasing utilization of genetic insight to assess disease risk inform diagnoses, and guide patient care. For example, The UK's National Institute for Health and Care Excellence also known as NICE, Its recent draft guidance recommending Ziwig Endotest marks another important commercial validation of saliva based diagnostics in women's health and expands access to noninvasive testing for endometriosis within The UK health care system.

've talked about Ziwig before, and EndoTest incorporates DNA Genotek's OMNIgene•ORAL saliva collection, and nucleic acid stabilization technology, underscoring the capability of our collection solutions to support advanced testing. This adoption demonstrates the versatility of our technology beyond genetics, into high value diagnostic applications and it reinforces our position as a trusted partner for innovative developers. As demand grows for similar accessible, patient friendly testing, we believe our broad portfolio of collection technologies are well positioned to support the next generation of women's health, wellness, and molecular diagnostic programs worldwide. Additionally, in SMS innovation, we were excited in Q2 to announce the important milestone we achieved with Dx urine collection kit receiving FDA clearance.

The kit solution comprises the Colli-Pee Dx collection device, which enables volumetric self collection of biomarker rich urine. Enabling a broad range of testing solutions. And our NUCLEO-PRECISION chemistry, which is proprietary and nontoxic, for the stabilization and storage of biomarkers. The reason FDA clearance applies to 8 STI indications, that is 4 types of Roche cobas tests chlamydia, gonorrhea, trich, and nGen, for both male and female self collected urine on the Roche cobots molecular diagnostic platform. The Colli-Pee launch is off on nice start as customers are expressing strong interest in the innovation and its potential to expand access to STI testing, that is more convenient and private. Overall, SMS revenue increased sequentially in Q2.

Combined with the anticipated contribution from Colli-Pee and its nuclear precision chemistry, we remain confident in the long term outlook for sample management solutions and its ability to help drive growth in 2026 and beyond. With that, I will turn the call over to Kenneth to discuss our financial results and guidance.

Kenneth J. McGrath: Thanks, Carrie. Total revenue in the second quarter was $30.6 million and grew 9.7% on a sequential basis. Diagnostic products generated $19.4 million of revenue in Q2, with U. S. Revenue higher than international revenue. Diagnostics revenue grew 14.7% on a sequential basis. Reflecting stronger public health demand including customer purchasing tied to fiscal-year cycles. As well as higher syphilis revenue and the addition of BioMedomics SickleSCAN sales. Sample Management Solutions revenue in Q2 was $9.9 million and grew 9% on a sequential basis with growth across segments. Our Q2 GAAP gross margin increased 120 basis points sequentially to 43.5% from 42.3% in Q1 2026. And non GAAP gross margin in Q2 increased to 44.2% compared to 43.4%.

Gross margin expansion was driven by lower scrap and operational efficiencies, partially offset by revenue mix. Looking at GAAP operating expense in Q2, R&D expense was $9.4 million sales and marketing expense was $6.6 million and general and administrative expense was $14.4 million. R&D expense declined both sequentially and year over year reflecting the tapering of launch preparation and production readiness spending for our Colli-Pee device. The year over year increase in G&A was primarily driven by nonrecurring items. Including higher legal and professional service costs related to our proxy and stockholder activism. As we stated last call, we expect G&A expense to decline to more normalized levels beginning in Q3 as these nonrecurring items wind down.

Included in the Q2 financials the company recorded a reduction in its contingent consideration liability as a result of updating our submission plan to incorporate feedback from the FDA for the CT/NG test on the SHERLOC platform. Non cash stock compensation expense in the second quarter was $2.3 million and depreciation and amortization expense was $2.4 million and our GAAP operating income in Q2 was $5.4 million and our non GAAP operating loss was $14.7 million. Moving to our balance sheet. We ended the quarter with zero debt and total cash and cash equivalents of $161 million. During the second quarter, we deployed $2 million to repurchase 647 thousand shares of common stock.

Since initiating the program last year, we have returned $22 million to shareholders through the repurchase of 7.7 million shares. Representing nearly 10% of our outstanding shares. And utilizing approximately 55% of the $40 million authorization. Given the commercial opportunities ahead, we paused additional repurchase activity during the quarter, and are prioritizing balance sheet flexibility to support launch related investment across the portfolio. Including Colli-Pee, and Ebola 2.0 rapid test. The authorization remains in place, and we will continue to evaluate repurchase over time. Consistent with our balanced capital deployment strategy, we continue to evaluate organic and inorganic opportunities that can accelerate our profitable growth in high value markets, leverage our existing capabilities.

Operating cash flow in the second quarter was negative $9.9 million, which was consistent with our expectations. As Carrie stated, we expect to return to breakeven and cash flow from operations entering 2027. This view is supported by our outlook for revenue growth including anticipated contributions from new product launches as well as our continued focus on cost savings and operating efficiencies. Moving to guidance. We expect revenue in the third quarter of $29.5 million to $32.5 million And we expect our gross margin in Q3 to be similar to Q2. With that, I will turn the call back to Carrie to conclude.

Carrie Eglinton Manner: Thanks, Ken. As we enter the second half of 2026, OraSure is a more focused and operationally disciplined company with a stronger innovation pipeline. We simplified the portfolio strengthened our production capabilities, and consolidated our manufacturing footprint We advanced important technology and product milestones while also a return to growth and preparing for revenue contributions from the launches of Colli-Pee and our Ebola 2.0 rapid test. These achievements reflect the discipline of our operating model, the strength of our innovation engine, the differentiation of our products, and the commercial value and execution of our decentralized diagnostic strategy.

Looking ahead, we remain focused on converting our pipeline into growth, expanding our portfolio across attractive markets and leveraging our manufacturing capabilities and global partner relationships. Together, these drivers position Orasure to deliver sustainable, long term value for our customers, partners and shareholders. Thank you for your continued support and confidence in OTI. We look forward to updating you on our progress next quarter. With that, I am pleased to turn the call over to the operator.

Operator: Thank you. Thanks. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Our first question comes from the line of Mac Etoch of Stephens. Your line is now open.

Analyst: Hey. Good afternoon. Maybe just a couple of questions for me. Just given the CT/NG update, I would love to get a sense of how you are thinking about the timing around a resubmission and then potential approval past that? And then secondly, how is that affecting your cost structure moving forward? I know there is some lingering costs around post approval studies that were going on as well. Thanks.

Carrie Eglinton Manner: Yeah. Thanks. Thanks, Mac. You know, I will just start with our confidence in the IntelliQ test and the performance that it demonstrated. You while we are working to incorporate FDA feedback, we plan to resubmit it. This is a recent discussion And in terms of timing, we plan to come back to share more on that. You know, we are we are obviously moving quickly in collaboration with them. This is a-- this is a priority. But we will we will update you. We will update our investors with more on timing as we have that.

Kenneth J. McGrath: Yeah. And Mac, as far as the cost, this will not this will not incrementally add to our overall cash flow from operations usage. there is an offset here related to the milestone payments that will that will be reduced And, obviously, you can imagine as we go forward, with our plan, there will be some dollars, incremental dollars to support that. But that will be lower than the expected reduction in milestones.

Carrie Eglinton Manner: So in terms of how we think about the total year, Mac, we are clearly disappointed in that delayed timing. Obviously, we were working hard toward a-- to work toward clearance and launch But in terms of our exit expectations for the year, I want to reiterate, it does not change our outlook on growth for the year, and it, in an unanticipated way, we expect that to cost less. We had every intention of that clearance. We believe it is a matter of timing. And this is all about working towards the resubmission.

Analyst: Got it. And maybe just to clarify on that point, Kenneth, it sounds like maybe any incremental cost that might be incurred from whatever it might be will be offset by a reduced like, a reduction of that $20 million contingency payment?

Kenneth J. McGrath: Correct.

Analyst: Awesome. Thank you. And then maybe in terms of SMS, I think I heard in my connection's a little spotty today, but can you can you speak to what you are seeing in terms of the advanced genetic testing lab demand?

Carrie Eglinton Manner: Yes. So we are seeing the sort of continued not only green shoots in other labs that are growing, but we are seeing a fairly consistent recovery amongst kind of the advanced genetic labs more broadly. So, you know, we delivered that sequential growth. You I would say this has remained muted post COVID. But there is progress, and we see not only advanced genetic testing labs, we see areas like microbiome collection that had been somewhat soft In the last couple of years, we see-- have seen some uptick there as well. Got it. Thank you. I will jump back in the queue. Great.

Operator: Thank you. I am showing no further questions at this time. I would like to turn it back to Carrie Eglinton Manner for closing remarks.

Carrie Eglinton Manner: Great. Thank you to all of you for your engagement and support. Ari, thank you for the facilitation. We look forward to providing updates in the next quarter. With that, we will close the call.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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