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01/10 17:31
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary highlights positive financial performance with 30% growth in Process Analytics and increased revenue guidance. The Q&A reveals confidence in market growth, strong performance in China, and new product launches. Despite some concerns about biotech funding and gene therapy headwinds, the company expects margin expansion and has a strategy to double revenue. The positive sentiment outweighs the cautious notes, suggesting a positive stock price movement in the short term.
Revenue Second quarter revenue was $182 million, a reported increase of 15%. Organic revenue growth was 11%, and organic non-COVID revenue growth was 17%. Acquisitions contributed approximately 2 points of the reported growth, while foreign currency was also a 2-point tailwind.
Gross Margin Gross margin was 51.1%, flat year-over-year. Strong volume and productivity offset a tough comparison from COVID revenue, which was a 1-point benefit to margin in the prior year. Mix was a 3-point headwind due to a higher-than-normal mix of procured resins for OPUS columns.
Adjusted Operating Margin Adjusted operating margin was 12%, down 80 basis points year-over-year. This decline was due to COVID and mix headwinds, along with a 1-point headwind from recent acquisitions, which offset price, volume, and productivity benefits.
Adjusted EBITDA Margin Adjusted EBITDA margin was 17.6%, flat year-over-year. This was supported by volume leverage and productivity benefits, offset by COVID-related headwinds.
Adjusted Net Income Adjusted net income was $21 million, a $1 million year-over-year decline. Higher adjusted operating income was offset by $3 million of lower interest income and higher tax provisions.
Adjusted EPS Adjusted fully diluted earnings per share (EPS) for the second quarter were $0.37, compared to $0.40 in the same period in 2024, down 6% year-over-year. This decline was affected by last year's high-margin COVID business.
Cash Position Cash position at the end of the second quarter was $709 million, up $12 million sequentially. This increase was driven by cash flow from operations.
Biopharma Revenues Biopharma revenues grew 20% year-over-year in Q2 2025. This was driven by recent wins at large pharma accounts and cross-selling the entire portfolio. Revenue from emerging biotechs grew high teens, though orders remained muted.
Consumable Revenue Consumable revenue and orders, excluding Proteins, grew greater than 20% year-over-year, marking a record revenue quarter on a non-COVID basis.
Capital Equipment Revenue Capital equipment revenue returned to growth in the high teens, while orders grew greater than 20%. This was driven by traction in both ATS and downstream systems.
Filtration Revenue Filtration revenue grew mid-teens, excluding COVID in Q2. ATF Systems and TFF consumables were meaningful contributors to this growth. Filtration orders were very strong, with a record quarter for ATF order intake.
Chromatography Revenue Chromatography had a record quarter with greater than 40% revenue growth. This was driven by large-scale column demand from pharma and Europe as Q1 orders translated to revenue growth in Q2.
Proteins Revenue Proteins posted high single-digit growth in Q2 2025. This was driven by Chromatography resins and ligands.
Process Analytics Revenue Process Analytics grew over 30% in Q2 2025, with $3 million of revenue from the 908 bioprocessing acquisition and 12% organic growth. This was mainly driven by consumable and service uptick.
Chromatography: Achieved over 40% revenue growth driven by large-scale column demand from pharma and Europe.
Filtration: Mid-teens revenue growth excluding COVID, with strong contributions from ATF Systems and TFF consumables.
Process Analytics: Grew over 30% in Q2, driven by consumable and service uptick, and integration of 908 bioprocessing assets.
Geographic Expansion: Consistent mid-teens growth across all regions, with significant order growth in APAC and a rebound in China orders.
New Modalities: Revenue grew mid-teens, with a pickup in cell therapy activity, though demand is expected to be muted in the second half.
Manufacturing Investments: Investing in manufacturing labor to meet strong order trends and maintain lead times.
Sustainability: Reduced waste generation by 25% in 2024 and named one of the world's greenest companies in 2025.
Strategic Planning: Plans to double company size in the medium term with modest M&A, focusing on Asia, ADCs, cell therapy, and digitization.
System Strategy: Strength in hardware placements expected to drive future consumable pull-through, with dual manufacturing in the U.S. and Europe planned for 2026.
Macroeconomic Challenges: Management acknowledged macroeconomic uncertainties and challenges, which could impact customer demand and pricing pressures.
China Market Dynamics: While there was a rebound in orders from China, management expressed caution about calling it a trend due to potential tariff-related dynamics and uncertainties in the region.
New Modality Demand: Demand for new modalities, including gene therapy, is expected to be muted in the second half of 2025, representing a 1% revenue headwind.
Tariff and Trade Environment: Tariffs and trade-related dynamics are creating slight revenue benefits but also modest headwinds to margins. Dual manufacturing investments are being made to mitigate these risks.
Mix of Procured Resins: A higher-than-normal mix of procured resins for OPUS columns created a 3-point headwind to gross margins in Q2, which could impact profitability if it continues.
Inflation and Pricing Actions: Inflationary pressures are being offset by pricing actions, but these dynamics could still pose risks to margins.
Customer Order Variability: Orders from emerging biotechs remained muted, and there is variability in customer order patterns, which could impact revenue predictability.
Integration of Acquisitions: The integration of 908 bioprocessing assets is largely complete, but any delays or inefficiencies in integration could pose operational risks.
Revenue Guidance: Repligen has increased its 2025 revenue guidance to $715 million to $735 million, reflecting 12.5% to 15.5% organic non-COVID growth. This is an increase from the previous range of $695 million to $720 million.
Organic Growth Expectations: The company now expects 10.5% to 13.5% organic revenue growth, up from the prior 9.5% to 13.5%. This includes 12.5% to 15.5% organic non-COVID growth.
Franchise Growth Projections: Filtration is expected to grow 10% to 12%, Chromatography greater than 20%, Proteins 10% to 15%, and Process Analytics Technology (PAT) approximately 25%.
Capital Equipment and Consumables: Capital equipment placements are expected to drive services and consumable pull-through in the coming years, with a focus on filtration and chromatography systems.
Geographic Growth: China orders rebounded significantly in Q2, and the company is optimistic about growth in China returning in 2026. APAC orders nearly doubled sequentially, and investments in the region are being increased.
New Modalities: Revenue from new modalities is expected to be muted in the second half of 2025. The gene therapy platform is expected to contribute minimal incremental revenue for the remainder of the year, representing a 1% headwind to prior guidance.
Strategic Growth Areas: Future growth opportunities include Asia, ADCs, cell therapy, and digitization. The company aims to outpace industry growth by 5% and double its size in the medium term with modest M&A assumptions.
Gross Margin and Profitability: Gross margins are expected to be in the range of 52% to 53% for 2025, with a focus on profitability and operating leverage.
Tariff and Manufacturing Strategy: By 2026, the majority of the portfolio will have dual manufacturing in the U.S. and Europe to mitigate tariff impacts. Tariff surcharges are expected to provide a slight benefit to 2025 revenue but a modest headwind to margin.
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