NASDAQ:QDEL QuidelOrtho Q2 2024 Earnings Report $25.92 -1.77 (-6.38%) As of 02:09 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast QuidelOrtho EPS ResultsActual EPS-$0.07Consensus EPS -$0.22Beat/MissBeat by +$0.15One Year Ago EPS$0.26QuidelOrtho Revenue ResultsActual Revenue$637.00 millionExpected Revenue$613.51 millionBeat/MissBeat by +$23.49 millionYoY Revenue Growth-4.20%QuidelOrtho Announcement DetailsQuarterQ2 2024Date7/31/2024TimeAfter Market ClosesConference Call DateWednesday, July 31, 2024Conference Call Time5:00PM ETUpcoming EarningsQuidelOrtho's Q1 2025 earnings is scheduled for Wednesday, May 7, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by QuidelOrtho Q2 2024 Earnings Call TranscriptProvided by QuartrJuly 31, 2024 ShareLink copied to clipboard.There are 9 speakers on the call. Operator00:00:00to the Quidel Ortho Second Quarter 20 24 Financial Results Conference Call and Webcast. Please note this conference call is being recorded. An audio replay of the conference call will be available on the company's website shortly after this call. I would now like to turn the call over to Juliet Cunningham, Vice President of Investor Relations. Speaker 100:00:27Thank you. Good Thank you. Good afternoon, everyone, and thanks for joining the Quidel Ortho's Q2 2024 Financial Results Conference Call. With me today are Brian Blaser, President and Chief Executive Officer and Joe Buskey. This Speaker 200:00:46conference Speaker 100:00:52We've posted a supplemental presentation on the Investor Relations page that will be referenced throughout this call. This conference call contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not strictly historical, including company's expectations, plans, future performance and prospects are forward looking statements that are subject to certain risks, uncertainties, assumptions and other factors. Actual results may vary materially from those expressed or implied in these forward looking statements. Information about potential factors that could affect our actual results is available in our annual report on Form 10 ks for the 2023 fiscal year and subsequent reports filed with the SEC, including Risk Factors sections. Speaker 100:01:54Forward looking statements are made as of today, July 31, 2024, and we assume no obligation to update any forward looking statement except as required by law. In addition, today's call will include a discussion of certain non GAAP financial measures. Tables reconciling these non GAAP measures to their most directly comparable GAAP measures are available in our earnings release and the supplemental presentation, which are on the Investor Relations page of our website atquidelortho.com. Lastly, unless stated otherwise, all year over year revenue growth rates given on today's call are given on a comparable constant currency basis. And now I'd like to turn the call over to our CEO, Brian Blaser. Speaker 300:02:46Thanks, Juliet. Good afternoon, everyone. I'm pleased to be here with you to discuss our 2nd quarter results. Today, we reported 2nd quarter revenue of $637,000,000 and adjusted EBITDA of $90,000,000 which are in line with our expectations across our businesses and global geographies. Joe will cover our detailed quarterly financials later in this call, but I'd like to start by providing some observations from my nearly 90 days here at Quidel Ortho as well as outline our key priorities as we move forward. Speaker 300:03:21During times of change, it's important to take a step back and assess where we are versus where we need to be. And we began that process in earnest when I arrived in early May. And I can assure you, we are leaving no stone unturned. The leadership team and I have been reviewing every aspect of our business fundamentals and product portfolio to define our mission critical near term programs. We believe these programs will yield the highest returns in growth and profitability. Speaker 300:03:53After completing many of these reviews, it is clear to me that our value proposition is strong, our underlying business is stable and we see a clear pathway to our adjusted EBITDA margin expansion goal in the mid to high 20% range over the next 2 to 3 years. And let me provide some context and why I have confidence that we can achieve this goal. First, Quidel Ortho's broad product portfolio spans the entire continuum of care from hospital reference labs to near patient point of care testing. In vitro Diagnostics is a $48,000,000,000 industry and Quidel Ortho directly serves segments of approximately $19,000,000,000 growing at mid single digits. Our overarching mission is to improve patient outcomes in each care setting at every step of the healthcare journey and our product portfolio is uniquely suited for both centralized and decentralized testing settings. Speaker 300:04:53We serve the patient from prevention to diagnosis and in treatment to monitoring. Few companies in our space have this breadth and this is particularly exciting because of what it represents in terms of opportunity for growth and impact. Of course, most opportunities can present themselves initially as challenges and Quidel Ortho has certainly had its share of these over the last several months. In my view, our challenges are not structural to our business, rather they are mainly internal cost execution and process issues which are largely under our control. And we are taking aggressive action targeted to resolve these issues as quickly as possible. Speaker 300:05:36I see many corollaries to similar challenges I previously faced in my years in the diagnostics industry and the journey we are on today. Over the last few months, I've had the opportunity to meet with and gather insights from many key customers, suppliers, employees, investors, which have helped us align our near term priorities. And from these conversations, it is clear that our highest priority remains delivering on our customer commitments at the highest levels of quality and compliance. Then we must improve the way we run the business and our financial performance with a critical eye on consistency. And lastly, we must be steadfast in driving our product timelines and delivering on our portfolio commitments. Speaker 300:06:22Savanna is the perfect example. After multiple delays and disappointments, Savanna is admittedly late to the party. But despite being late, we see Savanna continuing to provide significant competitive advantages in the molecular point of care market both today and well into the future. A successful U. S. Speaker 300:06:43Launch of Savanna will offer incremental revenue and margin growth opportunities for us and we are committed to getting it across the finish line. Building on the Savanna instrument and HSV panel approvals in the U. S, we expect to enter clinical trials on our respiratory panel later this year. And while we won't attempt to predict regulatory timelines, our goal is to be in the market with both the respiratory panel and the SDI panel in 2025. In parallel, we are realigning our cost structure to support improved profitability and achieve durable long term growth. Speaker 300:07:18We executed on our previously announced $100,000,000 in annualized cost savings initiatives primarily through staffing reductions. We expect to realize savings of approximately $50,000,000 in the second half of this year and the remainder in the first half of twenty twenty five. And we are not stopping there. We are in the early stages of improving our overall business efficiency with initiatives in procurement, supply chain, manufacturing quality and IT. And these initiatives are expected to show incremental margin contribution in 2025 and 2026. Speaker 300:07:52I look forward to providing more details over the coming quarters as we move forward. And finally, let me reiterate that the underlying health and fundamentals of our business remain intact. We are focused on challenging every aspect of the business to improve our performance while balancing the needs to invest for future growth. Before I turn the call over to Joe, I'd like to thank our employees around the globe without whom we could not meet our goals. I realized that periods of major change including leadership changes and staffing reductions are never easy. Speaker 300:08:28However, these changes are needed to become a stronger, more efficient company that can better serve our customers and shareholders as well as be a great place for employees to work and grow their careers. And so with that, I'll hand it over to Joe. Thanks, Brian. Speaker 400:08:44Before I get into the 2nd quarter numbers, I'd like to share how great it's been for the entire management team to have Brian on board. He's led the portfolio review and deep dive into every aspect of our business to help identify areas to improve efficiency and productivity. I firmly believe the changes we are making now will enable us to become a significantly stronger company in the future. Now let's begin with details of our Q2 results on Slide 4 of the earnings presentation, which is posted on our IR website. Unless stated otherwise, all year over year revenue growth rates on today's call are provided on a comparable constant currency basis. Speaker 400:09:28During the Q2 of 2024, we performed in line with our expectations and we continue to drive business momentum. As a reminder, the Q2 is typically the seasonally lowest revenue quarter of the year for our business. Total reported revenue of $637,000,000 was driven by solid performance across all geographies. Total recurring revenue, which we define as revenues from sales of our assays, reagents, consumables and services and excludes instrument sales grew 5% in constant currency compared to the prior year period. This figure excludes COVID-nineteen and U. Speaker 400:10:11S. Donor screening revenue, which is a business we are exiting. Our non respiratory business, which includes labs, transfusion medicine and portions of point of care grew 2% in constant currency year over year. Our labs instrument revenue declined 15% due to higher instrument revenue in the prior period as we addressed the significant Labs instrument backlog last year. We saw continued strength, however, in Labs recurring revenue growth compared to the prior year period of 4%. Speaker 400:10:49After resolving the 2023 supply chain issues, Q2 2024 Instruent revenue was in line with our prior normalized levels. Within our labs installed base, integrated and auto analyzers grew 7% 16% respectively compared to the prior year period. And immunohematology revenue grew 2% compared to prior year period in line with market growth and our expectations. The respiratory side of the business had a good quarter with strong contribution from flu testing on the Sofia platform in the professional setting. In addition, our combo product exceeded 50% of our Q2 flu revenue in the U. Speaker 400:11:33S. Once again. Excluded COVID-nineteen revenue, respiratory revenue grew 18% in Q2, 2024. As a reminder, the COVID-nineteen public health emergency in the U. S. Speaker 400:11:46Ended in May of 2023, and we continue to see strong sales throughout the Q2 of 2023. COVID-nineteen revenue was $19,000,000 in Q2 of this year compared to $56,000,000 in the prior year period. And year to date COVID-nineteen revenue was approximately $70,000,000 which puts us nearly halfway to our full year forecast of 150,000,000 dollars And we continue to see good pull through of respiratory consumables into the 3rd quarter. From a regional perspective, excluding COVID-nineteen revenue, we achieved the following Q2 constant currency growth rates. 1st, North America grew 2% and recurring revenue, which excludes U. Speaker 400:12:32S. Donor screening, grew 5%, driven by consumables and our combo product on the Sofia platform. EMEA grew 2%, which is driven by higher immunohematology reagents, largely offset by lower instrument revenue. China grew 4%, which is driven by labs growth of 8%, partially offset by timing factors in other lines of business. We continue to expect high single digit growth in China for the full year. Speaker 400:13:01And finally, for Rest of World, which includes Japan, Asia Pacific and Latin America, we grew 3%. Moving down the P and L, Slide 6 shows 2nd quarter 2024 adjusted gross profit margin of 44.2% versus 45.6% in the prior year period. The 140 basis point decrease was primarily driven by lower COVID-nineteen product sales, which are high margin contributors. Non GAAP total operating expenses in the Q2 of 'twenty four compared to the prior year period were roughly flat in absolute dollars, but increased by 200 basis points as a percentage of revenue due to the higher COVID-nineteen revenue in the prior period. On a sequential basis, however, total operating expenses decreased by 13 in absolute dollars. Speaker 400:13:58And we continue to expect continued margin improvement in the second half of twenty twenty four from the cost savings actions we've taken. As Brian mentioned, we have executed $100,000,000 in annualized cost savings measures in 2024, which primarily involve staffing reductions of approximately 7% of our global workforce compared to the end of 2023. We expect the benefits from these cost saving measures to be realized in the second half of twenty twenty four and the first half of twenty twenty five. As part of our ongoing business efficiency efforts and as previously communicated, we reviewed our real estate footprint and are consolidating where it makes sense to do so. As a result, we expect to sell 2 of our facilities, 1 Marietta, New Jersey manufacturing and administrative building, which we expect to lease back and our McKellar San Diego manufacturing facility. Speaker 400:14:57These facility sales, which we expect to occur by year end, will generate cash and decrease ongoing operating costs. Due to our decision to sell these properties, we have moved these assets on our balance sheet to a line called assets held for sale. We have also recognized a non cash accounting book loss of $57,000,000 related to the sale of these two properties. This loss is primarily driven by the purchase accounting step up 2 years ago and the unfavorable San Diego commercial real estate market driven by excess capacity. Adjusted EBITDA was $90,000,000 compared to $113,000,000 in the prior year period and adjusted EBITDA margin was 14% compared to 17% in the prior period mainly due to the factors mentioned above. Speaker 400:15:48Adjusted diluted loss per share was $0.07 compared to annualized diluted EPS of $0.26 in the prior year period. Again, this year over year change was primarily due to lower COVID-nineteen revenue in 2024. Our 2nd quarter effective adjusted net income tax rate was 23%, which was consistent with the prior year and in line with our current year full year expectations. Turning now to the balance sheet on Slide 7. We finished the quarter with $107,000,000 of cash. Speaker 400:16:25As expected, given the seasonality of the business and the timing of the benefit of the cost reductions, we drew a $253,000,000 on our $800,000,000 revolver year to date. Recurring free cash flow was negative $66,000,000 as anticipated given seasonally lower second quarter revenue. And we expect cash flow generation to improve in the second half of twenty twenty four as our cost saving initiatives take up, along with seasonally higher revenue expected in Q4. We continue to expect full year recurring free cash flow generation to be positive. During the Q2 of 2024, our consolidated leverage ratio was 3.4 times, including pro form a EBITDA adjustments as permitted and defined under our credit agreement for staffing reductions, business efficiencies and integration costs. Speaker 400:17:19Based on our current expectations, we expect our consolidated leverage ratio to remain flat to current levels at year end, including the pro form a EBITDA adjustments, compared to the 4.25 maximum leverage ratio specified in the amended credit agreement. I'd also like to now address a 10 ks amendment that we will file later today. Ernst and Young, our independent auditor, underwent a regulatory inspection of their audit of Corral Ortho. In response to this inspection, Ernst and Young determined that an additional critical audit matter should have been included in the audited report filed with our 2023 10 ks. Apart from the additional paragraphs, there were no changes to the unqualified opinion in the UI auditor report or to the reported financial statements. Speaker 400:18:18Lastly, as you know, with Brian coming on board in early May, we suspended our 2024 financial guidance on our Q1 earnings call to give him an opportunity to assess the business and evaluate our plans for the rest of the year. Our Q2 performance was in line with our expectations, and this reinforces what we articulated in our February call. That is that we continue to expect to be at or slightly below the low end of our previously communicated 2024 financial guidance ranges for revenue, adjusted EBITDA and adjusted EPS. Recall that this view factored in removing U. S. Speaker 400:19:00Savanna revenue and lowering our COVID-nineteen revenue forecast to $150,000,000 for the full year. In addition, our first half twenty twenty four performance reinforces our belief that going into 2025, our business is a solid mid single digit growth company excluding COVID-nineteen U. S. Donor screening revenue. Over time, however, with the expected addition of Savanna Respiratory and CLIA waiver regulatory approvals on the U. Speaker 400:19:30S. As well as anticipated menu expansion, we believe we can achieve incremental revenue growth. As Brian said, we expect provide additional color on our margin improvement plans and milestones in the coming quarters. I would now like to ask the operator to please open up the call for questions. Operator00:19:52Thank And our first question today is from the line of Jack Meehan of Nephron Research. Please go ahead. Your line is open. Speaker 500:20:20Thank you. Good afternoon, everyone. Solid results here. For Brian, I wanted to start, you talked about no stone unturned when it comes to the margin initiatives, flagged a bunch of different opportunities. I was wondering, as you look at them relative to the $100,000,000 in terms of the staffing reduction, do you think collectively some of these other opportunities can be in that zip code, or just any relative framing for the opportunities beyond the initial cost targets you've laid out? Speaker 300:20:56Yes. Hi, Jack. Thanks for the question. As I said in my prepared remarks, we've achieved $100,000,000 in savings. We're not stopping there. Speaker 300:21:10Most of that initial round of savings was from staffing reductions. We took about a 7% staffing reduction. We're going to see somewhere in the order of 10% to 12% hitting the bottom line just because of the mix of the higher level positions there. But we're in terms of leaving no stone unturned, we're very aggressively going after additional savings in operations, supply chain, procurement, IT, really every corner of the company. And I think where we're at is we're going to continue to provide updates on the savings position as we go through the years in the coming quarters, but it is significant. Speaker 400:21:56Yes. And Jack, I would add on to that, just to reiterate what Brian said in the prepared remarks. We do believe that we will get this company to mid to high 20s adjusted EBITDA margin over the next 2 to 3 years. So, you can do the math on that and we'll obviously provide more updates as we move through the next several quarters. Operator00:22:23Thank you. Our next question today is from the line of Casey Woodring of JPMorgan. Please go ahead. Your line is now open. Speaker 600:22:31Great. Thank you for taking my questions. I just wanted to walk through the cash flow in the quarter, the negative $66,000,000 in free cash. Maybe if you could just provide some guideposts on how we should think about number for the that number for the rest of the year? I think you said you expect positive free cash in the quarter, but anything to add to that? Speaker 600:22:47And then also just on leverage, can you just elaborate on the draw in the quarter? You brought that up book at $2,600,000,000 versus last quarter. So confidence in just maintaining the leverage ratio through the rest of the year? Speaker 400:23:02Yes. Casey, it's Joe. So we had always expected that the recurring free cash flow for Q2 would be negative, primarily based on the fact that it is seasonally our lowest revenue quarter of the year typically. And the fact that the cost savings initiatives that we have executed will largely impact the second half of the year. So the draw on the revolver and the negative 66 recurring free cash flow is honestly in line with our expectations and frankly a little bit better because we did perform well in the P and L. Speaker 400:23:48CapEx was right where we expected it to be, no surprises there. And I would say the same with operating cash flow and working capital, no surprises there. We did pay down 52,000,000 dollars on the debt as provided in the credit agreement. So again, that's in line, no surprise there. We do expect in the second half that we will generate recurring free cash flow. Speaker 400:24:14I will say it's probably a little more heavily weighted into Q4, again primarily related to Q4B in our seasonally heaviest quarter for revenue typically. And I do expect us to bring down the draw amount drawn on that revolver quite a bit by year end. And I do expect that the leverage ratio will be in a relatively consistent place to where we are right now under the credit agreement with again plenty of cushion versus that 4.25 leverage ratio covenant in the credit agreement. Operator00:24:57Thank you. Our next question today is from the line of Andrew Breckman of William Blair. Please go ahead. Your line is open. Speaker 700:25:04Hi, everyone. This is Maggie on for Andrew today. Thanks for taking our questions. Maybe just to expand on the cost savings initiatives a little bit that you've talked about in the past. I think an area that you were taking a look at was R and D. Speaker 700:25:19So recognize that it still might be a little bit early here to give details on specifics. But at a high level, can you talk about the specific criteria you're going to use when looking at the spend there and just any areas of prioritization for the team? Thanks. Speaker 300:25:36Yes. So maybe I'll answer that question a little more broadly. Really what we've done is take the last couple of months that come on board to focus the business down to really 4 critical priorities. The first is, we have to operate this business to achieve the very highest level of customer satisfaction and efficiency possible. So that's job 1. Speaker 300:26:022nd is, as we've discussed going after this cost structure, to get our cost structure in line with competitive benchmarks. And then as you're discussing, we've been focusing our R and D organization down on the very critical few programs that we need to deliver and execute on really is a matter of creating, focusing and getting the job done. And that those have been in the areas of Savannah, making sure that we can get that across the finish line, menu expansion for our Poitier and our lab products and then a number of lifecycle management tasks that are critical to maintaining our on market products at a very high level of quality. And then the 4th thing is refreshing our commercial growth strategies both in the U. S. Speaker 300:26:58And outside the U. S. And so working with the commercial team there. So every area of the business we focused down including our R and D group, which has meant that we have taken some resource out of that areas of business. But I think we've really doubled down in the areas that are the most important for us in that segment of our business. Speaker 300:27:22And so if you extend Speaker 400:27:40line and the SG and A line. And again, it will be more heavily weighted in the second half. We got some benefit in Q2, small, most of it will be in the second half and first half, but it will be hitting several of those line items on the P and L. Operator00:27:56Thank you. Our next question today is from the line of Patrick Donnelly of Citi. Patrick, please go ahead. Your line is open. Speaker 200:28:04Hey, guys. Thanks for taking the questions. Maybe another one, Joe, on the margin side. I apologize for the focus here. Just when you think about the path to that mid to high 20% margins, is there a certain level of revenue that you need, particularly on the respiratory side that you guys view? Speaker 200:28:23Obviously, the incremental, decrementals there are pretty important. How do you think about just the top line profile to reach that? And again, if revenue is a little bit slower, maybe just talking about the key levers that you have there to lean on to get the margin story going? Thank you, guys. Speaker 400:28:41Hey, Patrick. Yes, thanks for the question. So every margin improvement story is typically a combination of cost reductions as well as revenue growth. It's usually not done with 1 and only 1. It is going to be a combination. Speaker 400:28:59So we are going to continue to identify efficiencies and productivity. As we've said several times on the call today, we're not done. We're going to instill a continuous improvement culture here led by Brian to find those efficiencies and productivities. But it's also about the revenue to your point. And as I said in the scripted remarks, we are a mid single digit top line growth company now with the products we have. Speaker 400:29:30We certainly have aspirations to be a higher growth company. And we believe that Savanna that once we've got the panel filled out and approved in the U. S. And we have a full launch, we believe that we can add to that mid single digit growth profile. That will certainly help us move closer to that mid to high 20 percent adjusted EBITDA margin profile for sure. Operator00:30:00Thank you. Our next question today is from the line of Andrew Cooper of Raymond James. Please go ahead. Your line is open. Speaker 800:30:08Thanks for the time. Maybe just first, Brian, now that you've dug a little bit deeper on Savanna and some of the moving parts there, would love your thoughts on sort of the menu trajectory there and then how you think about RVP for specifically relative to maybe the larger panel and how you think about the menu and building a differentiated set of assays there in the molecular space? Speaker 300:30:35Yes. Sure, Andrew. Thank you for the question. And as I said, Savanna, we know we're late to the party here with the product. But as I've looked at this product, I truly believe it's got a compelling value proposition. Speaker 300:30:52I think now and well into the future, our team is working tirelessly to get this product done and onto the market. And when you look at this product, you've got in the market, you've really got to have the right balance of workflow, turnaround time, the number of targets as well as the cost profile. And as Savanna, we think that it offers advantages over many of the systems that are on the market and will be on the market in the future there. If you look at workflow, it's truly a sample in results out platform, turnaround time less than 30 minutes. The menu and I'll discuss that more, but I think the menu when approved will be a real feature of the platform. Speaker 300:31:50And importantly, the cost of the test is positioned well below our competitors, I think. And that advantage I think will hold for some time. As you mentioned, we're on the market now with the herpes and shingles markers that were already approved. We have the RPV4 assay that is we'll be entering trials in the fall. We hope to be in the market in 2025 with that. Speaker 300:32:22Following that, we are already underway in clinicals with the STI panel, all should be able to get again without predicting regulatory timelines in 2025. And then following that, we have a GI panel for both bacterial and viral vectors and also parasites. So, we've got a nice string of content coming. We also I didn't mention we have syphilis underway for approval there as well. So a nice group of content on the platform, I think competitive differentiation. Speaker 300:33:04And although it certainly had its challenges, we're very near the finish line here and truly focused on getting across the finish line. Operator00:33:18And our next question comes from the line of Conor MacNara of RBC. Please go ahead. Your line is open. Speaker 400:33:25Hey, thanks for the time. Just quickly on guidance, do you plan on reinstating guidance for 2024? And if so, is that going to be around an event? No, I don't think, Conor, we've said previously and we can reiterate, 1st of all, that and we said this in the prepared remarks that we believe that this was a good quarter for us. Nothing happened in this quarter that would meaningfully change what we said on the last earnings call, which was we think we are still at or slightly below the low end of the guidance provided back in February for the full year. Speaker 400:34:05We are still in a suspended guidance mode though, just to be clear, to give Brian time to assess the business. And it's most likely that we will unsuspend guidance on the Q3 earnings call. Operator00:34:22Thank you. And with no further questions in the queue at this time, this will conclude the Quidel Ortho's 2nd 2024 Financial Results Conference Call and Webcast. Thank you all for joining. You may now disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallQuidelOrtho Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) QuidelOrtho Earnings HeadlinesQ1 EPS Estimates for QuidelOrtho Reduced by William BlairMay 3 at 1:09 AM | americanbankingnews.comQuidelOrtho Corporation (QDEL): Among Billionaire David Harding’s Stock Picks with Huge Upside PotentialMay 1, 2025 | insidermonkey.comShocking AI play that’s beats Nvidia by a country mileYou’ve seen the headlines about Nvidia. Now Tim Sykes is sounding the alarm — because what CEO Jensen Huang is about to announce could change the AI market once again. Experts already predict the total addressable market could climb past $20 trillion. But Sykes believes most investors have missed what’s coming next. He’s tracking a new shift — and says the biggest gains are still ahead.May 6, 2025 | Timothy Sykes (Ad)QuidelOrtho to Report First Quarter 2025 Financial Results | QDEL Stock NewsApril 23, 2025 | gurufocus.comQuidelOrtho to Report First Quarter 2025 Financial ResultsApril 23, 2025 | businesswire.comJ.P. Morgan Keeps Their Sell Rating on QuidelOrtho (QDEL)April 19, 2025 | markets.businessinsider.comSee More QuidelOrtho Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like QuidelOrtho? Sign up for Earnings360's daily newsletter to receive timely earnings updates on QuidelOrtho and other key companies, straight to your email. Email Address About QuidelOrthoQuidelOrtho (NASDAQ:QDEL) provides diagnostic testing solutions. The company operates through Labs, Transfusion Medicine, Point-of-Care, and Molecular Diagnostics business units. The Labs business unit provides clinical chemistry laboratory instruments and tests that measure target chemicals in bodily fluids for the evaluation of health and the clinical management of patients; immunoassay laboratory instruments and tests, which measure proteins as they act as antigens in the spread of disease, antibodies in the immune response spurred by disease, or markers of proper organ function and health; testing products to detect and monitor disease progression across a spectrum of therapeutic areas; and specialized diagnostic solutions. The Transfusion Medicine business unit offers immunohematology instruments and tests used for blood typing to ensure patient-donor compatibility in blood transfusions; and donor screening instruments and tests used for blood and plasma screening for infectious diseases. The Point-of-Care business unit provides instruments and tests to provide rapid results across a continuum of point-of-care settings. The Molecular Diagnostics business unit offers polymerase chain reaction thermocyclers; amplification systems; and sample-to-result molecular instruments and tests for syndromic infectious disease diagnostics. The company sells its products directly to end users through a direct sales force; and through a network of distributors for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, universities, retail clinics, pharmacies, wellness screening centers, blood banks, and donor centers, as well as for individual, non-professional, and over-the-counter use. It operates in North America, Europe, the Middle East, Africa, China, and internationally. The company was incorporated in 1979 and is headquartered in San Diego, California.View QuidelOrtho ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2 Upcoming Earnings ARM (5/7/2025)AppLovin (5/7/2025)Fortinet (5/7/2025)MercadoLibre (5/7/2025)Cencora (5/7/2025)Carvana (5/7/2025)Walt Disney (5/7/2025)Emerson Electric (5/7/2025)Johnson Controls International (5/7/2025)Lloyds Banking Group (5/7/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 9 speakers on the call. Operator00:00:00to the Quidel Ortho Second Quarter 20 24 Financial Results Conference Call and Webcast. Please note this conference call is being recorded. An audio replay of the conference call will be available on the company's website shortly after this call. I would now like to turn the call over to Juliet Cunningham, Vice President of Investor Relations. Speaker 100:00:27Thank you. Good Thank you. Good afternoon, everyone, and thanks for joining the Quidel Ortho's Q2 2024 Financial Results Conference Call. With me today are Brian Blaser, President and Chief Executive Officer and Joe Buskey. This Speaker 200:00:46conference Speaker 100:00:52We've posted a supplemental presentation on the Investor Relations page that will be referenced throughout this call. This conference call contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not strictly historical, including company's expectations, plans, future performance and prospects are forward looking statements that are subject to certain risks, uncertainties, assumptions and other factors. Actual results may vary materially from those expressed or implied in these forward looking statements. Information about potential factors that could affect our actual results is available in our annual report on Form 10 ks for the 2023 fiscal year and subsequent reports filed with the SEC, including Risk Factors sections. Speaker 100:01:54Forward looking statements are made as of today, July 31, 2024, and we assume no obligation to update any forward looking statement except as required by law. In addition, today's call will include a discussion of certain non GAAP financial measures. Tables reconciling these non GAAP measures to their most directly comparable GAAP measures are available in our earnings release and the supplemental presentation, which are on the Investor Relations page of our website atquidelortho.com. Lastly, unless stated otherwise, all year over year revenue growth rates given on today's call are given on a comparable constant currency basis. And now I'd like to turn the call over to our CEO, Brian Blaser. Speaker 300:02:46Thanks, Juliet. Good afternoon, everyone. I'm pleased to be here with you to discuss our 2nd quarter results. Today, we reported 2nd quarter revenue of $637,000,000 and adjusted EBITDA of $90,000,000 which are in line with our expectations across our businesses and global geographies. Joe will cover our detailed quarterly financials later in this call, but I'd like to start by providing some observations from my nearly 90 days here at Quidel Ortho as well as outline our key priorities as we move forward. Speaker 300:03:21During times of change, it's important to take a step back and assess where we are versus where we need to be. And we began that process in earnest when I arrived in early May. And I can assure you, we are leaving no stone unturned. The leadership team and I have been reviewing every aspect of our business fundamentals and product portfolio to define our mission critical near term programs. We believe these programs will yield the highest returns in growth and profitability. Speaker 300:03:53After completing many of these reviews, it is clear to me that our value proposition is strong, our underlying business is stable and we see a clear pathway to our adjusted EBITDA margin expansion goal in the mid to high 20% range over the next 2 to 3 years. And let me provide some context and why I have confidence that we can achieve this goal. First, Quidel Ortho's broad product portfolio spans the entire continuum of care from hospital reference labs to near patient point of care testing. In vitro Diagnostics is a $48,000,000,000 industry and Quidel Ortho directly serves segments of approximately $19,000,000,000 growing at mid single digits. Our overarching mission is to improve patient outcomes in each care setting at every step of the healthcare journey and our product portfolio is uniquely suited for both centralized and decentralized testing settings. Speaker 300:04:53We serve the patient from prevention to diagnosis and in treatment to monitoring. Few companies in our space have this breadth and this is particularly exciting because of what it represents in terms of opportunity for growth and impact. Of course, most opportunities can present themselves initially as challenges and Quidel Ortho has certainly had its share of these over the last several months. In my view, our challenges are not structural to our business, rather they are mainly internal cost execution and process issues which are largely under our control. And we are taking aggressive action targeted to resolve these issues as quickly as possible. Speaker 300:05:36I see many corollaries to similar challenges I previously faced in my years in the diagnostics industry and the journey we are on today. Over the last few months, I've had the opportunity to meet with and gather insights from many key customers, suppliers, employees, investors, which have helped us align our near term priorities. And from these conversations, it is clear that our highest priority remains delivering on our customer commitments at the highest levels of quality and compliance. Then we must improve the way we run the business and our financial performance with a critical eye on consistency. And lastly, we must be steadfast in driving our product timelines and delivering on our portfolio commitments. Speaker 300:06:22Savanna is the perfect example. After multiple delays and disappointments, Savanna is admittedly late to the party. But despite being late, we see Savanna continuing to provide significant competitive advantages in the molecular point of care market both today and well into the future. A successful U. S. Speaker 300:06:43Launch of Savanna will offer incremental revenue and margin growth opportunities for us and we are committed to getting it across the finish line. Building on the Savanna instrument and HSV panel approvals in the U. S, we expect to enter clinical trials on our respiratory panel later this year. And while we won't attempt to predict regulatory timelines, our goal is to be in the market with both the respiratory panel and the SDI panel in 2025. In parallel, we are realigning our cost structure to support improved profitability and achieve durable long term growth. Speaker 300:07:18We executed on our previously announced $100,000,000 in annualized cost savings initiatives primarily through staffing reductions. We expect to realize savings of approximately $50,000,000 in the second half of this year and the remainder in the first half of twenty twenty five. And we are not stopping there. We are in the early stages of improving our overall business efficiency with initiatives in procurement, supply chain, manufacturing quality and IT. And these initiatives are expected to show incremental margin contribution in 2025 and 2026. Speaker 300:07:52I look forward to providing more details over the coming quarters as we move forward. And finally, let me reiterate that the underlying health and fundamentals of our business remain intact. We are focused on challenging every aspect of the business to improve our performance while balancing the needs to invest for future growth. Before I turn the call over to Joe, I'd like to thank our employees around the globe without whom we could not meet our goals. I realized that periods of major change including leadership changes and staffing reductions are never easy. Speaker 300:08:28However, these changes are needed to become a stronger, more efficient company that can better serve our customers and shareholders as well as be a great place for employees to work and grow their careers. And so with that, I'll hand it over to Joe. Thanks, Brian. Speaker 400:08:44Before I get into the 2nd quarter numbers, I'd like to share how great it's been for the entire management team to have Brian on board. He's led the portfolio review and deep dive into every aspect of our business to help identify areas to improve efficiency and productivity. I firmly believe the changes we are making now will enable us to become a significantly stronger company in the future. Now let's begin with details of our Q2 results on Slide 4 of the earnings presentation, which is posted on our IR website. Unless stated otherwise, all year over year revenue growth rates on today's call are provided on a comparable constant currency basis. Speaker 400:09:28During the Q2 of 2024, we performed in line with our expectations and we continue to drive business momentum. As a reminder, the Q2 is typically the seasonally lowest revenue quarter of the year for our business. Total reported revenue of $637,000,000 was driven by solid performance across all geographies. Total recurring revenue, which we define as revenues from sales of our assays, reagents, consumables and services and excludes instrument sales grew 5% in constant currency compared to the prior year period. This figure excludes COVID-nineteen and U. Speaker 400:10:11S. Donor screening revenue, which is a business we are exiting. Our non respiratory business, which includes labs, transfusion medicine and portions of point of care grew 2% in constant currency year over year. Our labs instrument revenue declined 15% due to higher instrument revenue in the prior period as we addressed the significant Labs instrument backlog last year. We saw continued strength, however, in Labs recurring revenue growth compared to the prior year period of 4%. Speaker 400:10:49After resolving the 2023 supply chain issues, Q2 2024 Instruent revenue was in line with our prior normalized levels. Within our labs installed base, integrated and auto analyzers grew 7% 16% respectively compared to the prior year period. And immunohematology revenue grew 2% compared to prior year period in line with market growth and our expectations. The respiratory side of the business had a good quarter with strong contribution from flu testing on the Sofia platform in the professional setting. In addition, our combo product exceeded 50% of our Q2 flu revenue in the U. Speaker 400:11:33S. Once again. Excluded COVID-nineteen revenue, respiratory revenue grew 18% in Q2, 2024. As a reminder, the COVID-nineteen public health emergency in the U. S. Speaker 400:11:46Ended in May of 2023, and we continue to see strong sales throughout the Q2 of 2023. COVID-nineteen revenue was $19,000,000 in Q2 of this year compared to $56,000,000 in the prior year period. And year to date COVID-nineteen revenue was approximately $70,000,000 which puts us nearly halfway to our full year forecast of 150,000,000 dollars And we continue to see good pull through of respiratory consumables into the 3rd quarter. From a regional perspective, excluding COVID-nineteen revenue, we achieved the following Q2 constant currency growth rates. 1st, North America grew 2% and recurring revenue, which excludes U. Speaker 400:12:32S. Donor screening, grew 5%, driven by consumables and our combo product on the Sofia platform. EMEA grew 2%, which is driven by higher immunohematology reagents, largely offset by lower instrument revenue. China grew 4%, which is driven by labs growth of 8%, partially offset by timing factors in other lines of business. We continue to expect high single digit growth in China for the full year. Speaker 400:13:01And finally, for Rest of World, which includes Japan, Asia Pacific and Latin America, we grew 3%. Moving down the P and L, Slide 6 shows 2nd quarter 2024 adjusted gross profit margin of 44.2% versus 45.6% in the prior year period. The 140 basis point decrease was primarily driven by lower COVID-nineteen product sales, which are high margin contributors. Non GAAP total operating expenses in the Q2 of 'twenty four compared to the prior year period were roughly flat in absolute dollars, but increased by 200 basis points as a percentage of revenue due to the higher COVID-nineteen revenue in the prior period. On a sequential basis, however, total operating expenses decreased by 13 in absolute dollars. Speaker 400:13:58And we continue to expect continued margin improvement in the second half of twenty twenty four from the cost savings actions we've taken. As Brian mentioned, we have executed $100,000,000 in annualized cost savings measures in 2024, which primarily involve staffing reductions of approximately 7% of our global workforce compared to the end of 2023. We expect the benefits from these cost saving measures to be realized in the second half of twenty twenty four and the first half of twenty twenty five. As part of our ongoing business efficiency efforts and as previously communicated, we reviewed our real estate footprint and are consolidating where it makes sense to do so. As a result, we expect to sell 2 of our facilities, 1 Marietta, New Jersey manufacturing and administrative building, which we expect to lease back and our McKellar San Diego manufacturing facility. Speaker 400:14:57These facility sales, which we expect to occur by year end, will generate cash and decrease ongoing operating costs. Due to our decision to sell these properties, we have moved these assets on our balance sheet to a line called assets held for sale. We have also recognized a non cash accounting book loss of $57,000,000 related to the sale of these two properties. This loss is primarily driven by the purchase accounting step up 2 years ago and the unfavorable San Diego commercial real estate market driven by excess capacity. Adjusted EBITDA was $90,000,000 compared to $113,000,000 in the prior year period and adjusted EBITDA margin was 14% compared to 17% in the prior period mainly due to the factors mentioned above. Speaker 400:15:48Adjusted diluted loss per share was $0.07 compared to annualized diluted EPS of $0.26 in the prior year period. Again, this year over year change was primarily due to lower COVID-nineteen revenue in 2024. Our 2nd quarter effective adjusted net income tax rate was 23%, which was consistent with the prior year and in line with our current year full year expectations. Turning now to the balance sheet on Slide 7. We finished the quarter with $107,000,000 of cash. Speaker 400:16:25As expected, given the seasonality of the business and the timing of the benefit of the cost reductions, we drew a $253,000,000 on our $800,000,000 revolver year to date. Recurring free cash flow was negative $66,000,000 as anticipated given seasonally lower second quarter revenue. And we expect cash flow generation to improve in the second half of twenty twenty four as our cost saving initiatives take up, along with seasonally higher revenue expected in Q4. We continue to expect full year recurring free cash flow generation to be positive. During the Q2 of 2024, our consolidated leverage ratio was 3.4 times, including pro form a EBITDA adjustments as permitted and defined under our credit agreement for staffing reductions, business efficiencies and integration costs. Speaker 400:17:19Based on our current expectations, we expect our consolidated leverage ratio to remain flat to current levels at year end, including the pro form a EBITDA adjustments, compared to the 4.25 maximum leverage ratio specified in the amended credit agreement. I'd also like to now address a 10 ks amendment that we will file later today. Ernst and Young, our independent auditor, underwent a regulatory inspection of their audit of Corral Ortho. In response to this inspection, Ernst and Young determined that an additional critical audit matter should have been included in the audited report filed with our 2023 10 ks. Apart from the additional paragraphs, there were no changes to the unqualified opinion in the UI auditor report or to the reported financial statements. Speaker 400:18:18Lastly, as you know, with Brian coming on board in early May, we suspended our 2024 financial guidance on our Q1 earnings call to give him an opportunity to assess the business and evaluate our plans for the rest of the year. Our Q2 performance was in line with our expectations, and this reinforces what we articulated in our February call. That is that we continue to expect to be at or slightly below the low end of our previously communicated 2024 financial guidance ranges for revenue, adjusted EBITDA and adjusted EPS. Recall that this view factored in removing U. S. Speaker 400:19:00Savanna revenue and lowering our COVID-nineteen revenue forecast to $150,000,000 for the full year. In addition, our first half twenty twenty four performance reinforces our belief that going into 2025, our business is a solid mid single digit growth company excluding COVID-nineteen U. S. Donor screening revenue. Over time, however, with the expected addition of Savanna Respiratory and CLIA waiver regulatory approvals on the U. Speaker 400:19:30S. As well as anticipated menu expansion, we believe we can achieve incremental revenue growth. As Brian said, we expect provide additional color on our margin improvement plans and milestones in the coming quarters. I would now like to ask the operator to please open up the call for questions. Operator00:19:52Thank And our first question today is from the line of Jack Meehan of Nephron Research. Please go ahead. Your line is open. Speaker 500:20:20Thank you. Good afternoon, everyone. Solid results here. For Brian, I wanted to start, you talked about no stone unturned when it comes to the margin initiatives, flagged a bunch of different opportunities. I was wondering, as you look at them relative to the $100,000,000 in terms of the staffing reduction, do you think collectively some of these other opportunities can be in that zip code, or just any relative framing for the opportunities beyond the initial cost targets you've laid out? Speaker 300:20:56Yes. Hi, Jack. Thanks for the question. As I said in my prepared remarks, we've achieved $100,000,000 in savings. We're not stopping there. Speaker 300:21:10Most of that initial round of savings was from staffing reductions. We took about a 7% staffing reduction. We're going to see somewhere in the order of 10% to 12% hitting the bottom line just because of the mix of the higher level positions there. But we're in terms of leaving no stone unturned, we're very aggressively going after additional savings in operations, supply chain, procurement, IT, really every corner of the company. And I think where we're at is we're going to continue to provide updates on the savings position as we go through the years in the coming quarters, but it is significant. Speaker 400:21:56Yes. And Jack, I would add on to that, just to reiterate what Brian said in the prepared remarks. We do believe that we will get this company to mid to high 20s adjusted EBITDA margin over the next 2 to 3 years. So, you can do the math on that and we'll obviously provide more updates as we move through the next several quarters. Operator00:22:23Thank you. Our next question today is from the line of Casey Woodring of JPMorgan. Please go ahead. Your line is now open. Speaker 600:22:31Great. Thank you for taking my questions. I just wanted to walk through the cash flow in the quarter, the negative $66,000,000 in free cash. Maybe if you could just provide some guideposts on how we should think about number for the that number for the rest of the year? I think you said you expect positive free cash in the quarter, but anything to add to that? Speaker 600:22:47And then also just on leverage, can you just elaborate on the draw in the quarter? You brought that up book at $2,600,000,000 versus last quarter. So confidence in just maintaining the leverage ratio through the rest of the year? Speaker 400:23:02Yes. Casey, it's Joe. So we had always expected that the recurring free cash flow for Q2 would be negative, primarily based on the fact that it is seasonally our lowest revenue quarter of the year typically. And the fact that the cost savings initiatives that we have executed will largely impact the second half of the year. So the draw on the revolver and the negative 66 recurring free cash flow is honestly in line with our expectations and frankly a little bit better because we did perform well in the P and L. Speaker 400:23:48CapEx was right where we expected it to be, no surprises there. And I would say the same with operating cash flow and working capital, no surprises there. We did pay down 52,000,000 dollars on the debt as provided in the credit agreement. So again, that's in line, no surprise there. We do expect in the second half that we will generate recurring free cash flow. Speaker 400:24:14I will say it's probably a little more heavily weighted into Q4, again primarily related to Q4B in our seasonally heaviest quarter for revenue typically. And I do expect us to bring down the draw amount drawn on that revolver quite a bit by year end. And I do expect that the leverage ratio will be in a relatively consistent place to where we are right now under the credit agreement with again plenty of cushion versus that 4.25 leverage ratio covenant in the credit agreement. Operator00:24:57Thank you. Our next question today is from the line of Andrew Breckman of William Blair. Please go ahead. Your line is open. Speaker 700:25:04Hi, everyone. This is Maggie on for Andrew today. Thanks for taking our questions. Maybe just to expand on the cost savings initiatives a little bit that you've talked about in the past. I think an area that you were taking a look at was R and D. Speaker 700:25:19So recognize that it still might be a little bit early here to give details on specifics. But at a high level, can you talk about the specific criteria you're going to use when looking at the spend there and just any areas of prioritization for the team? Thanks. Speaker 300:25:36Yes. So maybe I'll answer that question a little more broadly. Really what we've done is take the last couple of months that come on board to focus the business down to really 4 critical priorities. The first is, we have to operate this business to achieve the very highest level of customer satisfaction and efficiency possible. So that's job 1. Speaker 300:26:022nd is, as we've discussed going after this cost structure, to get our cost structure in line with competitive benchmarks. And then as you're discussing, we've been focusing our R and D organization down on the very critical few programs that we need to deliver and execute on really is a matter of creating, focusing and getting the job done. And that those have been in the areas of Savannah, making sure that we can get that across the finish line, menu expansion for our Poitier and our lab products and then a number of lifecycle management tasks that are critical to maintaining our on market products at a very high level of quality. And then the 4th thing is refreshing our commercial growth strategies both in the U. S. Speaker 300:26:58And outside the U. S. And so working with the commercial team there. So every area of the business we focused down including our R and D group, which has meant that we have taken some resource out of that areas of business. But I think we've really doubled down in the areas that are the most important for us in that segment of our business. Speaker 300:27:22And so if you extend Speaker 400:27:40line and the SG and A line. And again, it will be more heavily weighted in the second half. We got some benefit in Q2, small, most of it will be in the second half and first half, but it will be hitting several of those line items on the P and L. Operator00:27:56Thank you. Our next question today is from the line of Patrick Donnelly of Citi. Patrick, please go ahead. Your line is open. Speaker 200:28:04Hey, guys. Thanks for taking the questions. Maybe another one, Joe, on the margin side. I apologize for the focus here. Just when you think about the path to that mid to high 20% margins, is there a certain level of revenue that you need, particularly on the respiratory side that you guys view? Speaker 200:28:23Obviously, the incremental, decrementals there are pretty important. How do you think about just the top line profile to reach that? And again, if revenue is a little bit slower, maybe just talking about the key levers that you have there to lean on to get the margin story going? Thank you, guys. Speaker 400:28:41Hey, Patrick. Yes, thanks for the question. So every margin improvement story is typically a combination of cost reductions as well as revenue growth. It's usually not done with 1 and only 1. It is going to be a combination. Speaker 400:28:59So we are going to continue to identify efficiencies and productivity. As we've said several times on the call today, we're not done. We're going to instill a continuous improvement culture here led by Brian to find those efficiencies and productivities. But it's also about the revenue to your point. And as I said in the scripted remarks, we are a mid single digit top line growth company now with the products we have. Speaker 400:29:30We certainly have aspirations to be a higher growth company. And we believe that Savanna that once we've got the panel filled out and approved in the U. S. And we have a full launch, we believe that we can add to that mid single digit growth profile. That will certainly help us move closer to that mid to high 20 percent adjusted EBITDA margin profile for sure. Operator00:30:00Thank you. Our next question today is from the line of Andrew Cooper of Raymond James. Please go ahead. Your line is open. Speaker 800:30:08Thanks for the time. Maybe just first, Brian, now that you've dug a little bit deeper on Savanna and some of the moving parts there, would love your thoughts on sort of the menu trajectory there and then how you think about RVP for specifically relative to maybe the larger panel and how you think about the menu and building a differentiated set of assays there in the molecular space? Speaker 300:30:35Yes. Sure, Andrew. Thank you for the question. And as I said, Savanna, we know we're late to the party here with the product. But as I've looked at this product, I truly believe it's got a compelling value proposition. Speaker 300:30:52I think now and well into the future, our team is working tirelessly to get this product done and onto the market. And when you look at this product, you've got in the market, you've really got to have the right balance of workflow, turnaround time, the number of targets as well as the cost profile. And as Savanna, we think that it offers advantages over many of the systems that are on the market and will be on the market in the future there. If you look at workflow, it's truly a sample in results out platform, turnaround time less than 30 minutes. The menu and I'll discuss that more, but I think the menu when approved will be a real feature of the platform. Speaker 300:31:50And importantly, the cost of the test is positioned well below our competitors, I think. And that advantage I think will hold for some time. As you mentioned, we're on the market now with the herpes and shingles markers that were already approved. We have the RPV4 assay that is we'll be entering trials in the fall. We hope to be in the market in 2025 with that. Speaker 300:32:22Following that, we are already underway in clinicals with the STI panel, all should be able to get again without predicting regulatory timelines in 2025. And then following that, we have a GI panel for both bacterial and viral vectors and also parasites. So, we've got a nice string of content coming. We also I didn't mention we have syphilis underway for approval there as well. So a nice group of content on the platform, I think competitive differentiation. Speaker 300:33:04And although it certainly had its challenges, we're very near the finish line here and truly focused on getting across the finish line. Operator00:33:18And our next question comes from the line of Conor MacNara of RBC. Please go ahead. Your line is open. Speaker 400:33:25Hey, thanks for the time. Just quickly on guidance, do you plan on reinstating guidance for 2024? And if so, is that going to be around an event? No, I don't think, Conor, we've said previously and we can reiterate, 1st of all, that and we said this in the prepared remarks that we believe that this was a good quarter for us. Nothing happened in this quarter that would meaningfully change what we said on the last earnings call, which was we think we are still at or slightly below the low end of the guidance provided back in February for the full year. Speaker 400:34:05We are still in a suspended guidance mode though, just to be clear, to give Brian time to assess the business. And it's most likely that we will unsuspend guidance on the Q3 earnings call. Operator00:34:22Thank you. And with no further questions in the queue at this time, this will conclude the Quidel Ortho's 2nd 2024 Financial Results Conference Call and Webcast. Thank you all for joining. You may now disconnect your lines.Read morePowered by