Qiagen Q1 2025 Earnings Report

Qiagen EPS Results

• Actual EPS: $0.55
• Consensus EPS: $0.50
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $0.44

Qiagen Revenue Results

• Actual Revenue: $483.46 million
• Expected Revenue: $465.66 million
• Beat/Miss: Beat by +$17.80 million
• YoY Revenue Growth: +5.20%

Qiagen Announcement Details

• Quarter: Q1 2025
• Date: 5/7/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 9:00AM ET

Qiagen (NYSE:QGEN) NV is a holding company, which engages in the provision of Sample to Insight solutions that enable customers to gain valuable molecular insights from samples containing the building blocks of life. The company sample technologies isolate and process DNA, RNA, and proteins from blood, tissue, and other materials. The firm assay technologies make these biomolecules visible and ready for analysis. Its bioinformatics software and knowledge bases interpret data to report relevant, actionable insights. The company was founded by Detlev H. Riesner and Metin Colpan on April 29, 1996, and is headquartered in Venlo, the Netherlands.

Qiagen Q1 2025 Earnings Call Transcript

Key Takeaways

• QIAGEN exceeded its Q1 outlook with net sales of $483 million, up 7% at CER, and adjusted diluted EPS of $0.50 at CER, both ahead of guidance.
• The core portfolio showed resilience with double-digit sales growth in QIAstat Dx (+37%) and QuantiFERON (+16%), strong momentum in QIAcuity digital PCR and QIAGEN Digital Insight, and upcoming launches of three new sample prep instruments.
• The company reaffirmed its 2025 targets of ~4% net sales growth at CER (5% excluding discontinued products) and upgraded adjusted EPS guidance to $2.35 at CER based on a strong start to the year.
• Operational discipline and portfolio optimization lifted adjusted operating income margin to 29.8%, with a new goal to exceed 31% well before 2028.
• QIAGEN will introduce an annual cash dividend ($0.025/share) and seek approval for up to $500 M in share repurchases, joining the $600 M already returned since 2024.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. I'm Lisa, your PGI call operator. Welcome, and thank you for joining QIAGEN's Q1 twenty twenty five Earnings Conference Call Webcast. At this time, all participants are in a listen only mode. Please be advised that this call is being recorded at QIAGEN's request and will be made available on their Internet site.

[Operator]

The prepared remarks will be followed by a question and answer session. At this time, I'd like to introduce our host, John Gilardi, Vice President, Head of Corporate Communications at QIAGEN. Please go ahead.

[John Gilardi, Vice President & Head of Corporate Communications at Qiagen]

Thank you, operator, and welcome all of you to our call for the first quarter of twenty twenty five. We appreciate your time and interest in QIAGEN. Joining me today are Terry Bernard, our Chief Executive Officer and Roland Sackers, our Chief Financial Officer. Also joining us is Doctor. Domenico Martirana from our IR team.

[John Gilardi, Vice President & Head of Corporate Communications at Qiagen]

This call is being webcast live and will be archived in the IR section of our website. A copy of the results, press release and presentation are available on our website as well. Before we begin, I'd like to remind you that this call will include forward looking statements. Actual results may differ materially from those projected due to various factors. These are described in our most recent Form 20 F filed with the U.

[John Gilardi, Vice President & Head of Corporate Communications at Qiagen]

S. Securities and Exchange Commission. We will also refer to certain financial measures not prepared in accordance with U. S. Generally Accepted Accounting Principles or GAAP.

[John Gilardi, Vice President & Head of Corporate Communications at Qiagen]

These non GAAP measures provide insights for investors, and reconciliations to the most directly comparable GAAP figures are in our release. Please note that all references to earnings per share refer to diluted EPS. And with that, let me hand the call over to Thierry.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Thank you, Joan. Hello, and good morning, good afternoon or good evening to everyone around the world, and thank you once again for joining us. As you have read, QIAGEN delivered a very good and very solid start to 2025, once again demonstrating the resilience and strength of our business. We exceeded our outlook for both net sales and adjusted earnings even as we continue to operate in a quite complex macro environment marked by cautious customer spending and evolving global trade dynamics. Through focused execution and strong operational discipline, QIAGEN is navigating this environment and capitalizing on opportunities to deliver solid profitable growth while investing in our future.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

The performance to start 2025 reflects the differentiation of our portfolio, anchored by growth pillars, all products where QIAGEN has a leadership position in highly attractive markets. This steady progress and constant execution, now delivering for twenty two quarters in a row, give us confidence to drive sustainable long term value creation. So let me highlight our key messages for today. First, we exceeded our outlook for Q1 twenty twenty five. The full results confirm net sales of $483,000,000 rising 7% at CER compared to the first quarter of twenty twenty four.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Adjusted diluted earnings per share were $0.50 at CER again, and this was well ahead of the outlook for at least $0.50 CER. Second key message: our portfolio is performing well in a quite challenging environment. QIAstat had an outstanding quarter, driven by double digit sales growth from new panel launches and new instrument placements. We continue to build our global presence in syndromic testing for respiratory, gastrointestinal but also meningitis conditions. And we continue to advance research and development initiatives to add panels that create even more differentiation in the coming years.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Our QuantiFERON Tuberculosis test also delivered another strong quarter of double digit sales growth as we continue to drive the transition to blood based testing for TB testing from the outdated skin test. Kayakuity, our digital PCR platform, continues to build momentum in high growth fields like oncology, infectious diseases, cell and gene therapy and microbiome research. In our bioinformatics business, QIAGEN Digital Insight is extending its leadership by helping clinical and research customers unlock complex genomics data with greater speed and accuracy. And in Sample Technologies, we are preparing for a new wave of innovations and growth with the upcoming launches of important new automation instruments during the next coming months, Kia Symphony Connect, Kia Mini and Kia Street. Third message: We are reaffirming our full year 2025 outlook.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We continue to expect around 4% sales growth at CER, which is about 5% growth in our core portfolio, excluding the discontinued products like Pneumodix or Dialynox. We confirmed the upgrade of our target for adjusted earnings per share for about $2.35 at CER based on our strong start to 2025, and this is up $07 from the initial outlook for this year. As we look ahead in 2025, maintaining strategic flexibility is critical in this volatile environment. It is about adapting to challenges and sizing growth opportunity. Fourth message for today, we are expanding the range of options to increase return to our shareholders.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

At our upcoming annual general meeting in June, we will propose the introduction of an annual cash dividend. We will also seek shareholder approval for another synthetic share repurchase of up to $500,000,000 for consideration over an eighteen month period. With about 600,000,000 already returned to shareholders since 2024, those actions reflect our disciplined approach to capital allocation. So we are moving ahead on our target to return at least $1,000,000,000 to shareholders by the end of twenty twenty eight, absent of significant M and A. Finally, I would also like to mention the upcoming leadership transition in our Supervisory Board as well as the decision of two members to step down after the upcoming Annual General Meeting.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

On behalf of our leadership team and every Kaya Genas, we want to sincerely thank Larry Rosen for his dedicated service since 2013 and in particular as our Chairman of QIAGEN since 2020. This transition reflects a long planned evolution in our governance. After twelve years of valued service on our Supervisory Board, Larry is no longer classified as independent under proxy advisory guidelines. We therefore look forward to continue working closely with Steve Ruskovsky, who is intended to be elected by the world as our new chairman after the general assembly. Steve, as you all know, brings extensive global healthcare leadership experience to QIAGEN and that will support our ambitions in the years ahead.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We would also like to thank Helene Mardis, who also decided not to stand for re election. Helene provided tremendous scientific insight and deep expertise as a member of the board since 2014. With that, we are back to eight supervisory board members, a composition consistent with historical levels at QIAGEN. So to give you a quick summary, all of these elements, a great portfolio, a strong execution combined with expanded opportunities for shareholders' returns and development in our leaderships, helped position QIAGEN to make important progress in 2025 towards delivering on our '28 ambitions. With that, I now would like to hand the call over to Roland to provide some more details on our financial results.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Thank you, Thierry, and hello, everyone. We are pleased with the start to 2025 and see opportunities to deliver very strong results. Let me provide some highlights from the quarter. First, we delivered a significant improvement in profitability. Our adjusted operating income margin rose to 29.8% of sales, up more than four percentage points from the first quarter of 24%.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We are very encouraged by the key drivers of this margin expansion. They included a favorable shift towards consumables and bioinformatics solutions. We are also seeing benefits from portfolio optimization actions, in particular, the phase out of Neuromodi X, and this is on track for completion in mid-twenty five. Another point we are seeing is an even higher level of discipline across QIAGEN in managing our cost base, and the recent evolution of our organization was a key trigger for this. The broad progress is enabling us to invest in targeted areas like R and D, in line with our target for about 9% to 10% of sales.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And we are steadily driving the digitization of our commercial channels to enhance customer engagement. In light of this strong progress and the fact that we continue to see momentum and an opportunity for growth, we are reviewing our target for an adjusted operating income margin of at least 31%, well ahead of the original time line for 'twenty eight. This represents well over 300 basis points of margin improvements since 'twenty three. Let me now walk through some of the additional details on our performance. Among our product groups, Diagnostic Solutions sales rose 11% at constant exchange rates, driven by another strong quarter from QIAstat Dx sales rising 37% and QuantiFERON sales up 16%.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

PCR technologies delivered 14% CER growth, led by rising adoption of the ChiAcuity digital PCR system and very strong growth in consumables. Also supporting the performance were higher sales of other products used in non regulated PCR applications, including our OEM business. Sample Technologies sales were down 1% CER, reflecting lower instrument sales amid cautious customer spending. At the same time, we saw good trends for automation consumables in key regions, in particular, high single digit growth in the EMEA region and also higher sales in the Asia Pacific region outside of China. In genomics and next generation sequencing, sales were down 2% at CER compared to the first quarter of 'twenty four.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

This reflected lower demand for some NGS consumables and services during the quarter. However, we saw high single digit CER growth from QIAGEN Digital Insights as both our discovery and clinical portfolios delivered strong performance. The positive momentum in QDI is an encouraging signal as we work through the transition to SaaS subscription models from longer term licensing agreements, particularly with pharma customers. Turning to regional performance. The Americas grew 9% at constant exchange rates, supported by strong performance in The U.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

S, Canada and Latin America. The EMEA region delivered 8% growth at CER, reflecting broad based contribution across key markets. The top performing countries included Germany and Italy as well as The Middle East. Asia Pacific experienced a modest decline, primarily driven by ongoing weak trends in China, a country that only represents about 3% to 4% of total sales, but still saw a high teens CER decline over the same period in 'twenty four. This overshadowed expansion in other countries, in particular, solid single digit growth in Japan.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Turning to cash flow. We generated $140,000,000 in operating cash flow during the first quarter compared to $133,000,000 in the first quarter of 'twenty four. The results were even stronger given that the 'twenty five results included about $19,000,000 of cash payments for the efficiency initiatives. Free cash flow was $96,000,000 reflecting planned investments into targeted digital transformation initiatives. This includes the upgrade of our SAP system that is moving into the implementation phase this year.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We continue to see improvements in working capital management based on solid operational control. As an example, we saw another improvement in accounts receivable as the days of sales outstanding stood at fifty five days in the first quarter compared to fifty eight days in the year ago period. Inventory days also improved to one hundred and seventy five days for the first quarter of twenty twenty five compared to two twenty one days in the same period of 2024 as we continue to closely monitor supply chain trends in this environment to ensure adequate customer product availability. In terms of capital allocation, as noted in our earnings release, we are proposing to introduce a cash dividend to provide a new avenue for increased shareholder returns while preserving flexibility to reinvest in long term growth. The initial annual dividend payment would be USD $0.02 5 per ordinary share.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We also seek shareholder approval for our new share repurchase authorization. This is complemented by our teams reviewing opportunities for value creating M and A that strengthen our portfolio and will create new opportunities to enhance our growth profile. In essence, our strong financial position gives us the possibility to invest in strategic initiatives for future growth while expanding our range of ways to increase returns to shareholders. With that, let me hand the call back to Thierry. Thanks a lot, Roland.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And let's now look at the progress across our product portfolio, starting, of course, with Sample Technologies. As you have probably read, we are preparing for the next wave of automation with the planned launch of three new instruments at QIAGEN, QIA Symphony Connect, QIA Mini and Kaya Sprint Connect. First, Kaya Symphony Connect is our next generation flagship system, and this is set for a phased launch starting February. QIAsymphony Connect combines enhanced automation, digital connectivity and expanded application flexibility, for example, for liquid biopsy customers. In 2026, we plan to introduce Kaya Mini to serve low throughput labs and Kaya Spring Connect to address high throughput demands with up to 600 samples per day.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Early access users have already shown very strong interest for those solutions. Together, those innovations will strengthen and expand our leadership in automated sample preparation by offering comprehensive and scalable solution to meet customer needs. In terms of supporting public health and once again in sample tech, we recently launched the Kaya Prep and M Plasmodium Kit. This uses our proven liquid based sample prep method as a new way to help research and surveillance of this global health threat, especially in areas with limited health care infrastructure. Second, turning to QuantiFERON, our market leading blood based test for latent tuberculosis detection.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

QIAGEN remains very confident in our ambition to reach at least 600,000,000 sales by 2028 for QuantiFERON. We have continuously improved and invested in QuantiFERON development, which is now in its fourth generation. We are obviously not stopping here, and we are already preparing the fifth generation version. The fifth generation version of QuantiFERON will bring further improvements in automation, throughput and workflow efficiency. Over time, we believe there is a clear opportunity to continue to increase conversion well beyond the current 40 level in the market for the time being.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Third, QIAstat Diagnostic, our syndromic testing platform that continues to expand its American presence. Earlier this year, we received FDA clearance for the second QIAstat GI mini panel, gastrointestinal, targeting five key bacterial pathogens. Designed for outpatient care, this panel complements the previously cleared bacterial and viral versions, providing fast results with very minimal hands on time. Our portfolio for QIAstat now includes all three major American syndromic panels respiratory, gastrointestinal and meningitis. And we have, on top of that, in The US, Three mini panels tailored to outpatient testing.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

With those options, QIAstat is very well positioned to meet rising demand for flexible and rapid syndromic testing for both hospital but also outpatient settings. Moving to Kayakuity now, our digital PCR platform that continues to deliver innovation but also market shares and growth. We started 2025 with a major and significant upgrade. Calla Quitty now supports the simultaneous detection of up to 12 targets from a single biological sample, more than double the capacity we had before. This expanded multiplexing capability is helping researchers across applications like translational research, microbiome analysis, pathogens detections and the development of cell and gene therapies.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

By saving time, reagents and precious sample material, CallaQuiti is making laboratory workflows more productive and cost efficient, and it definitely strengthens our position into the digital PCR market. We are also on track to launch at least another 100 new assays in 2025, building on an already strong portfolio expansion in 2024 that has been contributor obviously to the strong uptake and growth in consumables. As part of this new wave of assays, our teams recently launched the first new cell and gene therapy assays of the year, including our first assay dedicated to lentivirus applications. This is really a very strong start to our '25 menu expansion. This definitely helps strengthen our installed base, broadens use cases as well as customer reach and supports our competitive market shares in digital PCR.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Closing with QIAGEN Digital Insight, our bioinformatics business that continued to strengthen its global reach. As you have seen, we recently opened a new data center in Melbourne, Australia, expanding our secure cloud infrastructure to eight global sites. This investment enhances our presence in the regions by enabling compliance with local regulation and also advancing clinical next generation sequencing adoptions. So as you can see, with those efforts, QDI, QIAGEN Digital Insight, is well positioned to continue to support the growing demand for bioinformatics solutions in both research and clinical settings. And now once again, back to Roland with the details on our outlook.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Thank you, Thierry. Let me now provide some more perspectives on our outlook for 2025 and the second quarter. Our ambition remains clear: to deliver another year of solid profitable growth and continued improvement in operational profitability. For the full year, we are reaffirming our outlook for net sales growth in 2025 of about 4% at CER. This reflects about 5% CER growth from our core portfolio that excludes the discontinued NeumoDx and DynaLunox products.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Given the current volatility, we remain conservative about the revenue growth for the second half of the year but could well increase our net sales guidance once we have more visibility on the macro trends. On adjusted earnings per share, we are reaffirming the recently upgraded target for about $2.35 at constant exchange rates. This reflects about 8% CER growth compared to 'twenty four, supported by operational margin expansion while also accounting for the current tariff environment and a better than expected adjusted tax rate versus the beginning of twenty twenty five. For the second quarter of twenty twenty five, we are targeting net sales growth of at least 5% at constant exchange rates. This translates to at least 5% CER growth in our core portfolio, excluding discontinued Neumode X and DiaLunox products.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Adjusted earnings per share are expected to be at least €0.60 up from results of €0.55 in the year ago period and another solid improvement. Turning briefly to currency trends. These have improved since the start of the year, and we now expect less headwind given the current U. S. Dollar trends against the euro and other key currencies.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

For the full year, we now expect currency movements to be neutral on net sales and a negative impact of about $01 to $02 on adjusted earnings per share, so slightly better than the assumption from the start of the year. For the second quarter, we anticipate a positive impact on net sales of about one percentage point and neutral currency movements on adjusted earnings per share. Overall, our guidance reflects a balanced view of both the opportunities and challenges in today's macroeconomic environment. Our results for the first quarter and the latest reviews with our teams give us confidence in our strategy, our execution and our ability to deliver on these targets. I would like to now hand back to Terje.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Thanks a lot, Roland, Domenica and John. And as usual, to all respectful of your time. So let me very quickly summarize before we move to the Q and A part. First, we delivered a very good and solid start to 2025, exceeding our outlook for both net sales and adjusting earnings in the first quarter. Our highly recurring revenues account for about 90% of our total sales and are a key foundation for growth, even in this macro environment where customer spending remains cautious.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We were especially very pleased with the strong contribution from QIAstat and from QuantiFERON and the momentum gained in QIAQuiti together with the robust performance of QIAGEN Digital Insight. Those successes, along with our efficiency initiatives, drove a significant improvement in our adjusted operating income margin and supported another quarter of very strong cash flow generation. We have reaffirmed our recently upgraded target for adjusted earnings and also reaffirmed our full year 25 targets for net sales. This is combined with our commitment for further significant margin expansion as we move above 30% this year. And our financial strength and operational flexibility gives us increasing conviction in our ability to deliver on our 2028 commitments for solid profitable growth and stronger shareholders' return.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

That said, back to John and the operator for the Q and A session. Thank you.

[Operator]

Ladies and gentlemen, at this time, we will begin the question and answer Anyone who wishes to ask a question may press star followed by one on their touch tone telephone. If you wish to withdraw your question, you may press star followed by 2. To ensure we can accommodate as many people as possible, please limit yourself to only one question and if necessary, one follow-up. Your microphone will also be muted after you finish asking your questions. Anyone who has a question may press star followed by one at this time.

[Operator]

One moment for the first question, please. The first question comes from Dan Leonard of UBS. Please go ahead, Mr. Leonard.

[Dan Leonard, Managing Director & Research Analyst at UBS Group]

Thank you very much. I'll keep it to one. Was hoping you could elaborate a bit further on what drove the acceleration in QuantiFERON in the quarter. I know you mentioned skin test conversion, but that's a trend that's been underway for a couple of decades. So perhaps there's some additional color on the quarter performance specifically.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Thanks a lot, Dan. And no, there is no specific event. It's just a confirmation of our strategy, strategy based on constant innovations. As we said today, we are at the fourth generation of products. We definitely have proven reliability and quality.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

You have seen in our recent deep dive on QuantiFERON the number of citations, the number of publications. Second, the value of our partnership for automation with not only DiaSorin but also TICAN Hamilton. And all this together reinforces the continuous global performance of QuantiFERON. And I insist on global, it is growing all over the world in North America, Europe, Middle East, Asia Pacific.

[Dan Leonard, Managing Director & Research Analyst at UBS Group]

Thanks, Terry.

[Operator]

The next question comes from Doug Schenkel of Wolfe Research. Please go ahead, Mr. Schenkel.

[Doug Schenkel, Managing Director at Wolfe Research LLC]

Hi. Good morning, good afternoon, everybody, and thank you for taking the questions. So just a couple on guidance. Given Q1 strength and given how you're guiding q two, our math suggest that, you know, essentially, you're assuming a deceleration in top line growth to around 4% in the second half. I I definitely could be doing the math wrong, but if if I'm not, I just wanna see if there's, you know, something you're seeing that's moderating from a growth standpoint.

[Doug Schenkel, Managing Director at Wolfe Research LLC]

It doesn't sound like that's the case. So you're really cutting through all of this. Is this just prudent conservatism in the current environment? So that that's the first question. And then the second is, you know, again, on guidance, you're maintaining your 4% constant currency outlook for the full year at the top line, You know, recognizing how the environment has changed over the last, you know, few weeks and few months, are there specific areas that we should be thinking of that are doing better than original plan?

[Doug Schenkel, Managing Director at Wolfe Research LLC]

And then, you know, if so, what are the offsets? Thank thank you very much.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

So, Doug, thanks a lot. You you call that conservatism. I I would I would call it realistic ambitions. Your math is not necessarily wrong, but you have also seen that the volatility in our economic environment or geopolitical environment has not improved, not at all. So we are still living in a kind of and operating in a shaky environment.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And this is why we prefer to remain prudent. But obviously, as soon as we have more visibility, we will not hesitate to upgrade and update our top line also guidance. But we need to have more weeks of visibility behind us before doing this. And so on the guidance for 4%, which is 5% excluding Dialynox and PneumoDx divestment, base that guidance taking into account that volatility, taking into account and weathering the current discussions or debates around tariffs in the world, for example, at the same time factoring the still cautious environment on spending especially for capital sales, factoring also the discussion around research funding in different countries of the world, but also leveraging the very good start of QuantiFERON, of QIAstat, of QDI and the good performance of QIAQuiti in consumables.

[Operator]

The next question comes from Patrick Donnelly with Citi.

[Patrick Donnelly, Managing Director, Equity Research Analyst at Citi]

Hey, guys. Thank you for taking the questions. Maybe one just on the tariff exposure probably for Roland. Can you just run through what you're seeing on that front? Any mitigations?

[Patrick Donnelly, Managing Director, Equity Research Analyst at Citi]

We've heard from some others, maybe some of the diagnostic reagents are more on the exempt side China. I know you guys don't have a ton of exposure there. But can you just talk through what you're seeing on that front and what the impact could be?

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Yes. Patrick, I think overall, just to put things in perspective, as you know, it's clearly a very volatile environment, and I'm quite sure there will be more changes. And by the way, that is one of the points to you just raised, that there is nothing company specific which will change the direction. Right now, we really are a bit more conservative right now in terms of the outlook for the year. Same is true here on the tariff side.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

We feel actually that we were well prepared moving into that year. As you know, we ramped up quite early our inventory levels. We reviewed our supply chain and waste. We clearly looked on also a couple of company processes, all of that, which I think allowed us to, I guess, mitigate most of these impacts, which we are now seeing. There's clearly also the benefit that we are working closely with our customers in sharing some of these impacts.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

At the same time, I think it's also very fair to say that we see right now also a somewhat lower tax environment in general, which is helping us not only to compensate, but as you have seen with our guidance, increase on the EPS side, even overcompensating for the impacts we see on the tariff side. Have in mind that we do not have anything material from China into The U. S. That is nothing what is important for us. As you know, from The U.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

S. Into China right now, in general, that is something what is not really material. And therefore, I would say, for us, it is really something what we were so far very well able to manage, which is U. S. To Europe Europe to Europe, sorry.

[Patrick Donnelly, Managing Director, Equity Research Analyst at Citi]

Yes. Yes, that's helpful, Roland. And then maybe a quick one just on the margin levers for this year. The expansion has been pretty healthy. Can you just talk about the levers as you work your way through the year on the margins, just the puts and takes?

[Patrick Donnelly, Managing Director, Equity Research Analyst at Citi]

And again, how we should think about the progression as the year goes?

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Yes. Thanks for that question because I think it allows me also to reemphasize one important message. As you know, we on the one hand side, we said before that we discontinued NovoDX, in particular, last year, but this only accounts for somewhere around 40% to 45% of the overall margin improvement. I think Thierry, in one of the earlier calls, alluded to that we have actually ongoing, what we call, kaia, kaia gene efficiency programs, and they are actually adding up quite nicely. That goes all the way from digitization initiatives.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

As you know, we also, to a certain extent, reorganized the company end of last year. And this all is helping actually quite nicely to improve margins. So we expect also, clearly, for this year to end up north of 30. And again, outside any larger, whatever, tariff macro impacts, which might or might not happen. But in that environment which we're seeing right now, I think we feel very confident that we stay north of 30% and clearly expanding from that level also going forward.

[Operator]

Our next question comes from Tycho Peterson of Jefferies. Please go ahead, Mr. Peterson.

[Tycho Peterson, Managing Director at Jefferies Financial Group]

Thanks. I want to probe on some of the other guidance assumptions. Academic and government's obviously been a pressure point. We've seen most of your peers kind of recalibrate expectations for the year. Just curious what you guys are baking in for U.

[Tycho Peterson, Managing Director at Jefferies Financial Group]

S. Academic and government for the rest of the year. And then instrument, you know, softness, curious if you're assuming, you know, any stabilization or recovery on instruments in particular for QA acuity. And then Roland, you kind of alluded to, you know, maybe potential drivers of upside in the back half of the year. Curious where you think that could come from.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

So thanks, Tycho. I mean, so first of all, as you know, 90% of our revenues are coming from consumables. So I believe, therefore, that with this, we are probably a bit less exposed to huge cuts in academia and research. But, obviously, like any company involved in research and academia testing, we feel that there is a slow environment and we remain cautious. That drives, by the way, when I answered the questions from Doug, why we continue to maintain our guidance.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

It's just being cautious because the environment is not moving that fast. That being said, I believe that we are a bit more protected. And I believe also that most of our sales in research and academia are still mainly around sample tech and those are expenses that are very difficult to completely eliminate. For capital sales, our assumption continues to be that we should see a level of normalisation in the second half of the year or early twenty twenty six. Obviously, it's very difficult to predict that.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We continue to say that there is a normal cycle of renewal in instruments in labs. It's very difficult to say exactly or to know when it's going to happen, but we believe it has to normalize at a certain point in the coming months. Roland, do you want to take the second part of the question?

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Yes. Again, just to add on that.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

On the instrumentation side, of course, have in mind also that most of our instruments clearly have price points, which are probably for instruments on the lower side. So that's clearly also helpful. And you see particular QIAstat and also QWERTY doing quite well. And again, I don't see any reason that, that should change over the course of the year. In general of upsides, I think you have seen where we started very well and strong into the year from QIAstat to where, again, what is really driving that is the menu expansion.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

As you know, we got a significant number of products approved last year through the FDA, and that clearly helps us not only in The U. S, where gastro and meningitis, to expand on that, the larger instruments going online. So there's a lot of things being helpful. We added menu quite nicely to the QT. You know that we added 100 panels last year.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

We're going to add another 100 panels this year. Therefore, the consumer pull through continues to be quite strong. So I would say it's a mix of new launches and clearly also what we believe that's a focus, which I think QIAGEN now is driving since quite some time, still pays off.

[Operator]

And our next question comes from Michael Ryskin, Bank of America.

[Michael Ryskin, Managing Director at Bank of America Merrill Lynch]

Great. Thanks for taking the question. I think Tycho touched on NIH or sorry, I think one of the earlier questions touched on NIH and government policy. I want to talk a little bit about the pharma biotech end market, what you're seeing there. I think it's been a little bit weaker to start the year.

[Michael Ryskin, Managing Director at Bank of America Merrill Lynch]

Obviously, there's still a lot of noise, and there's potential for more noise, from from ongoing discussions or from pharma specific tariffs. Just curious if you're seeing anything different in budgets relative to how you were going into the year. And I'll I'll throw on my second one at the same time, the capital deployment front, you know, the initiation of the dividend, a little bit more color on the on the buybacks. Just curious how you're going to balance capital allocation priorities between those two and M and A going forward. Just give us tiering.

[Michael Ryskin, Managing Director at Bank of America Merrill Lynch]

Thanks.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Those are good questions, Michael. Thanks a lot. On the pharma side, I would say on direct testing sales, we are pleased with the performance of especially solutions like Kayakuity on the pharma side. This is where we get the the best pull through. On our large throughput kayaquity system, we call it the eight plate system.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

So we don't see any specific downgrading of the situation here. What I would say, what we believe is encouraging is that we see a growing appetite, again, of pharma company for companion diagnostic. And you see that this is a good activity for QIAGEN. This is where we are probably the leader in the world. We are the only company offering pharma companies with solution not only on PCR companion diagnostic but also NGS companion diagnostic and also digital PCR.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And you have seen recently also that we have opened contracts on QIAstat. So we see a pretty good demand here and we are pretty confident that this should continue. On capital allocation, we continue to try to optimize the management of our healthy balance sheets. As you know, we have three priorities. First of all, investing into our organic growth, which is R and D.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

QIAGEN maintains a healthy investment on R and D ratio to sales. It's around 9% to 10%. It's a good ratio. But we always need to make sure that, that ratio is paying off and that we have good return factors from those research and development investment. Second, the new announcement of share buybacks are just proving our active listening to investors and to analysts.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Many of you have been telling us for the last years that dividends could open up our stock price to a different kind of investors, we listened. We took our time and we decided to come with that policy. And we perfectly understand that it's a long term policy as well. And the increase to up to 500, it's an authorization. That doesn't mean that it's going to happen under a given date.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We said that we have eighteen months to deploy that. But it's also that confirm vision and willingness to return the appropriate level of capital to our shareholders. They deserve that. And we believe also in our company. Third, it's M and A.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

It's not one against the other or it's not that M and A is going to become less of a priority. We believe in M and A to create value. It has to be synergistic with our current portfolio. We mainly focus on what we say bolt on or what we call bolt on. And I would invite you to stay tuned because we have a very, very good pipeline, and I think we are in a position potentially to close some of those M and A in the coming weeks.

[Operator]

And our next question comes from Jan Koch with Deutsche Bank.

[Jan Koch, VP - Equity Research at Deutsche Bank]

My

[Jan Koch, VP - Equity Research at Deutsche Bank]

first question is on sample pack. What kind of growth should we assume over the coming quarters given that the comps are actually getting a bit tougher? And do you expect a catch up in instrument sales once you have launched the new instruments driven by pent up demand? And then secondly, on QuantiFERON, could you remind us of the market potential you are seeing in China? Given that China is not really a focus market for your partner, do you believe that the installed base of instruments in China is sufficient, to grab that market opportunity once you receive the necessary approval.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Thanks a lot, Jan. On sample tech, this is a strategy, but let me highlight something. What the current numbers are not really showing is that where we have decided to clearly put the research and development efforts in what we call high value sample take applications like liquid biopsy, minimal residual diseases, microbiome research. We are growing and we are in some of those fields growing at double digit and this is exactly where we want to go. Second, to your point, obviously there is no other competitor in Sample Tech with such a program of investment into new systems.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And it's not new. It has started three years ago when we started to upgrade Kayakube with Kayakube Connect, Is it one to Is it two? And now we have those three launches. So all this together makes us believe that the guidance that we gave you in New York during our Capital Market Day last year in June to come back to a growth of around three percent per year is really achievable. To QuantiFERON in China, honestly, at the moment QuantiFERON in China is the leading blood based test for latent TB.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

We have many competitors that are very local, are not elsewhere but in China. It is not our top priority. We will bring the workflow of automation with DiaSorin to the regulatory authorities, but the growth of QuantiFERON absolutely does not depend on the performance in China. I would not qualify China as a priority for QuantiFERON. It's a market We are using all our presence, including with DiaSorin, to continue to take market shares, but this is how we would see it.

[Operator]

And our next question comes from Jack Meehan with Nephron Research. Please go ahead, Jack. Your line is open.

[Jack Meehan, Equity Research Analyst at Nephron Research LLC]

Thank you. Hello, everyone. I wanted to ask about the PCR strength in the quarter through two lenses. First was, if you look the 14% growth, QIAcuity, high single digits, it implies everything else grew in the high teens. So I was just wondering if you could talk about you know, why that was so strong.

[Jack Meehan, Equity Research Analyst at Nephron Research LLC]

And then on QIAcuity, it does it seems like things are going well on the consumable side, but it does also feel like that prior hundred and $5,000,000 target might be a little bit of a stretch given the instrument environment. I was just curious if you had any updated thoughts on that too. Thank

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

you, Jack. And so on the first question, first of all, especially if you compare with what has been disclosed by some competitors, I mean, we are growing in digital PCR. We continue to sell or to place instruments. Obviously, given the environment on capital expenses, of course, we would like to be able to place more, but we still grow and we are posting, as you said yourself, a very nice growth in consumables. So we are definitely taking market shares.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And you have seen from other disclosures that it's not necessarily the case elsewhere. So on the rest of the PCR portfolio, what was quite interesting and encouraging this quarter was the performance of our OEM sales. And you remember that this is also an activity of QIAGEN where we have always said it's difficult sometimes to plan for a growth on a quarterly basis because those are mainly bulk sales. So you have sometimes high quarters, lower quarter, the quarter after. So overall, OEM for us is on a yearly basis roughly $80,000,000 activities, but it performed very well in Q1.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

So now addressing your is this a stretch or is there a stretch on Kayakuity? For sure, we acknowledge that the capital sales environment, especially in research lab of academia, is not helping. But honestly, Jack, I mean, this solution, Kayakuity, is taking market share. It has been probably the fastest growing installed base ever in diagnostic and life science. We continue to grow in consumables, as Roland said.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

As we said during this call, I don't judge the efficient I will not judge the efficiency of that solution just on a year let alone on a quarterly basis. We confirm what we told you. We are on our way to get above $200,000,000 by 2028, and this solution deserves to be the number one on the market on digital PCR. And we confirm that ambition.

[Operator]

The next question comes from Dan Brennan with TD Cowen. Great.

[Daniel Brennan, Managing Director at TD Cowen]

Maybe

[Daniel Brennan, Managing Director at TD Cowen]

one for Roland and then for Thierry. Just, Roland, just back on the tariff math, if you could, did you guys ever size what the gross impact is? Obviously, you're doing a terrific job offsetting a bit, but I'd be interested to see just what that impact is on the gross side and if between cost actions and moving production and suppliers, anything you can share on kinda how you're offsetting that? Just a little more detail since it is such a topic. And then, b, Terry, for you, on m and a and a prior question, did I hear you say something about the next couple of weeks?

[Daniel Brennan, Managing Director at TD Cowen]

Like, is there something can you just discuss what the pipeline looks like there? And then just finally, kind of what are you guys assuming for the rest of the year for QIAstat after the really strong quarter in the first quarter?

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Why don't you want to take the first part?

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Yes. Thank you then. Yes, to be honest, I wish I could because the reason why I think it's not as easy for us is because we started actually already quite early last year with some of the mitigation actions. As I said, we changed quite a of internal procedures.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

We really ramped up inventories. And therefore, it is not actually to set a baseline. But I think what is fair to say that our assumption right now is probably that it's would be probably $00 EPS for the period. Nevertheless, as I said, there's clearly an area which we were able to offset so far. So I would say we feel comfortable that, that is in that given environment, something that we can cover quite nicely, and then we have to see where it moves.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

But I would say, so far, we feel quite comfortable. We're still looking into that if there's other areas where we can improve. Again, a big impact for us is clearly also that we are actively working with our customers and explain to them the actual situation.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Thank you, Roland. And to follow-up on the question on M and A, what I confirm is that it's clearly one of the top priorities of our capital allocation.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

As you know, we have a very healthy balance sheet. We have a very long lasting experience of M and A, especially bolt on. And I just can tell you that our pipeline is very solid. We are engaged in very discussions that are coming to now, I hope, closing. But as you can imagine, it always takes two to tango.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And as long as the signature is not done, I don't say anything. But yes, I confirm that in the coming weeks, we should be in a position to communicate on some of those. That's the first one. On QIAstat, obviously, as you know, this winter has been another once again a quite strong respiratory season. We have been able to answer customer needs here.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

But our growth is not just respiratory, all the parameters, GIs and meningitis. So let me put it like this. It's a strong start, and so we confirm our guidance for QIAstat, and we believe that it will be double digit at the end of the year once again.

[Operator]

And the next question comes from Catherine Schulte with Baird. Please go ahead, miss Schulte.

[Catherine Schulte, Senior Research Analyst at Robert W. Baird & Co]

Hey, guys. Thanks for the questions. Maybe first on China. I know a small part of your business, but seeing some decent declines there. I guess what does that look like on the diagnostic side versus life sciences?

[Catherine Schulte, Senior Research Analyst at Robert W. Baird & Co]

I'd just be curious if there are any different trends between those two buckets. And my second question would be on QDI. Can you just talk about what you're seeing there? I think you said you grew high single digits in the quarter, and you're expecting 15% in that longer term outlook at your Investor Day. So just curious if you're still confident on that side.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

So thanks, Catherine, for the question. I mean, on China, I think there is no specific change to what we come saying in the last three years. China is too big of a market to be ignored, and at the same time, it's too specific and too complex of a market and too risky of a market those days to make it a priority. It's a very limited percentage of our sales. Roland spoke about that.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

At the moment, it's at 4%. The market is very specific in the sense that they favor local manufacturing, and they will always favor local manufacturers. It does impact not only life science but also diagnostic solutions. But as far as QIAGENE is concerned, we continue to grow in QuantiFERON every quarter. We have more difficulties and we are more impacted by that context that I described on life science and other activities.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

That's the way to see it. Again, too large of a market to be ignored, too complex, too risky to make it a priority. QDI, what we are pleased with in Q1, and we communicated that, if you remember in the deep dive we organized in December, this leading position from QIAGEN, I remind you that at around $100,000,000 we are the leader on the market, not only the leader, but we are also a profitable leader, unlike competition, is moving is evolving to a SaaS business model. And we took we said in December that it will take probably a year. We start to see that normalisation already in Q1.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

What we were pleased with in Q1 is that both activities of QDI, as Roland said, not only clinical but also discovery, were doing better than Q4 and Q3 of last year. So this is encouraging. Now for the ambition for this year, I would put it as a high single digit. That's our objective, and this is what we want to deliver. And I continue to believe that the full normalisation and transition to that SaaS business model will happen throughout 2025.

[Operator]

And we'll move to our next question from Matt Sykes with Goldman Sachs. Please go ahead, Mr. Sykes.

[Matthew Sykes, Analyst at Goldman Sachs]

Thank you. Good morning. Thanks for taking my questions. I'll leave it to one. Just wanted to focus on Sample Tech.

[Matthew Sykes, Analyst at Goldman Sachs]

You guys have talked about a pretty clearly articulated strategy to improve growth in that area through the launching of the automated instruments, and you've given us a time line. I guess my question is, given that timeline, and given sort of the CapEx constraints that are currently in the environment from the customer side, do you feel that the value proposition, the cost savings or higher throughput that you're offering through this automation will help penetrate through maybe a sustained weaker capital equipment environment so you could still see that acceleration in Sample Tech as we move through '26?

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

Well, Matt, we believe so. This is our assumption because none of those systems are me too. They all comes with innovation, and this is visible to customers. When I said about QIAsymphony and our customers in liquid biopsy, this is the feedback at the moment. I said that QIASPRINT was already highly regarded by some major pharma potential partners.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

This is encouraging. Why? Because they bring innovation in cost saving, in time to result, in easy to use handling. So we believe that this will help us despite the constrained environment to bring them to customers and get those contracts. Obviously, if capital expense remains very low, we might see some delays around May.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

But over the long run, our ambition for '28 remains unchanged because those are instruments that are bringing value and differentiation.

[Matthew Sykes, Analyst at Goldman Sachs]

Thank you.

[Operator]

And our last question comes from Casey Woodring with JPMorgan. Please go ahead, Mr. Woodring.

[Casey Woodring, Vice President - Equity Research at J.P. Morgan]

Great. Thanks for fitting me in, guys. Roland, you mentioned expecting to reach your 31% midterm margin goal well ahead of 2028. Does that well ahead mean 2026 or '27? And I guess what are the variables that would get you there in '26 versus '27?

[Casey Woodring, Vice President - Equity Research at J.P. Morgan]

And then on companion diagnostics, you said that the partnership revenue there grew double digits in the quarter. Can you just give us a sense as to what you're expecting from a revenue perspective from the Companion Diagnostics partnership revenue, how that's growing, and then how to think about that opportunity moving forward?

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

Hi, Kathy. I think we had so many news today that I want to keep something for probably later into the year. So again, we will update that number, as we said, at a given point when we also feel that we were well on our way with our planning for 2026. Again, for me, there's no question that we're going to reach it. For me, there's no question that's going to reach earlier.

[Roland Sackers, CFO, MD & Member of Management Board at Qiagen]

But we also want to give you the right magnitude because we probably have to update not only the 26% number but also the 28% ambition. So give us a bit time. And as always, once you feel ready, we will go out.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And to your question on CDx, on companion diagnostic, we see a potential, and we have always disclosed the same, of double digit. Those products are bringing value to pharma.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

You know that we have probably the most extended network of pharma contracts in the market. We have more than 35 main contracts with pharma. And what is very interesting is that we keep adding solutions. Four years ago, five years ago, QIAGEN companion diagnostic was mainly PCR. And then we added NGS capabilities.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And then more recently we added digital PCR, and then last year as you have seen, we added syndromic capabilities. So it's healthy. It's a very good window for our technology as well. As you know also, we have signed a network of what we call day one laboratory contract because what is the key of companion diagnostic, Casey, is that any time the drug is available, you need to make sure that the test is available at the same time. So we have a network of partners, labs all over the world that make sure that as soon as the drug hits the market, we are ready to test the patient as well.

[Thierry Bernard, CEO, MD & Member of Management Board at Qiagen]

And this is why that we believe that the double digit growth for this business is perfectly achievable.

[John Gilardi, Vice President & Head of Corporate Communications at Qiagen]

Okay. Terry and Roland, thank you very much, and thank you for all of you for joining our call. Let me close it here. If you have any questions or comments, please don't hesitate to reach out to Dominic and me. Thank you very much.

[John Gilardi, Vice President & Head of Corporate Communications at Qiagen]

Bye bye.

[Operator]

And ladies and gentlemen, this concludes today's conference call. Thank you for joining, and have a pleasant day. Goodbye.

Participants

Executives

• John Gilardi, Vice President & Head of Corporate Communications
• Thierry Bernard, CEO, MD & Member of Management Board
• Roland Sackers, CFO, MD & Member of Management Board

Analysts

• Dan Leonard, Managing Director & Research Analyst at UBS Group
• Doug Schenkel, Managing Director at Wolfe Research LLC
• Patrick Donnelly, Managing Director, Equity Research Analyst at Citi
• Tycho Peterson, Managing Director at Jefferies Financial Group
• Michael Ryskin, Managing Director at Bank of America Merrill Lynch
• Jan Koch, VP - Equity Research at Deutsche Bank
• Jack Meehan, Equity Research Analyst at Nephron Research LLC
• Daniel Brennan, Managing Director at TD Cowen
• Catherine Schulte, Senior Research Analyst at Robert W. Baird & Co
• Matthew Sykes, Analyst at Goldman Sachs
• Casey Woodring, Vice President - Equity Research at J.P. Morgan