Bio-Techne NASDAQ: TECH reported fiscal third-quarter 2026 results marked by uneven end-market conditions, with strong demand from large pharmaceutical customers and stabilizing U.S. academic trends offset by continued weakness in emerging biotech spending. President and CEO Kim Kelderman said the company “continued to execute with discipline in a dynamic and uneven end market environment,” as the quarter included a 2% organic revenue decline, which management attributed in part to customer and order-timing factors.
Quarterly performance and key timing headwinds
Total revenue was $311.4 million, down 2% on both a reported and organic basis, according to CFO Jim Hippel. Adjusted EPS was $0.53, down $0.03 from the prior year, while GAAP EPS was $0.32, up from $0.14. Hippel said foreign exchange provided a 2% tailwind to revenue, while the prior divestiture of Exosome Diagnostics created a 2% headwind.
Management again highlighted that timing related to “two of our largest cell therapy customers who received FDA Fast Track designation,” along with the shift of a large OEM commercial supply order into the prior quarter, pressured the quarter by about 400 basis points in total. Kelderman said excluding those timing impacts, “underlying organic revenue growth was 2%.” Hippel echoed that view, noting that adjusting for these items, organic growth would have been +2%.
End-market trends: large pharma strength, emerging biotech softness, academic stabilization
Kelderman described a divergence inside biopharma. Revenue from large pharma customers grew “low double-digits,” which she said was driven by continued investment in discovery, translational research, and manufacturing. At the same time, emerging biotech revenues declined “high-single-digits,” which management linked to a lag between improving funding conditions and customer spending. Kelderman said biotech funding activity had “rebounded meaningfully,” including increases of more than 90% and 50% in fiscal Q2 and Q3, respectively, but that spending tends to trail funding by two to three quarters.
In academia, the company delivered “low single-digit growth,” with Kelderman saying the U.S. academic market “returned to growth in the third quarter.” She pointed to improving NIH outlays and grant activity, as well as a 1% increase to the NIH budget, as factors that reduced uncertainty.
From a geographic perspective, Hippel said North America declined low single-digits, while Europe increased mid-single digits. China posted “the fourth consecutive quarter of growth,” with revenue up low single-digits, and APAC excluding China also grew low single-digits despite a “very strong comp,” in Hippel’s words.
Segment performance: Protein Sciences pressured by core portfolio, Spatial Biology surges
Protein Sciences organic revenue declined 4% in the quarter, though management said underlying growth was positive when adjusting for timing. Hippel reported segment sales of $226.2 million, down 1% year-over-year. Kelderman said GMP protein revenue grew “nearly 50% year-over-year” when excluding the two Fast Track-designated cell therapy customers, explaining that those customers had already secured material needed for their accelerated clinical timelines.
Within proteomic analysis, management cited favorable placements and utilization. Kelderman said growth was led by an “upper teens” increase in the Ella benchtop immunoassay platform, and noted Bio-Techne achieved CE IVD marking for Ella during the quarter. She also highlighted continued traction in biologics characterization led by Maurice, which drove “double-digit growth in both Maurice instruments and consumables.”
The company’s core reagent and assay portfolio declined mid-single digits. Kelderman said large pharma strength was offset by “continued softness in U.S. academic demand and the lingering effects of last year's challenging biotech funding environment.” Hippel added that, excluding the timing impact of one large OEM customer order, the decline was limited to low single digits, and he said that in proteins and antibodies specifically, “both our proteins and antibodies combined grew low single-digits this quarter” after excluding that OEM order.
Diagnostics and Spatial Biology delivered 3% organic growth. Hippel reported segment sales of $85.6 million, down 4% year-over-year due to the Exosome Diagnostics divestiture. Kelderman said the Spatial Biology portfolio posted “mid-teens growth,” driven by more than 65% growth in COMET. She added that the company installed “the first COMET system in China” during the quarter and ended the period with “another record backlog” for COMET. RNAscope improved to “high single-digit growth,” while the diagnostics portfolio declined low single-digits due to order timing, which Kelderman said can make results “lumpy from quarter-to-quarter.”
Margin performance, cash flow, and capital allocation
Profitability improved sequentially. Kelderman said adjusted operating margin was 34.2%, a 310 basis point sequential improvement from fiscal Q2. Hippel said adjusted gross margin was 70.4%, down year-over-year due to unfavorable mix but up 190 basis points sequentially. Adjusted operating margin was down 70 basis points year-over-year, which Hippel attributed to “unfavorable mix and volume deleverage.”
The company generated $86.7 million in operating cash flow and spent $9.1 million in net capital expenditures. It returned $12.5 million to shareholders via dividends, and average diluted shares outstanding were 157.4 million, down 1% year-over-year. Bank debt ended the quarter at $200 million, down $60 million sequentially, and Hippel said Bio-Techne finished with $209.8 million in cash and leverage “well below 1x EBITDA.” He also said M&A “remains a top priority for capital allocation.”
Strategic initiatives: brand alignment and AI emphasis
Kelderman highlighted a strategic brand alignment announced in April, reducing Bio-Techne’s portfolio from 10 brands to three: R&D Systems, Bio-Techne Spatial, and Bio-Techne Diagnostics. She said the change is designed to simplify customer engagement and better align offerings across discovery, translational research, and clinical applications.
She also discussed how the company is using AI internally to design “novel and patentable proteins with enhanced properties,” and said its models are trained on “five decades of proprietary data.” Kelderman added that AI adoption is accelerating target discovery and increasing demand for “content rich biological data sets,” which she said supports spatial biology and proteomic analysis platforms, while also acting as a downstream driver for reagents and assays used in biological validation.
Outlook: flat Q4 organic growth expected, with biotech as the swing factor
Looking ahead, Hippel said the company expects organic growth in fiscal Q4 to be “approximately flat.” He said the Fast Track-related cell therapy headwind moderates in the fourth quarter to about 150 basis points and will be “fully out of our comparisons as we enter fiscal 2027.” Excluding that headwind, management expects “low single-digit underlying growth across the remainder of the portfolio,” assuming market conditions are consistent with Q3.
Management repeatedly characterized emerging biotech as the key variable. Kelderman told analysts the step-down in emerging biotech revenue was a “surprise,” and she attributed it to a mix shift in funding toward later-stage biotech, while early-stage funding—more directly tied to Bio-Techne’s core reagents—was down. Hippel said the company’s base case assumes biotech performance in Q4 similar to Q3, though he noted that any incremental improvement could be additive.
On fiscal 2027, Hippel said the company would be “disappointed” if it did not deliver at least mid-single-digit growth, citing normalization in end markets and the roll-off of company-specific headwinds. He added that Bio-Techne will provide more detail on fiscal 2027 when it reports next quarter.
About Bio-Techne NASDAQ: TECH
Bio-Techne Corporation NASDAQ: TECH is a global life sciences company that develops, manufactures and sells high-quality reagents, instruments and services for the research, diagnostic and bioprocessing markets. Its core product offerings include recombinant proteins, antibodies, immunoassays, nucleic acid probes and kits, single-cell analysis solutions and automated protein analysis systems. Flagship brands such as R&D Systems, Novus Biologicals, ProteinSimple and Advanced Cell Diagnostics provide researchers and clinicians with reliable tools for cell biology, immunology, proteomics and genomics applications.
Headquartered in Minneapolis, Minnesota, Bio-Techne serves customers across North America, Europe and the Asia-Pacific region through a combination of direct sales, distributors and strategic partnerships.
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