What Bio-Rad Laboratories (BIO) Said on Its Q3 Earnings Call

Key Points

• Bio-Rad’s third-quarter revenue rose 0.5% to about $656 million, its first currency-neutral increase of 2026. Clinical diagnostics growth offset a decline in life sciences, where digital PCR gains were outweighed by weakness in process chromatography and academic research.
• Digital PCR sales grew 7%, with instrument revenue up more than 20% for a third consecutive quarter, though Bio-Rad cautioned that this pace may not continue and related consumables have yet to recover to normal levels.
• Bio-Rad reaffirmed its full-year outlook, including currency-neutral revenue growth of -3% to 0.5%, and expects margins and free cash flow near the upper half of guidance. Non-GAAP operating margin improved to 12.8%, while a roughly $50 million non-cash impairment and restructuring charges contributed to a GAAP operating loss.

Bio-Rad Laboratories NYSE: BIO reported modest third-quarter revenue growth, its first currency-neutral increase of 2026, as gains in clinical diagnostics and digital PCR instruments helped offset weakness in parts of its life sciences business.

Revenue for the quarter ended Sept. 30 rose 0.5% to approximately $656 million from $653 million a year earlier. On a currency-neutral basis, sales increased 0.7%. The company reaffirmed its full-year revenue outlook and said it expects growth to land near the midpoint of its forecast range.

President and Chief Operating Officer Jon DiVincenzo said the results marked progress in improving performance, although demand remained uneven across the company’s end markets.

Diagnostics Growth Offsets Life Sciences Decline

Clinical diagnostics sales rose 2.7% on a reported basis to approximately $402 million, or 2.8% on a currency-neutral basis. Chief Financial Officer Roop Lakkaraju attributed the increase to the timing of orders for quality systems and diabetes products. Growth came from the Americas and Asia Pacific.

Life sciences revenue fell 2.8% to $255 million, including a 2.4% currency-neutral decline. Lakkaraju said lower process chromatography sales and challenges in academic research weighed on the segment, partly offset by higher digital PCR instrument sales.

Excluding process chromatography, life sciences sales grew 2.5% on a currency-neutral basis. Bio-Rad’s Droplet Digital PCR, or ddPCR, portfolio grew 7%, with instrument revenue up more than 20% for the third consecutive quarter.

DiVincenzo said instrument sales benefited from customers switching from traditional PCR technology and competitive wins. Consumable sales tied to those instruments have improved but have not yet reached normal levels, he said, adding that the delay could continue into 2027. He also cautioned that the company could not project continued instrument growth of 20% as comparisons become more difficult.

Margins Improve Despite Restructuring Charges

Bio-Rad reported a GAAP operating loss of approximately $50 million, compared with operating income of approximately $65 million a year earlier. Results included restructuring charges and a roughly $50 million non-cash impairment of purchased intangible assets in the life sciences segment.

On a non-GAAP basis, gross margin improved to 54.5% from 53.5% a year earlier, while operating margin rose to 12.8% from 11.8%. Non-GAAP net income was $72 million, or $2.65 per diluted share, compared with $61 million, or $2.26 per share, in the prior-year quarter. The non-GAAP figures exclude changes in the equity value of Bio-Rad’s stake in Sartorius AG, among other items.

Lakkaraju said the company still expects $30 million to $35 million in savings from its restructuring plan, but that the full amount would take effect starting in 2028. He said Bio-Rad believes it can achieve operating margins above 20% over time.

Company Reaffirms Outlook Amid Market Pressures

Bio-Rad reaffirmed its forecast for full-year currency-neutral revenue growth of between a decline of 3% and an increase of 0.5%. It expects fourth-quarter reported revenue to rise 5% to 6% sequentially, in line with typical seasonality.

The company expects full-year non-GAAP gross margin in the upper half of its 53% to 54% guidance range and non-GAAP operating margin in the upper half of its 10% to 12% range. It also reaffirmed its free cash flow forecast of approximately $290 million to $340 million.

For 2027, Lakkaraju said Bio-Rad would focus on returning to positive revenue growth and further expanding margins, but the company plans to provide formal guidance with its year-end results.

Management described continued pressure in U.S. academic and government markets and said its fourth-quarter forecast does not assume a recovery there. China returned to growth in the third quarter, though DiVincenzo attributed much of the improvement to orders shifted from the second quarter and a favorable year-earlier comparison. Bio-Rad estimates updated Chinese diagnostic pricing guidelines could reduce 2027 revenue by a mid-single-digit millions amount.

Innovation and Capital Priorities

Bio-Rad launched its ChemiDoc Pro imaging system during the quarter. DiVincenzo said the system’s analytical algorithm was developed using artificial intelligence trained on thousands of Western blot images. The company also expanded its Foresight Pro chromatography column portfolio.

CEO Norman Schwartz said Bio-Rad was evaluating candidates to expand its board with additional life sciences and diagnostics operating experience. He described the company’s dialogue with Elliott Management as “active and productive.”

Lakkaraju said Bio-Rad would continue to approach share repurchases opportunistically and consider acquisitions with roughly $100 million to $500 million in revenue. He also said the company’s position on its Sartorius stake had not changed: Bio-Rad could monetize the asset if it found a scenario in which doing so made sense.

About Bio-Rad Laboratories (NYSE:BIO)

Bio-Rad Laboratories, Inc develops, manufactures and markets products and systems used in life science research and clinical diagnostics. Its life science portfolio includes laboratory instruments, reagents, software and consumables used in areas such as genomics, proteomics, cell biology, biopharmaceutical development and quality control.

The company's clinical diagnostics business provides systems, reagents and software for blood typing, infectious disease testing, diabetes monitoring, quality control and other diagnostic applications.

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