Today, we will review the fourth quarter and full year 2025 financial results and provide an update on key business trends for Bio-Rad. Finally, our remarks today will include references to non-GAAP financials, including net income and diluted earnings per share, which are financial measures that are not defined under generally accepted accounting principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release. We have also posted a supplemental earnings presentation in the investor relations section of our website for your reference.
In 2025, we delivered results within our revised guidance for both revenue and operating margin. However, gross margin did not meet our expectations or, frankly, what Bio-Rad is capable of delivering. In the fourth quarter, gross margin was pressured by higher than anticipated supply chain costs. In Life Science, we are particularly encouraged by the traction from our execution on the Stilla acquisition and the launch of the QX700 droplet digital PCR family and products.
These data points reinforce our belief that QX700 is, is enabling Bio-Rad to expand its served market and gain share in the entry-level digital PCR segment. More broadly, the early success of QX700 strengthens our conviction that digital PCR will remain a core growth pillar for Bio-Rad over the long term. Turning to our end markets, cautious spending persisted throughout the fourth quarter, continues to weigh on instrument demand in academia and government. While the recent passage of the NIH budget may support improved sentiment over time, we believe academic institutions remain focused on maintaining staffing levels and sustaining ongoing research rather than purchasing capital equipment.
| Metric | Period | Current guidance |
|---|---|---|
| Operating margin | FY2026 | 12%-12.5% (new) |
| ddPCR portfolio growth | FY2026 | Mid single digit (new) |
| Process chromatography impact to operating margin | FY2026 | -50 bps headwind (new) |
| Process chromatography growth | FY2027 | Flat to low single digit in 2027, mid single digit beyond (refined timing) |
| Stilla accretion timing | FY2026 | Accretive by mid-2026 (6-12 months earlier) (accelerated) |
| Clinical Diagnostics growth | FY2026 | 1%-2% (new) |
| Metric | YoY | Note |
|---|---|---|
| Net sales (Q4) | +3.9% reported (+1.7% currency neutral) to ~$693M | Driven by the Clinical Diagnostics segment |
| Clinical Diagnostics segment sales (Q4) | +8.4% reported (+5.6% currency neutral) to ~$425M | Higher quality control and blood typing product sales plus China diabetes reimbursement annualization |
| Life Science segment sales (Q4) | -2.6% reported (-4% currency neutral) to $268M | Constrained academic research and biotech funding environment |
| ddPCR portfolio (Q4) | Mid single digit growth | Success of the QX700 platform |
| Non-GAAP gross margin (Q4) | 52.5% vs 53.9% | Higher-than-anticipated supply chain costs from government shutdown timing; expedited freight, overtime, slower procurement progress |
| Non-GAAP operating margin (Q4) | 12% vs 13.8% | Impact from lower gross margin |
| Non-GAAP net income (Q4) | $68M ($2.51 EPS) vs $81M ($2.90 EPS) | Excludes Sartorius equity value change; lower margin |
| Full-year net sales | +0.7% reported (flat currency neutral) to $2.583B | Diagnostics growth offset by Life Science decline |
| Full-year non-GAAP operating margin | 12.1% vs 12.9% | Gross margin headwinds |
| Full-year free cash flow | ~$375M vs $290M | Focused efforts on working capital efficiency |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Gross margin / supply chain costs | Reduced absorption and material costs through 2025 | Q4 pressured by execution-related supply chain costs from government shutdown; described as execution-related not structural, with corrective actions initiated | Worsened, actions underway |
| Process chromatography | Strong 2025 (>20% growth), high single digit FY2026 framing | Vaccine customer demand changes lowered FY2026 outlook; -50 bps operating margin headwind; flat to low single digit in 2027, mid single digit beyond | Deteriorating near-term |
| ddPCR / QX700 | Funnel building, entry-level receptivity | Meaningful instrument sales acceleration; mix shifted to ~one-third instruments from ~20%; qPCR conversions and competitive wins; mid-single-digit FY2026 growth | Improving |
| Academic/government funding | Cautious, no budget flush | Cautious spending persisted; NIH budget passed may support sentiment but institutions focused on staffing over capital equipment | Stabilizing |
| Biopharma funding | Gradual improvement anticipated | Conditions improved in H2 2025, skewed to later-stage biotech; modest core life science recovery anticipated in 2026 | Improving |
| M&A | Looking at assets opportunistically | Actively looking for additional assets to accelerate top line and margin expansion; Stilla cited as model of measured scale | Active |