They will comment on our results for the Q4 of 2025, as well as our financial guidance for 2026. During the call, we will primarily discuss non-GAAP financial measures, which we believe help investors gain a meaningful understanding of our core operating results and guidance. Birgit will provide an overview of our 2026 guidance and the key drivers behind our outlook. Before I hand the call over to her, I will provide details on our Q4 and full year 2025 financial results, as well as an update on our latest developments and market trends.
We were pleased that our 2025 financial results were at the upper ends of the revenue and non-GAAP earnings per share ranges that we provided in November. Beyond our financial results, the Q4 capped a year that was marked by the stabilization of the biopharma demand environment, including substantial improvements in DSA net bookings, particularly during the first and Q4. At different points during 2025, demand from both global biopharmaceutical clients and small and mid-sized biotechnology clients showed signs of improvement. The biotech funding environment slowed in the first half of 2025, and we subsequently experienced softer demand trends from our small and mid-sized biotech clients during the summer months.
K.F., the acquisition of which has already closed, has been a longtime NHP supplier in Cambodia and will further strengthen and secure our DSA supply chain. We expect it will generate meaningful operating margin improvement starting later this year through significant cost savings on NHP sourcing. and NovaPrim, we expect to own and internally source most of our future annual NHP supply requirements for the DSA segment. We continued to advance our NAMs capabilities with the planned acquisition of PathoQuest, which is expected to close within the next month.
| Metric | Period | Current guidance |
|---|---|---|
| Organic revenue | FY2026 | down 1% to at least flat (new) |
| Reported revenue | FY2026 | at least flat to 1.5% growth (new) |
| Non-GAAP EPS | FY2026 | $10.70-$11.20 (growth ~4%-9%) (new) |
| Operating margin | FY2026 | improve 20-50 bps (new) |
| DSA organic revenue | FY2026 | slightly positive to low single-digit decrease (new) |
| RMS organic revenue | FY2026 | low- to mid-single-digit decline (new) |
| Manufacturing organic revenue | FY2026 | low single-digit increase (new) |
| Non-GAAP tax rate | FY2026 | 22%-23% (decrease) |
| Net interest expense | FY2026 | $95M-$100M (decrease) |
| Free cash flow | FY2026 | $375M-$400M (decrease) |
| CapEx | FY2026 | approximately $200M (~5% of revenue) (slight reduction) |
| Operating margin | Q1 2026 | mid-teens (new) |
| Metric | YoY | Note |
|---|---|---|
| Q4 revenue | -2.6% organic | Revenue declines across all three business segments |
| FY revenue | -1.6% organic to $4.02B | Lower revenue in DSA and manufacturing segments |
| Q4 global biopharma sales | rebounded meaningfully | Clients got back to work after pulling back on spending at the end of 2024 |
| DSA net book-to-bill | 1.1x in Q4 | Steady sequential monthly improvement driven by biotech clients amid record $28B biotech funding quarter |
| Biologics testing | returned to growth in Q4 | Higher demand principally from Europe after a complicated 2025 of lower sample volumes from project delays and regulatory challenges |
| Net leverage | 2.0x | Continued debt repayment, outstanding debt reduced to $2.1B |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| DSA demand environment | Stabilizing, improving | Cautiously optimistic on continued favorable trends; H2 2026 return to growth expected | Improving |
| Net book-to-bill | Low 0.8 range | 1.1x in Q4 | Improving |
| Biotech funding | Improving | Record $28B in Q4 | Improving |
| Portfolio strategy | Strategic review first phase complete | K.F. and PathoQuest acquisitions announced; ~7% revenue divestitures ongoing | Improving |
| NHP supply chain | Higher third-party sourcing costs | K.F. and Noveprim to internally source most future NHP needs; benefit in H2 2026 | Improving |
| Cost savings | ~$225M cumulative annualized | Over $300M cumulative; at least $100M incremental in 2026 | Improving |
| Leadership transition | Jim Foster CEO | Birgit Girshick to become CEO in May; Glenn Coleman to join as CFO April 6 | Stable |
| NAMs and AI | Nascent, complementary | Enabling technology, gradual longer-term evolution; no notable change in client behavior | Stable |