• Q4 2024 Net Sales: Approximately $668 million, a 2% decline from $681 million in Q4 2023.
• Life Science Segment Sales Q4 2024: $275 million, a 5.5% decline from $291 million in Q4 2023.
• Clinical Diagnostics Segment Sales Q4 2024: $393 million, a 0.9% increase from $389 million in Q4 2023.
• Q4 2024 GAAP Gross Margin: 51.2%, down from 53.8% in Q4 2023.
• Q4 2024 Non-GAAP Gross Margin: 53.9%, compared to 54.4% in Q4 2023.
• Q4 2024 Operating Income: $58 million, 8.7% of sales, compared to $95 million, 14% of sales in Q4 2023.
• Q4 2024 Non-GAAP Net Income: $81 million or $2.90 diluted earnings per share.
• Full Year 2024 Net Sales: $2.567 billion, a 3.9% decline from $2.67 billion in 2023.
• Full Year 2024 Non-GAAP Gross Margin: 55%, up from 54.2% in 2023.
• Full Year 2024 Free Cash Flow: Approximately $290 million, compared to $218 million in 2023.
• Full Year 2024 Share Buybacks: 691,000 shares for approximately $22 million.
• 2025 Revenue Growth Guidance: Currency-neutral growth between 1.5% and 3.5%.
• 2025 Non-GAAP Gross Margin Guidance: Projected between 55% and 55.5%.
• 2025 Non-GAAP Operating Margin Guidance: Projected between 13% and 13.5%.
• 2025 Free Cash Flow Guidance: Approximately $310 million to $330 million.

• Warning! GuruFocus has detected 4 Warning Sign with BIO.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bio-Rad Laboratories Inc (NYSE:BIO) successfully met its revised 2024 guidance for both revenue and operating margin.
• The company achieved gross margin expansion in 2024 through productivity improvements and effective cost management.
• Bio-Rad Laboratories Inc (NYSE:BIO) entered into a binding offer to acquire Stilla Technologies, which is expected to enhance its digital PCR portfolio.
• The Clinical Diagnostics Group saw a 3.3% increase in sales for 2024, driven by demand for quality control and blood typing products.
• The company reported a significant improvement in free cash flow for 2024, reaching approximately $290 million compared to $218 million in 2023.

Negative Points

• Net sales for the fourth quarter of 2024 declined by 2% on a reported basis, primarily due to lower sales in the Life Science segment.
• The Life Science Group experienced a 12.8% decline in sales for 2024, with currency-neutral sales decreasing across all regions.
• The company faced a revenue decline in its diabetes portfolio due to a reimbursement change in China, impacting Q4 gross margin.
• Bio-Rad Laboratories Inc (NYSE:BIO) implemented a 5% workforce reduction to align headcount with its global organization.
• The company reported a net loss of $716 million for the fourth quarter of 2024, primarily due to a $977 million loss related to the fair market value of equity security holdings.

Q & A Highlights

Q: What is the expected growth for Bio-Rad's Droplet Digital PCR (ddPCR) and process chromatography segments in 2025? A: Roop Lakkaraju, CFO, stated that ddPCR is expected to grow between 1% to 2%, while process chromatography is anticipated to grow in the high single-digit range. The recent acquisition of Stilla Technologies is not included in this growth range and could potentially add to it once the acquisition closes.

Q: Can you explain the factors influencing the gross margin guidance for 2025? A: Roop Lakkaraju explained that the gross margin guidance of 55% to 55.5% is influenced by end-market conditions, particularly in academia and biopharma, which remain soft. The guidance also considers potential improvements from operational initiatives and sales volume increases. The midpoint of the guidance is 13.25%, with variations depending on market recovery.

Q: What is the outlook for Bio-Rad's process chromatography business in 2025? A: Roop Lakkaraju confirmed that the process chromatography business declined significantly in 2024 but is expected to grow in the high single digits in 2025. This optimism is based on customer conversations and the continuation of destocking trends.

Q: How will the acquisition of Stilla Technologies impact Bio-Rad's portfolio and financials? A: Jon DiVincenzo, COO, mentioned that Stilla's new platform complements Bio-Rad's portfolio by addressing both entry-level and high-end digital PCR markets. Roop Lakkaraju added that the acquisition is expected to be accretive within 18 to 24 months post-closing, expanding market opportunities without cannibalizing existing products.

Q: What are the anticipated impacts of the China reimbursement changes on Bio-Rad's financials? A: Roop Lakkaraju noted that the reimbursement change for diabetes testing in China, which was implemented earlier than expected, will have a mid-teens million-dollar impact on revenue. This change is not expected to affect other areas of Bio-Rad's testing portfolio.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.