Earnings Call Insights: Bio-Techne Corporation (TECH) Q4 2025
Management View
- Kim Kelderman, CEO, announced "we delivered a solid quarter that was in line with our expectations," highlighting 3% organic revenue growth and robust demand from large pharma for automated proteomic analytical instrumentation and cell therapy solutions. He stated, "Our performance was once again fueled by strength in the biopharma end markets, particularly among large pharma customers, which fueled robust demand for our automated proteomic analytical instrumentation and cell therapy solutions."
- Kelderman emphasized the divestiture of the Exosome Diagnostics business, stating, "Following a thorough strategic assessment, we concluded that a single high-performing CLIA test does not provide us the operational leverage needed to support our broader growth ambitions." He added the transaction "delivers an immediate uplift to our already sector-leading operating margin profile."
- The CEO noted continued operational efficiencies, reporting "an adjusted operating margin of 32% for the quarter," and reiterated the company’s focus on balancing investments for growth with productivity.
- James T. Hippel, CFO, reported, "Adjusted EPS was $0.53 compared to $0.49 in the prior year," and "Q4 revenue was $317 million, an increase of 3% year-over-year on an organic basis and 4% reported."
- Hippel highlighted, "We returned capital to shareholders by way of $12.4 million in dividends and $100.1 million through stock buybacks."
Outlook
- Hippel shared, "We anticipate that our organic growth will remain in the low single-digit range until the current headwinds across our end markets begin to subside."
- He stated, "We expect adjusted operating margin expansion of approximately 100 basis points in fiscal year '26 compared to fiscal 2025, starting flat year-over-year in our first quarter and ramping to roughly 200 basis points higher by Q4."
- Management indicated investments will be redirected from the ExoDx franchise toward core growth pillars, including proteomic analysis, spatial biology, and cell therapy applications.
Financial Results
- Hippel reported, "Adjusted EPS was $0.53 compared to $0.49 in the prior year, with foreign exchange having a favorable $0.03 impact. GAAP EPS for the quarter was a loss of $0.11 compared to a positive $0.25 in the prior year period."
- Q4 revenue was $317 million, with North America and APAC (excluding China) increasing low single digits, Europe growing mid-single digits, and China increasing low double digits.
- Adjusted gross margin was 70.1% in the quarter compared to 71.1% last year. Adjusted operating margin for Q4 was 32%, down 150 basis points compared to the prior year due to unfavorable product mix.
- Protein Sciences segment reported sales of $226.5 million, with organic growth of 4% and operating margin of 43.6%. Diagnostics and Spatial Biology segment reported sales of $89.7 million, with both reported and organic growth decreasing 1% and operating margin at 6%.
- $98.2 million in cash was generated from operations in the quarter; $12.4 million in dividends and $100.1 million in stock buybacks were returned to shareholders.
Q&A
- Puneet Souda, Leerink Partners, asked about guidance for fiscal '26 and the cadence for Protein Sciences segment growth. Hippel responded, "the guidance was not necessarily for full year fiscal '26 growth of low single digits. It was that we expect low single-digit growth until there is more certainty around the various administration policies."
- Daniel Louis Leonard, UBS, questioned margin expansion drivers. Hippel stated, "It is being driven by the divestiture of Exosome. As we mentioned, Exosome was a headwind of about 200 basis points to our margin in fiscal year '25."
- Daniel Anthony Arias, Stifel, asked about NIH funding exposure. Hippel explained, "roughly 50%, 55% of their funding comes from federal sources. And of those federal sources, roughly 50% comes from NIH. So that equates to roughly less than 1/3 of the academic research funding coming from specifically NIH."
- Kyle Boucher, TD Cowen, asked about trends between large pharma and biotech. Hippel replied, "large pharma grew double digit. So large pharma has been very robust for us as well."
- Brandon Couillard, Wells Fargo, inquired about margin outlook. Hippel clarified, "we expect there to be about 200 basis points of improvement by the time we get to Q4."
Sentiment Analysis
- Analyst sentiment reflected persistent caution, with repeated questions about guidance reliability, margin expansion, and the impact of macro uncertainties. There was a slightly negative tone as analysts pressed for specifics on growth drivers and mitigation strategies.
- Management maintained a neutral to slightly positive tone in prepared remarks, emphasizing operational discipline and portfolio resilience. During Q&A, management shifted to a more cautious tone, using phrases such as "we expect" and "we believe" and repeatedly deferring specifics due to ongoing uncertainty.
- Compared to the previous quarter, both analysts and management displayed increased concern about persistent uncertainties, particularly around NIH funding and tariffs.
Quarter-over-Quarter Comparison
- Organic revenue growth decelerated from 6% in Q3 to 3% in Q4, and adjusted operating margin declined from 34.9% to 32%.
- The Q4 call introduced a major strategic shift with the Exosome Diagnostics divestiture, positioning the company for margin expansion.
- Analysts in the current quarter focused more on margin sustainability, the cadence of growth recovery, and Exosome's impact, while previously there was greater emphasis on tariff mitigation and academic market headwinds.
- Management’s tone in Q4 was more cautious, with less certainty about the timing of market stabilization than in Q3.
Risks and Concerns
- Management cited ongoing uncertainties from U.S. pharmaceutical tariffs, possible changes in NIH funding, and constrained biotech funding as key risks.
- Hippel warned, "additional risks are emerging, including the potential for budget precision and a shift toward multi-year grant funding by the executive branch."
- Analysts raised concerns about the pace of recovery in biotech funding and the potential for further turbulence in the academic sector. Management’s mitigation strategies include cost containment, operational efficiencies, and the redirection of investments into core growth areas.
Final Takeaway
Bio-Techne’s Q4 2025 earnings call underscored the company’s resilience amid persistent macro uncertainties, highlighted by stable performance in key end markets and a strategic divestiture expected to drive margin expansion. Management’s disciplined approach—balancing investment in growth pillars with cost controls—positions the company for long-term value creation as it navigates ongoing external headwinds and prepares for a return to higher growth once market conditions stabilize.
Read the full Earnings Call Transcript
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- Bio-Techne Corporation (TECH) Q4 2025 Earnings Call Transcript
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- Bio-Techne Non-GAAP EPS of $0.53 beats by $0.03, revenue of $316.96M beats by $2.26M
- Bio-Techne announces Exosome Diagnostics divestiture
