QuidelOrtho Corporation

Welcome to the Quidel Ortho fourth quarter and full year 2024 financial results conference call and webcast. At this time, all participant lines are in a listen-only mode. For those of you participating on the conference call, there will be an opportunity for your questions at the end of today's prepared remarks. Please note this conference call is being recorded. An audio replay of the conference call will be available on the company's website shortly after this call. I would now like to turn the call over to Juliet Cunningham, Vice President of Investor Relations.

Thank you. Good afternoon, everyone. Thanks for joining us for the fourth quarter and full year 2024 Financial Results Conference Call. With me today are Brian Blaser, President and Chief Executive Officer, and Joe Buskey, Chief Financial Officer. This conference call is being simultaneously webcast on the Investor Relations page of our website. To aid in the discussion, we posted a supplemental presentation on the IR page that will be referenced throughout this call. This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, statements that are not strictly historical, including the company's expectations, plans, financial guidance, future performance, and prospects, are forward-looking statements that are subject to certain risks and uncertainties, assumptions, and other factors. Actual results may vary materially from those expressed or implied in these forward-looking statements. Information about potential factors that could affect our actual results is available on our annual report on Form 10-K for the 2023 fiscal year and subsequent reports filed with the FDC. including the risk factors section. Forward-looking statements are made as of today, February 12, 2025, and we assume no obligation to update any forward-looking statement except as required by law. In addition, today's call includes discussion of certain non-GAAP financial measures. Tables reconciling these non-GAAP measures to their most directly comparable GAAP measures are available in our earnings release and the supplemental presentation, which are on the investor relations page of our website at quidelortho.com. Lastly, unless stated otherwise, all year-over-year revenue growth rates given on today's call are given on a comparable constant currency basis. And now I'd like to turn the call over to our CEO, Brian Blazer.

Thanks, Juliette. Good afternoon, everyone, and thank you for joining us on the call today. We finished the year with solid top-line results that were in line with our 2024 financial guidance, and I'm encouraged by the progress that we're making in improving our cost structure and focusing the business to elevate profitable growth. Today, I'll discuss our 2024 operational highlights and key priorities for 2025, and then Joe will provide greater detail as we share our 2025 four-year guidance. As I've mentioned in previous calls, I've been driving an operating model designed to empower our leadership team to focus on growth and profitability. As part of this strategy, I made key changes to the leadership team to ensure we have the right mix of talent and expertise to move our vision forward. Having the right leadership in place is essential for driving innovation, improving operational efficiency, and positioning the company for success. Our efforts to prioritize high impact opportunities are showing early signs of progress as reflected in our second half 2024 results. Turning to the fourth quarter of 2024, we saw ongoing contribution from our labs, immunohematology, and point of care businesses. Total reported revenue in Q4 was $708 million, which decreased by 4% year-over-year due to the expected declines in COVID and flu testing revenues. Importantly, over 90% of our Q4 sales were recurring, driven by reagents, consumables, and service. And I mentioned that all growth rates I'm about to give are in constant currency. Our labs business, which is roughly 50% of our total company revenues, achieved growth of 4% on a reported and constant currency basis, excluding COVID and non-core revenue. This performance underscores its durable and predictable business model with strong brand recognition, long-term contracts, and a loyal customer base. Within transfusion medicine, our immunohematology business continued to drive stable growth of 4% during the fourth quarter. And despite challenging year-over-year comparisons from the decline of COVID testing, our point-of-care business continues its leadership position with Sophia's large global installed base and our flu-COVID combo test. And lastly, in our molecular diagnostics business, we initiated clinical trials for our Savannah respiratory panel last month. which coincided with the ramp up of this year's respiratory season. We expect to complete our trials over the next few months as the season runs its normal course. Adjusted EBITDA for the fourth quarter of 2024 was $150 million, which represents 21% adjusted EBITDA margin and adjusted diluted EPS of 63 cents. As we continue to move our business forward, I've spoken about our three central priorities. delivering the best experience from our customers, prioritizing execution on a small number of high-impact programs, and driving profitable, sustainable growth. These priorities include improving R&D productivity and the strength of our platform content, as well as development of new systems that will enable us to strengthen our global market position. In addition, we continue to drive cost reduction initiatives that we started in 2024, including realizing the remainder of our previously announced cost savings by midyear and implementing new actions focused mainly on procurement and gross margin improvement. We expect these programs to drive margin growth over the next few years that will achieve benchmark levels of profitability. In closing, I have been impressed with our team and grateful for their support as we made difficult but necessary changes this past year. Despite challenging circumstances, our team has been resilient and determined to build an innovative, enduring company that's focused on supporting our customers and their needs. I look forward to sharing our progress on our operational and financial results as we move through 2025. And with that, I will hand it over to Joe to discuss our 2024 financial performance and guidance for 2025. Okay. Thanks, Brian.