QuidelOrtho Corporation

So also second quarter, 2025 financial results conference call and webcast. At this time, all participant lines are in a listen only mode. For those of you participating in this 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 and audio replay of this conference call will be available on companies webcast shortly after this call. I would now like to turn the call over to Juliet Cunningham, the vice president of investor relations. Please proceed.

Thank you. Good afternoon, everyone, and thanks for joining the Quite Out Ortho second quarter, 2025 financial results conference call. Joining me today are Brian Blazer, president and chief executive officer, and Joe Buskey, chief financial officer. This conference call is being simultaneously webcast on the investor relations page or website. To aid in the presentation, we have also posted supplemental information on the investor relations page that will be referenced throughout this call. This conference call and supplemental information contain forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. Statements that are not historically, strictly historical, including the company's expectations, plans, financial guidance, and future performance, as well as prospects, are forward-looking statements that are subject to certain risks, uncertainties, assumptions, and other factors. This includes the expected impact of tariffs and macroeconomic conditions and the proposed acquisition of RECs diagnostics. 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 in our annual report on Form 10-K for the 2024 fiscal year and subsequent reports filed with the SEC, including the risk factor section. Forward-looking statements are made as of today, August 5, 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-GAP financial measures. Tables reconciling these non-GAP measures to the most directly comparable GAP measures are available in our earnings release and the supplemental information, which are on the investor rate relations page of our website at phytelortho.com. Lastly, unless stated otherwise, all -over-year revenue growth rates given on today's call are on a constant currency basis. Now I'd like to turn the call over to our CEO, Brian Blaser.

Thanks, Juliette. Good afternoon, everyone, and thanks for joining us today. I'll begin by reviewing our second quarter results, and then I'll discuss how we are addressing changes to U.S. trade policy and tariffs, and I'll finish with my thoughts on our recently announced intent to acquire LEPs diagnostics in the molecular space. Beginning with our second quarter results, total revenue of $614 million grew 1% excluding COVID and the donor screening business, which we are in the process of winding down. Joe will go into additional detail, but let me provide some of the top-line Q2 and -to-date highlights. First, we delivered consistent, solid results in our labs and immunohematology business units with organic constant currency growth of 5% and 3%, respectively. Our respiratory business remained stable for this time of year, with a relatively small $2 million revenue decline excluding COVID. As many of you know, Q2 is typically our lowest revenue quarter of the year due to the seasonally low viral prevalence, especially in North America. As a result, North America revenue declined by 12% during the quarter. Our Q2 OUS performance was led by strength in Latin America, Japan, Asia Pacific, and Europe, Middle East, and Africa. EMEA growth was up 3% in the quarter and is up 6% -to-date, and our other region grew 10% in the quarter with 14% growth in Latin America and 6% growth in Japan, Asia Pacific. Our low OUS penetration continues to be a significant opportunity for growth for us and is an area of focus. Turning down to China, we had 2% growth in Q2 despite the tariff-related shipment holds we had in place in the month of April, and those shipments have since been fully restored. China has been a challenging market for many of our peers, but it continues to be an important market for us. Most of our China business is in clinical chemistry where we have differentiated technology that has not been subject to the volume-based procurement processes that are impacting other multinational companies. Our solutions are highly valued in the market, in particular in stat labs and distributed testing environments that benefit from our waterless technology and the reliability of our platforms. We also have relatively low market penetration in China, particularly in immunoassays, so we look forward to a very long runway for expansion over the coming years. Our view is that the volume-based procurement initiatives will not have a significant impact on our business this year. We have seen reimbursement changes flow through in cardiac markers that we have discussed for some time now. We have good visibility to our second half forecast, so we're narrowing our range for China to -single-digit growth. Moving to our Q2 profitability metrics, the impact of our cost structure actions are really starting to kick in. Adjusted EBITDA margin improved by 330 basis points, and we also saw meaningful improvement in adjusted diluted EPS compared to the prior year period. These results were in line with our guidance and higher than consensus. Our second quarter and -to-date results reinforce that the commercial and operations improvement initiatives that we launched last year are having a positive impact on our performance. Our global commercial team has sharpened its focus on key markets, value expansion in key accounts, and profitable growth in international markets that value our broad portfolio of solutions. Our R&D team is working on compelling innovation, including increasing the breadth of our testing menu, improving the utility of our current platforms, and developing new systems that will continue to differentiate us from our competitors. Our operations team is making strides in optimizing our cost structure, generating direct and indirect procurement cost savings, and consolidating one of our major manufacturing sites. We have clear visibility to a rich funnel of projects that we expect will yield significant incremental cost savings and margin expansion, and we expect to see the positive impact of these initiatives appear in our results in the latter part of 2025 and into 2026. And importantly, our efforts to be a more customer-focused organization are really paying off. And you can see this with our announcement last week that Fidel Orto earned first-place rankings by Service Track for best overall clinical chemistry and integrated system performance and best overall for service. Our company has the highest customer service ranking in our markets, as measured by Net Promoter Score, among some very tough competitors. Advancing the performance of our business also requires investment in top talent, and so we were pleased to welcome two exceptional senior leaders in global quality and regulatory affairs last month. Devin Burak joined us as Senior Vice President of Global Quality, and Sergio Gattaletta joined as Senior Vice President of Clinical and Regulatory Affairs. Both Devin and Sergio have extensive industry experience, but more importantly, they're the kind of transformational leaders that we want in our business to elevate our performance. Now I'd like to briefly discuss the situation with tariffs and how we are navigating current conditions. While the global trade tensions have caused uncertainty, other market conditions in the second quarter were generally consistent with what we saw in the first quarter. I think our team did a tremendous job of acting quickly to mitigate any potential impact, primarily through inventory management and cost controls. And given the current state of trade agreements and our continued mitigation efforts, we estimate potential tariff headwinds of $20 to $25 million in 2025, which is lower than our prior estimate of $30 to $40 million. We continue to expect to fully mitigate tariff headwinds through the actions we're taking, and of course we continue to closely monitor the situation. Lastly, I'd like to talk about our molecular strategy and why we are so excited about this incremental growth opportunity. As we announced in June, we intend to acquire ownership of Lex Diagnostics upon FDA clearance of its Velo molecular platform and respiratory panel. Lex is a UK-based molecular diagnostics company with an innovative molecular platform that can deliver results in minutes. It takes approximately six minutes for a positive result on its respiratory panel for Flu A, Flu B, and COVID with excellent performance. The Lex platform integrates seamlessly in the -of-care workflows. It provides a highly competitive value proposition centered on speed, performance, and cost. And once the transaction is completed, we will move quickly to expand the test menu, both in the respiratory space, but importantly into other applications like women's health and FCI. And since our announcement, we have garnered significant interest from our customers. Our commercial team is really excited about the growth potential for the platform. Lex submitted a dual 510K and CLIA waiver for the Velo platform to the FDA in June, and the review process is well underway. If the product is successful in achieving clearance in 2025, we would expect to begin placements on a limited basis in early 2026 with the objective of ramping up placements during the 26-27 respiratory season. With that, I'll wrap up by saying that we are pleased with the progress we've made on our top priorities and the strength of our underlying business. We are seeing the results of our efforts materialize, and we remain committed to delivering on our strategy to drive growth, expand profitability, and deliver on innovation that advances the power of diagnostics for a healthier future. With that, I'll turn the call over to Joe to take you through our second quarter financial details. Joe?