Repligen Corporation

Good day, ladies and gentlemen, and welcome to Repligen Corporation's second quarter of 2025 earnings conference call. My name is Greg, and I will be your coordinator. All lines have been placed on mute to prevent any background noise. Please note that there will be a question and answer session following the company's formal remarks. At that time, simply press star followed by the number one on your telephone keypad. Once again, star one. The company would like to note that there will be a limited timeframe for Q&A, and as such, management kindly requests that each individual ask one question to try to accommodate all. Thanks for understanding. And I would now like to turn the call over to your host, Jacob Johnson, Vice President of Investor Relations for Repligen.

Jacob? Thank you, Operator, and welcome to our second quarter of 2025 report. On this call, we will cover business highlights, and financial performance for the three-month period ending June 30th, 2025, and will provide financial guidance for the full year 2025. Joining us on the call today are Repligen's President and Chief Executive Officer, Olivier Luliot, and our Chief Financial Officer, Jason Garland. As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning risk related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K for the fiscal year ended December 31st, 2024, and our current reports, including the Form 8-K that we are filing today and other filings that we make with the Securities and Exchange Commission. Today's comments reflect management's current views which could change as a result of new information, future events, or otherwise. The company does not oblige or commit itself to update forward-looking statements except as required by law. During this call, we are providing non-GAAP financial results and guidance unless otherwise noted. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Rappelgen's website and on sec.gov. Adjusted non-GAAP figures in today's report include the following, non-COVID and organic revenue and or revenue growth, cost of goods sold, gross profit and gross margin, operating expenses including R&D and SG&A, income from operations and operating margin, tax rate on pre-tax income, net income, diluted earnings per share, EBITDA, adjusted EBITDA, and adjusted EBITDA margins. These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to best reflect the performance of our ongoing operations. Now, I'll turn the call over to Olivier.

Thank you, Jacob. Good morning, everyone, and welcome to our 2025 second quarter call. We had another outstanding quarter in Q2 with 17% organic non-COVID growth, the highest growth rate since 2022. There were highlights across the portfolio led by chromatography while filtration posted mid-teens non-COVID growth. Consumable demand remained healthy and capital equipment grew high-teens. CDMOs had a very strong quarter while biopharma continued its momentum with revenues growing 20%. Geographically, trends were consistent globally with all regions growing mid-teens in the quarter. orders grew over 20% year-over-year and high teens organically, led by strength infiltration. This marks the eighth quarter in a row of orders exceeding non-COVID revenue and the fifth quarter of sequential order growth. We believe this broad-based demand across our diversified portfolio and customer space highlights our ability to outpace industry growth. As a result, we are raising the midpoint of our organic growth guidance. Given the strong order trends we are seeing, we are investing in manufacturing labor to best serve our customers and preserve our lead times. While there have been a number of macro headlines in recent months, we remain focused on what we can control, which is delivering on our strategy in 2025 and beyond. I'll speak to this more in a moment, but we believe our Q2 results highlight that by executing on our innovation and commercial strategy, we can deliver differentiated growth. Importantly, should our customers face macro challenges or pricing pressure, our products will enable them to improve yield and productivity. Customer centricity is core to our foundation, and we will continue to innovate to enable our customers to produce breakthrough therapies in a more efficient manner. In addition, we are encouraged by the traction at our strategic accounts and great execution by our entire commercial team. In short, we're excited about the momentum in our business, as highlighted by our year-to-date performance, which demonstrates the differentiator nature of RepiGen and the effectiveness of our strategy. Unpacking our performance by end market Q2 2025 biopharma revenues grew 20% year-over-year and orders grew over 20%. This was driven by recent wins at large pharma accounts as we cross-sell our entire portfolio. Revenue from emerging biotechs grew high teens, so orders remained muted. CDMO revenues were up meaningfully while orders grew double digits. This strength was similar across our Tier 1 and Tier 2 CDMO customers. Year-to-date, both revenues and orders from biopharma and CDMOs are up greater than 20%, underscoring the continued momentum from our end markets. Consumable revenue and orders, which exclude proteins, grew greater than 20% year-over-year, a record revenue quarter on a non-COVID basis. Capital equipment revenue returned to growth in the high teens, while orders grew greater than 20%. After optimism around our capital equipment funnel last quarter, it was great to see this convert to orders and revenues this quarter, driven by traction in both ETFs and downstream systems. From a geographic point of view, growth was consistent across all regions in the mid-teens. we would highlight China orders picked up significantly in Q2. While we're hesitant to call this a trend, and there could have been some tariff-related dynamics at play in China, this is an encouraging sign. Coupled with new leadership, we're optimistic about China returning to growth in 2026. And outside of China, APAC orders nearly doubled sequentially. Given this momentum, we're investing more in these regions. New modalities revenue grew mid-teens in the quarter. Demand was fairly broad, including a pickup in cell therapy activity. With orders essentially flat in the quarter, our guidance now assumes new modality demand will be muted in the second half. While we don't typically comment on customers, given recent headlines, we wanted to share the following incremental detail this quarter. A gene therapy platform represented 10 million of revenue in the first half of this year, and we have already recognized 3 million more in July. Our data guidance assumes minimal incremental revenue from this platform for the remainder of 2025, which represents a 1% headwind versus our prior guidance. Momentum in biopharma, consumables, and hardware, along with 20% of the growth in the first half of 2025, gives us confidence to increase our organic growth outlook despite that headwind. Our revenue guidance of $715 to $735 million reflects 12.5 to 15.5 organic non-COVID growth. Jason will provide more details shortly. We recently completed our annual strategic planning process, and I would like to give you a brief update. While this is an internal exercise, We thought in the current environment, it might be helpful to share a few highlights as it relates to our outlook. Our vision is to be the global innovation leader in bioprocessing with a comprehensive portfolio of differentiated data-driven solutions across therapeutic modalities. All of this is backed by a mission to inspire advances in bioprocessing as a preferred partner in the production of biologic drugs that improve human health. As we reflect on the last decade, we have utilized M&A and R&D investments to add innovative products to our portfolio while diversifying our customer base and product offering. As we look ahead, we will continue to maintain customer trust through quality and service, work to cross-sell our portfolio by focusing on key accounts and be fit for growth. In addition, we see growth opportunities including Asia, modalities like ADCs and cell therapy, and trends like digitization. These are key focus areas for future growth at Repigen. We think this results in our ability to outpace industry growth by 5%. Given this organic growth strategy, our strategic plan lays out a path to doubling the size of the company in the medium term with only modest M&A assumptions. As our top line grows, we will remain focused on profitability to drive gross margin expansion and operating leverage. Next, given the strong trends in capital equipment in the quarter, I wanted to touch on our system strategy. We embarked on this journey several years ago, and our portfolio now spans small to larger scale systems across our filtration and chromatography franchises. In addition to automation, configurability, and simplicity benefits, we have integrated our PSE capabilities into these systems and will continue to do so. The strengths we have seen in hardware over the last 12 months is a positive leading indicator. Capital equipment placements will drive services and consumable pull-through in coming years, similar to the benefits we are seeing with ATF today. This is another example of innovation driving growth. We plan to run the same playbook with the 908 bioprocessing portfolio for the upstream workflow. As it pertains to tariffs, we said last quarter we would leverage our global network so charges and pricing were appropriate. With modest investments, we anticipate by next year the vast majority of our portfolio will have dual manufacturing in the U.S. and Europe, which should position us well in this new trade environment. We have been passing surcharges through to customers. Finally, we have taken price actions to offset related inflation. The net result is a slight benefit to our 2025 revenue and a modest headwind to margins. Finally, I wanted to highlight that we published our 2024 corporate sustainability report in May. We take a pragmatic approach to advancing our sustainability-related ambitions. For example, we reduced our waste generation by 25% last year with the help of our Repligen performance system. As a testament to our efforts, we were honored to be named by Newsweek as one of the world's greenest companies in 2025. Before I turn the call over to Jason, I'll provide an overview of our franchise-level performance. Filtration revenue grew mid-teens, excluding COVID in Q2. ETFs, T-STEMs, and TFF consumables were all meaningful contributors to this growth. Filtration orders were very strong, as we had a record quarter for ETF order intake, and as mentioned earlier, good traction on T-STEMs. We expect our hardware portfolio to complement healthy consumable demand to drive further filtration growth in the back half of the year. Chromatography had a record quarter with greater than 40% revenue growth. This was driven by large-scale column demand from pharma and Europe as our Q1 orders translated to revenue growth in Q2. With recent pharma customer wins, we did have a higher than normal mix of procured resins in the quarter. Chromatography orders grew low double digits in quarter two. After a very strong quarter one, proteins posted high single-digit growth in quarter two. This was driven by chromatography resins and ligands. After a very strong first half, our guidance assumes lighter protein revenue in the second half. We are continuing to develop custom and catalog chromatography resins with several product launches planned for the second half of the year. Process analytics grew over 30% in Q2, with $3 million of revenue from the 908 bioprocessing acquisition and 12% organic growth. This was mainly driven by consumable and service uptake. process analytics orders grew north of 20% in Q2, which was 12% organic. We have largely completed the initial integration of the 908 bioprocessing assets, moving their Boston operation to our Marlboro facility. We have also cross-trained both CTEK and 908 commercial teams. To summarize our Q2 performance, 17% organic non-COVID revenue growth showcases the bioprocessing recovery continues to play out as well as our differentiated product portfolio. Our order and funnel trends suggest this momentum should continue into the second half of the year. As a result, we are confident in our update to 2025 outlook and delivering above-market growth. Now, I'll turn the call over to Jason for financial highlights.