Repligen Corporation

Good day, ladies and gentlemen, and welcome to Repligen Corporation's first quarter 2026 earnings conference call. My name is Samantha and I will be your coordinator. Please note there will be a question and answer session following the company's formal remarks. The company would like to note that there will be a limited time frame for Q&A, and as such, management kindly requests that each individual ask one question to try to accommodate all. I will now turn the call over to your host for today's call, Jacob Johnson, Vice President of Investor Relations for Repligen.

Thank you, Operator, and welcome everyone to our 2026 First Quarter Report. On this call, we will cover business highlights and financial performance for the three-month period ended March 31st, 2026, and we'll provide financial guidance for the full year 2026. Joining us on the call today are Repligen's President and Chief Executive Officer, Olivier Lilliot, 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 risk 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 10Q, our annual report on Form 10K, our current reports, including the Form 8K 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 Repligen's website and on sec.gov. Adjusted non-GAAP figures in today's report include the following, 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, other income or expense, tax rate on pre-tax income, net income, diluted earnings per share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin. 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. With that, I'll turn the call over to Olivier.

Thank you, Jacob. Good morning, everyone, and welcome to our 2026 first quarter call. We are delighted to share our first quarter 2026 results. Great execution once again by our team enabled us to deliver 15% reported revenue growth or 11% organic and 160 basis points of adjusted operating margin expansion. Mid-teens top line growth coupled with disciplined cost management resulted in margins outperforming expectations. In addition to our strong financial performance in the quarter, we advanced several key strategic priorities. This includes the launch of our transformation office, the associated sale of the Polymem business, and a new partnership in China. This OEM relationship advances our strategy in the country, where we are seeing significant growth again. I'll touch on each of these initiatives in more detail shortly. As I reflect on our end markets and company today, it's encouraging to see the strengths we're seeing across all of our customer segments. The talented and experienced team we have assembled is executing fiercely on our differentiated strategy. This has resulted in a very rich high probability opportunity funnel that just needs to be coupled with faster customer decision making. We did see encouraging signs in the first quarter and remain convinced the capital equipment tap will open. We delivered 194 million of first quarter revenue driven by healthy demand across our board portfolio and all geographies. Analytics led the way with 50% plus growth, but all of our franchises grew nicely again in the first quarter. Consumables, including proteins, grew double digit, which was coupled with solid capital equipment growth, and services remained a standout with 30% plus growth. Capital equipment demand benefited from strength in analytics, mixers, and easier comps. We also saw growth across our diversified customer base and all geographies. All the trends were solid in the first quarter, with a significant pickup in March, and included some conversion of our robust capital equipment funnel. Our first quarter results and these recent order trends reinforce our confidence in our full-year revenue outlook. Jason will provide more details. We are reiterating our expectation for 9% to 13% organic growth while updating our reported revenue guidance to reflect the sale of our non-core and low-margin polymem business. This reduces our full-year revenue outlook by $7 million, but improves our margin outlook. In addition, given our strong first quarter performance, we are increasing our adjusted earnings per share guidance for the full year. We remain excited about our differentiated product portfolio, the global team we've built, and the strategy we're executing. As we look ahead to the next several years, we see a number of opportunities across our portfolio that position us for robust growth and allow us to continue to outpace the market. Looking at our performance by end market, we saw widespread strengths across our customer base. CDMO revenues grew mid-teens, with similar growth across both Tier 1 and Tier 2. Biopharma revenues also grew, despite a very difficult comparison. we saw notable growth outside of large pharma, including 20% plus growth from emerging biotechs. We continue to be encouraged by growth from this customer base, though demand remains below historical levels. OEM and integrator demand was very robust given growth in fluid management. From a geographic point of view, we saw strength across all regions led by Asia Pacific. This included a near doubling of revenues in China with our best revenue quarter in the country in over two years. This is a testament to the team we've put in place. Asia Pacific remains a key strategic region, and I will discuss the progress on our strategy in China shortly. As expected, new modalities were dilutive to growth given the gene therapy headwind we previously discussed. We continue to see healthy growth in cell therapy and also in gene therapy when excluding that specific headwind. I wanted to update you on the following three strategic initiatives. First, as we have emphasized recently, we are committed to expanding margins while balancing the efforts needed to support future growth. In an effort to accelerate both of our fit for growth journey and our path to 30% adjusted EBITDA margin by 2030, we have formed a transformation office that will ensure we have the right prioritization and resources focused on these critical initiatives. Key focus areas under this program include efforts to optimize our manufacturing footprint for increased cost efficiency, improving the profitability of certain product lines through targeted productivity and rationalization, continuously improving service to our customers, and efforts to capture the value of our differentiated products And finally, acceleration of our IT modernization and AI implementation across all functions. Jason will walk you through more details, but in terms of financial impact, we estimate this effort should result in at least one point of annualized margin benefit by the end of 2027. We remain committed to our goal of doubling the business and expanding margin while further progressing our fit for growth capabilities. The Transformation Office will enable us to achieve and accelerate all of this. So most of these initiatives have just kicked off. We're happy to share that as part of these efforts, on March 30th, we divested the Polymem operation in France for nominal proceeds. While this facility was a key contributor to Repligen's ability to supply product during the pandemic, the business has since reverted to non-core cells outside bioprocessing and has operated at a net loss. In 2025, Polymem generated $7 million of revenue and an adjusted operating loss. The new owner will offer synergies in the common market in which they operate. Second, we remain more excited than ever by our growth opportunity in Asia. In fact, Jason and I recently returned from a week-long visit to the region where we met with both key customers and our Asia leadership team. We are building a great team and continuing to gain traction with key customers in the region. We are also thrilled to announce that while in the region, we signed a critical partnership to expand our capabilities and local presence in China. The partnership outlines an OEM relationship that will increase our competitiveness and access to local manufacturing beginning in 2027. It will be a multi-phase and multi-product arrangement that we expect to expand over the coming years. After our trip, we have more conviction than ever that China will be a meaningful player in biopharma for years to come. Finally, I want to comment on our IT investments and digitization journey. On our last call, we mentioned investment in our IT organization in 2026 as part of our Feed for Growth journey. We have made key additions to our team this year including new data management and AI experts. We have implemented AI across a variety of functions, including but not limited to legal, commercial, and supply chain. And as part of our transformation office, we're also working to further optimize our data infrastructure, which will allow us to better implement AI in the coming years. To support our customers, Our analytics franchise is well positioned for an increasingly digital environment. Our PSE product portfolio allows for the collection of both upstream and downstream data in real time. We have integrated our Flow VPX into our downstream filtration system and are working to replicate this on the upstream side. We announced a partnership with Novasign last year and are working to integrate their digital twin capabilities into our next-generation small-scale filtration systems. We see digitization as a multi-year journey, and it remains a key strategic focus area for our company. Before I turn the call over to Jason, I'll provide some more detail on our franchise-level performance. Starting with filtration, revenue grew mid-single digits on a reported basis in the quarter, driven by freed management, ETF, and other consumables. Excluding the gene therapy headwind, this franchise would have delivered double-digit growth. With the sale of Polymem, we now expect filtration growth to be roughly mid-single digits in 2026 on a reported basis. This also contemplates a moderated ATF outlook in 2026 due to customer-specific timing dynamics that are expected to be a tailwind in 2027. As a result, We see ETF returning to strong growth in 2027 and beyond, and we continue to see overall healthy consumable demand across our portfolio. We remain extremely confident in our process intensification leadership position. After over a decade of seeding our ETF technology, we have built a high amount of trust from the biopharma industry. We will continue to prioritize further innovation and advancements that will allow us to remain the industry's partner in process identification. Chromatography revenue increased over 25% driven by growth in Opus columns. We continue to win new customers globally as they appreciate the plug and play convenience of prepack columns. Given the traction we're seeing in Opus, we now expect 20% plus growth in chromatography in 2026. With this outlook, we do expect a slightly higher mix of chromatography revenue versus our initial expectations. It was a great quarter in proteins with mid-teens growth on top of a very strong prior comparison. We saw healthy demand across our offerings led by our ligands, reflecting the benefits of the strategy we put in place to control our own destiny in proteins. we expect protein growth of at least low double digits for the year. Our analytics franchise had another phenomenal quarter with 50% plus growth. This was led by notable strength in our downstream analytics offering, which had a record quarter. This benefited from strong demand for our solo VP plus, including new placements and upgrades. We continue to assume analytics growth of 20% plus given momentum in downstream demand and a growing contribution throughout the year from our upstream analytics offering. To wrap up, we are very pleased with our start to 2026. We delivered 11% organic growth in the first quarter, which is right in line with the midpoint of our full year guidance. This, coupled with operating expense discipline has reinforced our confidence in our full-year revenue outlook and enabled us to increase our adjusted earnings per share guidance. In addition, we made tangible progress on our strategic priorities, which positions us well to drive robust growth and margin expansion in coming years. Now, I turn the call over to Jason for the financial highlights.