Bio-Rad Laboratories, Inc.

Hello, everyone, and welcome to today's BioRad third quarter 2024 results conference call and webcast. At this time to get started, all participants are in a listen-only mode, but later you will have the opportunity to ask questions during the question and answer session. You may register to ask questions at any time by pressing the star and one on your touchtone phone. Please note today's session is being recorded, and I'll be standing by should you need any assistance. It is now my pleasure to turn the floor over to Head of Investor Relations, Edward Chung. Welcome, sir.

Good afternoon, everyone, and thank you for joining us. Today, we will review the third quarter 2024 financial results and provide an update on key business trends for Bio-Rad. With me on the call today are Norman Schwartz, our Chief Executive Officer, John DiVincenzo, President and Chief Operating Officer, and Rubalak Raju, Executive Vice President and Chief Financial Officer. Before we begin our review, I'd like to remind everyone that we'll be making forward-looking statements about management's goals, plans, and expectations, our future financial performance, and other matters. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Our actual results may differ materially from these plans, goals, and expectations. You should not place undue reliance on these forward-looking statements, and I encourage you to review our filings with the SEC where we discuss in detail the risk factors in our business. The company does not intend to update any forward-looking statements made during the call today. Finally, our remarks today will include references to non-GAAP financials, including net income and diluted earnings per share, which are financial measures that are not defined under generally accepted accounting principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release. With that, I'll now turn the call over to our CEO, Norman Schwartz.

Thanks, Ed. We certainly appreciate all of you joining us on the call today. To start, I mean, maybe the best way to start out to say we had a solid quarter, revenue better than what we had targeted, and margins ahead of expectations, all driven by product mix, productivity gains, and good cost management. Looking at our markets, the third quarter reflected a continuation of the market trends we've experienced over the last year across our business segments. It was nice to see our clinical diagnostics business back to normal, delivering stronger than expected year-over-year growth in the quarter. And I would say growth was broad-based across the portfolio in all regions, with an outsized contribution of our quality control portfolio in Asia Pacific helping to drive performance. While largely in line with expectations, our life science group continues to experience a modest pace of recovery, reflecting ongoing soft demand in biotech and biopharma and in China. We increasingly believe that the gradual pace of recovery likely continues into 2025 and weighs on the uptake of life science instrumentation over the coming quarters. Similar to the prior quarter, our process chromatography materials posted year-over-year decline related to ongoing destocking activities at several very large customers who previously overstocked due to the critical importance of our products for specific key therapeutics. Outside of these customers, we are starting to see a return to normalized ordering patterns and continue to anticipate a return to growth for our process media portfolio in 2025. Our Droplet Digital PCR franchise grew mid-single digit in the quarter, and was bolstered by additional IP-related royalties. I would say despite the ongoing constrained funding environment for instruments, our DD-PCR reagents and consumables continue to expand both quarter over quarter and year over year. Overall, we're continuing to see strong interest in our recently launched DD-PCR assays targeted at the oncology and at the cell and gene therapy markets, and continue to maintain a strong win-loss and loss ratio for our digital PCR platform in our current market segments. Well, we were pleased to see the positive trend for capital raises for biotech and biopharma markets continuing into the third quarter. I would note that customers remain cautious on the funding environment and conservative on capital deployment. Likewise, large pharma continues initiatives to reduce operating expenses in the form of corporate restructuring and R&D reprioritization. In the academic segment, we are seeing a slightly softer global funding environment after what I would call a long period of strong research support. In addition to the slightly lower than anticipated NIH budget for the year, key European markets, I would say, remain mixed with lower funding in Germany and the UK, offset by modest improvements in places like France and some other EU countries. And of course, the Asia Pacific remains challenging, reflecting the ongoing economic headwinds there. Operationally, we continue to progress our corporate transformation with efforts in supply chain and core process improvements, continuing to support our stronger margins. Of note during the quarter, we opened a new Asia distribution center in Singapore, which is a key component of our logistics network. This hub allows for efficiencies, enabling direct shipments to all Asia Pacific regions and generally simplifies our network and improves customer service levels. We also continue to expand applications both directly and through partnerships to advance our droplet digital PCR platform. We made an additional equity investment in Oncocyte focused on transplant rejection monitoring and launched the next in a series of VeriCheck assays internally aimed at supporting the safe and effective production of cell and gene therapies. And related to the continuum QX DDPCR platform in development. While we previously expected to launch in Q4, we've now taken the decision to postpone its introduction. So once we have a better line of sight for introducing the platform, we'll provide you an update on that. Additionally, we completed the acquisition of Saber Bio, a novel platform utilizing our core droplet technology that enables high throughput discovery of novel antibodies and T cell receptors. On balance, I would say our cost and productivity initiatives have paid dividends despite the challenging markets. And as we look forward and think about eventual market normalization for our life science business, We believe that Bio-Rad will further benefit from that top line leverage. So that about sums it up for me. I'd now like to turn it over to John. John?