Bio-Rad Laboratories, Inc.

Ladies and gentlemen, thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to BioRat's first quarter 2026 results conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I would now like to turn the conference over to Ruben Argueta, BioRat's head of investor relations. You may begin.

Thank you, Regina. Good afternoon everyone and thank you for joining us. My name is Ruben Argueta, Bio-Rad's new head of IR. It's a pleasure to join the team and be with you here. Today we will review the financial results for the first quarter ended March 31st, 2026 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 Rup Lakharaji, Executive Vice President and Chief Financial Officer. Before we begin our review, I would like to remind everyone that we will 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. In addition to excluding certain atypical and non-recurring items, our non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG in order to provide investors with a better understanding of Bio-Rad's underlying operational performance. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release. We have also posted a supplemental earnings presentation in the investor relations section of our website for your reference. With that, I will now turn the call over to our Chief Operating Officer, John DiVincenzo.

Thanks, Ruben, and welcome to the team. Good to have you here. And good afternoon, everyone. Thank you for joining us. In the first quarter, our teams executed within a dynamic operating environment. We reported Q1 results within our revenue guidance as we navigated several external pressures, most notably associated with the ongoing conflict in the Middle East. This region has been one of Bio-Rad's fastest growing markets for several years. We haven't highlighted this in the past, but in 2025, the region represented over 9% of our diagnostic segment, primarily driven by our blood typing franchise. The conflict substantially reduced our first quarter of 2026 revenues, and depending upon the timing of resolution, will be a significant headwind for revenue and margin for full year 2026. Despite the macro headwinds, our teams remain focused on executing our strategic initiatives, accelerating innovation, and driving further efficiencies across the organization to increase competitiveness. In life science, reported net sales were flat, reflecting mixed and market conditions. Academic demand remained constrained, particularly in Americas, where our customers' budgets have been significantly impacted by changes in funding. While NIH funding increased modestly year over year, our Voice of Customer Pulse surveys indicate that behind the scenes, there continues to be considerable disruption, and we continue to see a lag between funding approvals and purchasing activity. In biopharma, we are seeing early signs of stabilization. Early-stage biotech remains cautious However, activity among later stage companies is more robust. We expect gradual improvement through the year. On the commercial side, ensuring we capture our fair share of demand in a constrained market requires our sales organization to work differently. We have sharpened the focus of our commercial teams on segment level prioritization, directing coverage towards customers with active funding, accelerating conversions from our existing install base, and competing aggressively where competitive displacement opportunities exist. Our digital PCR product area continues to be a strategic differentiator. In the quarter, DD PCR instrument revenue grew 24% over prior year. This is an encouraging leading indicator since new customers typically drive consumable pull-through within six to 12 months of purchase and installation. The new QX700 platform is driving both competitive wins and conversion from qPCR, supported by an extensive assay menu and expanding publication base. And ahead of schedule, the team now has enabled over 99% of our digital PCR assays to be available on the new QX700 series, which is driving instrument growth. Looking ahead, we continue to expect a measured recovery in life science led by biopharma. In clinical diagnostics, we delivered modest reported growth of just under 2%. As I mentioned earlier, performance in the quarter was impacted by geopolitical disruption in the Middle East, which affected both demand and logistics. While this creates near-term challenges, we expect eventual market normalization once the conflict is resolved. Outside of this region, the segment performed as planned. In particular, demand for our quality systems and immunohematology franchises shows signs of strength. From a margin standpoint, diagnostics was adversely affected by a disproportionate share of supply chain cost pressures. In light of these continuing supply chain challenges, we understand the need to rationalize manufacturing capacity and network. We're also addressing these challenges through focused actions in procurement and manufacturing. Turning to our operational priorities. We are executing against a clear agenda focused on improving agility, resiliency, and efficiency across the company. In our effort to become more agile, we are increasing flexibility in our manufacturing footprint. During the quarter, we began manufacture of select life science instruments in China for China, improving responsiveness to local market demand and allowing us to compete in tenders while minimizing tariff exposure. This initiative is indicative of how we are using efficient capital deployment to build operational capabilities for long-term business continuity. In R&D, we have re-engineered our innovation engine to deliver improved return on investment. Following our portfolio prioritization decisions, we are concentrating investment in areas with the strongest commercial potential. As I mentioned earlier, one example of this prioritization is the fact that 99% of our digital assets are now supported on a new QX700 platform. again ahead of plan. As we prioritize our projects, our focus areas are expanding into high-growth clinical applications leveraging our GD-PCR technology, advancing our digital PCR portfolio including our next-gen system and oncology assays, and embedding AI capabilities to accelerate development and enhance platform performance. While it is early, This focus allows us to deliver more consistent, higher quality growth over time. So in closing, we are executing with discipline in a challenging environment. We are making progress in the operational actions within our control, improving supply chain capability, strengthening execution, and focusing investment where it matters most. We remain confident that these actions will translate into improved financial performance over time. And with that, I'll turn the call over to Rup.