Bio-Rad Laboratories, Inc.

Ladies and gentlemen, thank you for standing by. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to BioRad's second 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, BioRad's head of investor relations. You may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today we will review the financial results for the second quarter ended June 30, 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 Roop Lakkaraju, 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. Good afternoon, everyone, and thank you for joining us. Total company revenue in the second quarter was approximately $651 million, essentially flat as reported and down 1.9% on a currency neutral basis compared with the prior year. Sequentially, revenue was up 10%. reflecting improved performance as our teams overcame challenging end market dynamics in the first quarter. Clinical diagnostics returned to modest currency neutral growth, led by quality controls in our blood typing portfolio. In life science, results continue to be affected by softness in the academic research market. Excluding process chromatography, life science revenue was approximately flat on a currency neutral basis, representing an improvement in the segment's underlying trend. Digital PCR was a particular area of strength, growing 6% in the quarter. In the academic and government market, demand remains below historical levels, particularly in Americas. NIH funding outlays have begun to increase year over year, but purchasing activity typically lags funding. The recent indicators are encouraging, but we need to see a more sustained pattern before concluding the market has entered a durable recovery. In biopharma, We are seeing early signs of stabilization, consistent with broader industry commentary. Improvement is most evident among later stage and commercial scale biotech customers, where early stage biotech companies remain more cautious as funding conditions have not yet fully normalized. Taken together, these indicators suggest the market is beginning a gradual recovery. Process chromatography, which represents less than 5% of Bio-Rad's total annual revenues, was sequentially up in decline year-over-year as expected. As a reminder, our current niche position in the polishing step of bioprocessing contributes to revenue concentration from a select number of commercial therapeutics and vaccines. For the remainder of the year, we expect the second half to mirror the first half. Turning to our regional performance, America's remains soft, primarily due to continued pressure in the academic market. However, we saw improvement as we entered the quarter, and our teams are now cautiously optimistic as we enter the second half of the year. Asia Pacific, excluding China, grew 6% on a currency-neutral basis, with growth across most major product areas. China, which represents approximately 6% of Bio-Rad's total revenue, declined in the high teens, reflecting the timing of quality control orders and softer demand for life science instruments. For the remainder of the year, continued life science softness, coupled with order timing and clinical diagnostics, are expected to create an approximate $4 million headwind. That impact is already incorporated into our full year guidance. We continue to adapt our business model to the changing market environment. Our in-China, for-China manufacturing capability is operational, and we are now participating in a broader range of tenders. Over time, these actions should improve our competitive profile in the China market. for a mere return to growth, with Middle East revenue increasing 7% year-over-year. Channel partners began replenishing approximately $3 million in inventory during the quarter, although underlying customer demand has not yet stabilized. The continuing conflict in the region has driven higher fuel and transportation costs globally. We want to recognize our teams for navigating these challenges while continuing to support our customers and channel partners. Volatility in the region is expected to continue during the second half, which is reflected in our guidance. Moving beyond the Middle East, our digital PCR franchise continues to be an important strategic differentiator for Bio-Rad. Currency-neutral GDPCR revenue increased 6% year-over-year, with instrument revenue growing more than 20%. The QX700 continues to generate competitive wins and conversions from qPCR. supported by Bio-Rad's broad assay menu, industry-leading install base, and expanding body of scientific publications. Digital PCR consumables revenue was down slightly year-over-year, but increased sequentially. Consumables pull-through has not yet reached the level we ultimately expect. However, the strength in instrument sales is an encouraging indicator of customer demand and establishes a larger foundation for future recurring consumables revenue. We have also reached the first anniversary of our acquisition of Stila Technologies. The expanded portfolio has accelerated revenue growth and is delivering margin performance ahead of our original expectations. The progress reinforces our approach to discipline-focused M&A. Acquiring differentiated commercial products that strengthen our portfolio, complement our existing capabilities, and create durable value. Turning to our operational priorities, since 2024, we have been working to make Bio-Rad a faster, more agile, and efficient enterprise. Earlier this week, we announced the next phase of that work, including changes to our organizational structure, workforce, and physical footprint. These actions are designed to reallocate resources toward the capabilities most important to our future. Cost savings are one outcome, but this is not simply a cost reduction program. We are reshaping the organization. strengthening critical capabilities, simplifying how work gets done, and directing more of our resources toward innovation, customer needs, and sustainable growth. Artificial intelligence is an important enabler of our transformation. Employees are using AI to accelerate analysis and decision-making, and we are seeing tangible results. For example, agentic AI enabled our product development teams to complete 12 months of software development in just six weeks. In another instance, our teams developed new cloud-based functionality in approximately one month, avoiding thousands of hours of conventional engineering work. In closing, the second quarter demonstrated meaningful sequential progress. Clinical diagnostics returned to growth, underlying life science trends improved, and digital PCR delivered strong instrument performance. At the same time, we recognize that several end markets continue to evolve and that we must continue to improve how Bio-Rad operates. The organizational actions announced this week are the next step in an ongoing process to build a faster, leaner, and more competitive company with resources and capabilities closely aligned to innovation, customer needs, and growth. With that, I will turn the call over to Roop.