Qiagen N.V.

Ladies and gentlemen, thank you for standing by. I am Katie, your GlobalMeet call operator. Welcome and thank you for joining QIAGEN's Q2 2025 Earnings Conference call webcast. At this time, all participants are in a listening mode. Please be advised that this call is being recorded at QIAGEN's request and will be made available on their internet site. The prepared remarks will be followed by a question and answer session. If you would like to ask a question, you may press star 1 on your touch-tone telephone. Please press the star key followed by zero for operator assistance. At this time, I'd like to introduce your host, John Ghilardi, Vice President, Head of Corporate Communications at QIAGEN. Please go ahead.

Thank you, operator, and welcome to all of you to our call today for the second quarter of 2025. We appreciate your time and interest in QIAGEN. Joining me today are Terry Bernard, our Chief Executive Officer, and Roland Sakras, our Chief Financial Officer. Also joining us is Dr. Dominica Martorano from our IR team. Today's call is being webcast live and will be archived in the IR section of our website at www.trygen.com. A copy of the results press release and the presentation are also available on our website. Before we begin, please note that this call will include forward-looking statements. Actual results may differ materially from those projected due to a number of factors outlined in our most recent Form 20F and other filings with the U.S. Securities and Exchange Commission. We will also refer to certain financial measures not prepared in accordance with U.S. GAAP that provide additional insights into our performance. Reconciliations to the most directly comparable GAAP figures are in the release and presentation. All references to earnings per share refer to diluted EPS. And with that, let me turn over the call to Terry.

Thank you, John. And hello, good morning, good afternoon, or good evening to everyone around the world. Thanks again for joining us. QIAGEN delivered another clean and solid quarter in Q2 of 2025. Indeed, our sales growth is among the highest in the industry, And on top of that, we are increasing our outlook for the year. This performance reflects focused execution and gives us confidence to deliver on our upgraded 2025 targets. We are building a solid foundation to deliver more growth in 2026 on our path for solid and profitable growth against our 2028 targets. So let me walk you through our four key messages for today. First, we exceeded our outlook for Q2 with solid growth and improved profitability. Net sales rose 7% to $534 million, with 6% growth at constant exchange rates. Core sales are a more important metric for QIAGEN since they exclude discontinued products like pneumodics and diarrhea nodes. Those cells also grew 6% CER over the same period in 2024. Adjusted diluted EPS was 60 cents and 62 cents at CER ahead of our target and driven by the strong improvements in operational profitability. Second key message, our growth pillars perform strongly. Kayastat grew 41% at CER. This was driven by strong instrument placement that once again exceeded our quarterly goal of at least 150 systems. We continue to see solid demand across all regions and benefits from our menu expansion initiatives for syndromic testing. Quantiferon grew 11% CER, supported by solid gains in the Americas, but also in EMEA, as we maintain momentum in driving conversion of latent TB testing for the traditional skin test. Let us remember that around 60% of the global market still relies on the skin test. and this underscores the significant remaining potential for conversion. Kayakuity, our digital PCR platform, delivered double-digit CER growth and supported by healthy demand for consumables, companion diagnostic deals, while instrument placements were slightly below the prior year reflecting cautious capital spending trends among customers. QIAGEN Digital Insights, our bioinformatics business, maintains momentum in a challenging environment. Here, we expect new growth impulses from the acquisition of Genox and the Franklin Cloud platform for AI-driven interpretation of next-generation sequencing data for clinical labs. and in sample technologies. Although total sales were flat against the second quarter of 2024, we saw solid mixed single digit growth in automated consumables. Our teams are moving ahead to launch three new platforms with first SAIT in late 2025. Third key message. We have upgraded our full year 25 sales outlook based on this solid start to the year in a complex and volatile macro environment. We now expect 4% to 5% net sales growth at constant exchange rates, up from the previous target for about 4% growth. More importantly, we are now expecting 5% to 6% CER growth in our core portfolio, up from the prior outlook for about 5% growth. We are also confirming the adjusted earnings per share outlook of about $2.35 at CER, which, as you remember, we upgraded in April and represent an increase of $0.07 compared to our initial guidance for the year. So amid this external volatility, we remain focused on execution and agility to deliver on our targets and capture the right growth opportunities. And as a fourth point, we have an expanded range of ways to create value for shareholders, customers, and other stakeholders. Following our annual general meeting in June, we paid our first ever annual dividend and now have authorization for another synthetic share repurchase of up to $500 million over the coming 18 months. With about $650 million already returned to shareholders since 2024, we are well on track. to reach our goal of returning at least $1 billion to shareholders by the end of 2028, absent once again of significant M&A. At the same time, we are continuing to invest organically in the business. Our teams are also actively reviewing value-creating M&A opportunities. Our differentiated portfolio across diagnostic and life sciences is indeed strong and performing well. This is reflected in a strong record of execution and a clear commitment to implementing and executing on our strategy and creating value.