Qiagen N.V.

Ladies and gentlemen, thank you for standing by. I am Shelly, your global meet operator. Welcome and thank you for joining QIAGEN's Q2 2026 earnings conference call webcast. At this time, all participants are in a listen-only mode. Please be advised that the call is being recorded at QIAGEN's request and will be made available on their internet website. The prepared remarks will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone keypad. Please press the star key followed by zero for operator assistance. At this time, I would like to introduce your host, Daniel Wendorff, Vice President, Head of Investor Relations at QIAGEN. Please go ahead.

Thank you, operator. and welcome to our call for the second quarter of 2026. We appreciate your time and interest in QIAGEN. Joining the call today are Thierry Bernard, our chief executive officer, and Roland Sackers, our chief financial officer. Also joining us is Dr. Dominika Matarana from our Investor Relations team. As always, today's call is being webcast live and will be archived in the Investor Relations section of our website at www.qiagen.com. where you can find the press release and presentation accompanying this call. Please also 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. generally accepted accounting principles or GAP. that provide additional insights into our performance. Reconciliations to the most directly comparable gap figures are in the release and presentation. All references to earnings per share refer to adjusted diluted EPS. With that, let me hand over the call to you, Thierry.

Thank you, Daniel. Hello and good morning, good afternoon or good evening, depending on where you are in the world. And thank you for joining us. Let me start by thanking again our teams across QIAGEN for their continued dedication and disciplined execution. Their focus enabled us to deliver results above our outlook while continuing to invest in our portfolio and focus on profitable growth. Let me now walk you through our key messages for today. We exceeded our outlook for both sales and adjusted EPS. Net sales were $535 million and unchanged on both a reported basis and at CER. This was ahead of our outlook for an approximately 2% decline CER. Adjusted diluted EPS was 62 cents on both a reported basis and at CER again, above our outlook of at least 60 cents at CER. Those results demonstrate the resilience of our business and provide further confidence in our outlook for the year. Second key message. Our growth pillars delivered 5% growth at CER, probably above market growth. Sample technologies led the quarter, reflecting continued demand for our sample preparation solutions. Kayaquiti delivered another solid quarter, driven by healthy consumables demand. QDI, our bioinformatics business, also performed well led by our clinical application. Quantiform return to growth as solid demand across many testing groups more than offset the significant decline in U.S. immigration testing demand. This U.S. immigration testing demand decrease is what we highlighted at the end of our Q1, 2026. Chiostat diagnostic. was impacted by a challenging prior year comparison in respiratory testing, partially offset by continued strong growth in our gastrointestinal and meningitis-encephalitis panels, with the gastrointestinal panel performing particularly well. Third key message, we maintain a very high level of profitability. This reflects our ability to improve efficiency. while continuing to invest for future growth. Fourth, we continue to generate strong cash flow providing the financial flexibility to invest in the business while returning capital to shareholders. This financial strength enabled us to increase our annual dividend by 40% in 2026. And this brings me to my final key message for today. Our outlook for 2026. We are reaffirming our full year outlook and remain confident in stronger growth during the second half of the year. The continued performance of our growth pillars and the progress we are making across our portfolio reinforce our confidence in delivering the outlook we have set for the year. With that, I'll turn over to Roland for more details on the financials.

Thank you Thierry and hello everyone. As Thierry highlighted, we delivered a better than expected second quarter, exceeding our outlook for both sales and adjusted diluted EPS while maintaining a high level of profitability. Let me start with our sales performance across the four product groups. Time to technology was 9% CER, driven by automated consumables and higher instrument sales compared to the year-ago period. Diagnostic solutions declined 2% at CER. Quantiferon returned to growth at 1% CER as solid demand across most testing groups more than offset reduced immigration testing demand primarily in the US and Middle East. Chiostatic sales declined 7% at constant exchange rates despite growth in GI and meningitis panels. This was more than offset by lower respiratory panel cells against the challenging prior year comparison previously communicated. In PCR and nucleic acid amplification, case declined 8% at CER. Our digital PCR system, ChiAcuity, delivered double-digit growth at CER driven by strong consumables demand. This was more than offset by weaker OEM demand.

Ladies and gentlemen, we apologize for the pause in the presentation. Please remain on the line and you'll hear music until the presentation resumes. You may continue.

Okay, thank you. Sorry for that. I looked like we had some technical difficulties, but I do think we're now back on a call. So let me continue. In PCR and nucleic acid amplifications, sales declined 8% at CR. Our digital PCR system, Chiacuity, delivered a double-digit group at CR, driven by strong consumables demand. This was more than offset by weaker OM demand. In the genomics and NGS product group, Sales rose 2% CER. Kaijin Digital Insights delivered solid single digit growth, while consumables for universal NGS panels used on third-party sequencers grew more than 20% CER. Lower sales of other genomics products moderated the overall growth rate. Regional performance was mixed during the quarter. Sales in the Americas rose 1% CER. led by 2% growth in North America, while sales declined in Brazil and Mexico. In the EMEA region, sales declined 2% CER. While Spain, Belgium, and Poland were up in the quarter, Germany, France, and Italy were down. In the Asia-Pacific region, sales declined 2% CER, excluding China. The region grew at a low single-digit rate at constant exchange rates, supported by high teens growth in Japan, while China was down in the low teens. Sequentially, sales in China improved at a double-digit percentage rate. Moving down the income statement. Profitability remained at a high level. Adjusted operating income declined 2% and reached $157 million. The adjusted operating income margin was 29.4% compared with 29.9% in the second quarter of 2025. Disciplined cost management and efficiency gains helped offset gross margin headwinds. The adjusted gross margin was 66.2% in the quarter compared with 66.7% in the prior year period due to changes in product mix. Operating expenses remained broadly stable as a percentage of sales. Sequentially, the adjusted operating income margin increased by 200 basis points from 27.4% in the first quarter of 26 with higher operating leverage contributing to the improvement. Adjusted diluted EPS was $0.62 at constant exchange rates exceeding the outlook of at least $0.60 at CER. The adjusted tax rate was 18% in the quarter in line with our target of 17% to 18%. The high level of profitability also translated into solid cash generation. Operating cash flow was $301 million for the first six months of 26, unchanged from the same period of 25. This was achieved despite approximately $20 million of cash payments for efficiency and restructuring programs and a planned increase in inventory. Cash generation was supported by disciplined work in capital management and a higher level of profitability. improved the serial goods collection and other working capital movements helped offset the inventory build. Day sales outstanding improved to approximately 55 days from approximately 57 days at the end of 25. Day's inventory outstanding increased to 153 days from 149 days at the end of 25, reflecting inventory build in preparation for new product launches. Our high level of profitability and cash generation continues to support a strong balance sheet. This gives us the flexibility to invest in innovation, pursue targeted acquisitions, and return capital to shareholders. In line with this approach, we completed a $500 million synthetic share repurchase in January and paid our second annual dividend of around $72 million in July. The dividend per share increased by 40% to $0.35 from $0.25 in 2015. We said that we had back the code to create.

Thank you, Roland. And let me now highlight some of the recent progress of our teams in our portfolio. Let's start with sample technologies. We continue to make good progress with our automation strategy as more laboratories transition from manual to automated sample preparation. With the commercial launch of Kaya Symphony Connect, our new IVD-compliant automation system, we reached another important milestone in expanding our automation portfolio. We have started also placing Kaya Sprint Connect and are pleased with the number of placements, the high level of customer acceptance, and the very positive initial feedback, especially from Pharma Company. Kaya Mini, our third launch for this year remains on track for launch this fall with Betafield testing beginning in North America in the coming weeks. We are also making very good progress in single-cell analysis with PARS. We recently launched the next generation of immune profiling solutions, further expanding our single-cell offering. was also selected for a NASA-supported research program aboard the International Space Station, supporting research into new treatments for cartilage injuries. Together, those developments show how we are broadening our portfolio while enabling new areas of research. Turning to Quantiferon, at our spotlight session in May, We outline how we are preparing Quantiferon for the next phase of growth in latent tuberculosis testing. As latent tuberculosis screening continues to expand, laboratories are looking for more efficient ways to manage growing testing volumes. Together with Diasorin and our new automation partner Impeko, We plan to launch the first fully automated sample-to-inside workflow in the second half of 2027. This combines sample handling, incubation, and detection into one purpose-built automated workflow for quantiferon testing. We are also developing an AI-enabled tool to help assess the risk of progression to active TB, providing clinicians with additional insights beyond the detection of latent TB infections. This is how we continue to innovate around QuantiFERON, creating additional value for laboratories and clinicians. On KyaSTAT, we continue to expand the menu into new testing areas. Bloodstream infections require rapid treatment decisions. With the launch of our two new BCID panels, Chiastat now expands into bloodstream infection testing in Europe, providing laboratories with broad coverage across relevant pathogens and antimicrobial resistance markers. Together, those two panels detect 33 pathogens and 28 antimicrobial resistance markers in about one hour time to result. The next step is to bring those panels to the U.S., and we are confident to get our FDA approval by the end of the year. We are also seeing the value of menu expansion for chiostat in the field. An example is that during the ongoing cyclospora outbreak in the U.S., our large gastrointestinal panel is helping laboratories respond to increasing testing demand. Turning to digital PCR and QIAquity now, we continue to advance digital PCR across research, biopharma, and clinical application. As more customers are moving from qPCR to digital PCR, they are looking for workflows that are scalable, automated, and easy to standardize. This is why we continue to expand the QIAquity portfolio. In the second half of the year, we are launching new gene expression assays together with a high multiplex kit for the analysis of up to 12 RNA targets in a single reaction. We are also expanding our cell and gene therapy offering with new software and broader workflow automation through our collaboration with Hamilton. We recently demonstrated again the flexibility of K-acuity during the recent Ebola outbreak. where we rapidly introduce custom digital PCR assays to support infectious disease research and surveillance. Finally, let me touch on QIAGEN digital insights development. AI is becoming increasingly important in biomedical research as researchers work with growing amounts of data. But AI is only as valuable as the scientific knowledge behind it. This is where QDI, QIAgen Digital Insights, comes in. We combine more than 25 years of curated biomedical knowledge with AI to turn complex biological data into meaningful insights. We, for example, recently announced a new collaboration with NVIDIA. We are combining our curated biomedical knowledge with accelerated computing and graph-based AI. This will help researchers all over the world accelerating drug discovery. With that, let me hand it back to Roland with the details of our outlook for the second half of the year.

Thank you, Thierry. Let me now provide an update on our outlook for 26 and the third quarter. For the full year, We are reaffirming our outlook for total net sales growth of about 1-2% at CER. We also continue to expect adjusted diluted EPS of at least $2.43 at CER. For the third quarter, we expect total net sales growth of about 1-2% CER and adjusted diluted EPS of at least $0.62 at CER. I would like to give you some additional perspectives on the expected performance in the second half of the year. We expect CER sales growth to improve from minus one percent in the first half to about three to four percent in the second half. This represents a sequential improvement of approximately four to five percentage points. There are three main drivers behind this development. The end of the year-on-year headwinds from the discontinued NeumodX and Dynaludix portfolio is expected to contribute approximately two percentage points to the improvement in the second half. Second. We expect approximately another 2 percentage points from increasing contributions from new sample tech systems and other recent and planned product launches. These include Kaya Symphony Connect and Kaya Spin Connect in sample technologies. The rollout of our new BCID panels and continued momentum in companion diagnostics for Kaya STAT DX and additional offerings for Kaya QT. As mentioned earlier, But Ferron delivered a stronger second quarter. We continue to believe that we are tracking towards our $500 million target for 26. This easier comparison is expected to support performance in the fourth quarter. Third, we expect approximately half a percentage point from the combined benefits of PaaS, which is performing ahead of our original 26 sales target of about $40 million. and modestly improving trends in the U.S. life science environment. Within the second half, growth is expected to be weighted towards the fourth quarter, which benefits from the incremental contributions from the previously mentioned product launches and an easier prior year comparison following the disruption caused by the U.S. government shutdown in the fourth quarter of 2025. The expected allocation towards the second half is also consistent with our historical sales phasing. Approximately 47% of our full-year sales are generated in the first half and approximately 53% in the second half of the year. On the topic of terrace repayments, we foresee for the full year a net of customer refunds. This could be a benefit of about 2 cents EPS at CER. This is already included in our outlook and any additional benefit would be incremental also to our guidance. Finally, let me briefly address currency trends. For the full year, we currently expect a tailwind of about 1 percentage point on sales and a neutral impact on adjusted diluted EPS. This is unchanged from our previous assumptions. Thank you Roland, and now let me briefly summarize before we move to the Q&A session. First, we delivered a quarter above our outlook for both sales and adjusted EPS. At the same time, we maintained a high level of profitability

while continuing to invest in our portfolio. Our growth pillars continue to perform well, delivering above-market growth, led by SampleTech, QI Equity, and QDI, while Quantiferon returned to growth. We are making good progress in our product launches, supporting our growth ambition for the second half of the year and beyond. The performance of our growth pillars and the progress on new launches reinforce our confidence in a stronger second half of 2026. So in closing, we remain focused on achieving the outlook we have set for this year and delivering solid, profitable growth. With that, I would now like to hand back to the operator for the Q&A session. Thanks a lot once again for your attention.

Ladies and gentlemen, At this time, we will begin the question and answer session. Anyone who wishes to ask the question may press star followed by one on their touchtone telephone. If you wish to withdraw your question, you may press star followed by two. To ensure that we can accommodate as many people as possible, please limit yourself to only one question and if necessary, one follow-up. Your microphone will also be muted after you're finished asking your questions. Anyone who has a question may press star one followed by one at this time. We'll pause for just a moment to allow everyone to queue for questions. We will now take the first question. comes from your line of Casey Woodring with JP Morgan.

Great. Thank you for taking my questions. Maybe just walk through the updated guide for us. I think the back half you took down from 4% to 3% to 4%. Just maybe walk through kind of what's changed and then any sort of seasonality that you're assuming from 3Q to 4Q, the step up that you talked about a little bit, Roland, in 4Q. Maybe just walk us through the drivers there. Thank you.

Thanks, Casey. I can take the first half of your question. And in Roland's comments, we describe also the weight of H2 and the traditional seasonality beyond Q4. But so, first of all, we believe in that acceleration for the reasons that we highlighted. And by the way, we also highlighted the same reason in our Q1 release. You have obviously some positive impact coming from Thank you very much. that, for example, funding, especially in the U.S., is improving sequentially. We see, indeed, an improved funding, especially for research and academia, in Q2 compared to Q1. At the same time, we need to highlight that if you consider, for example, the funding coming from NIH in the U.S., it is still below in H1 of 2026 compared to H1 2025. So we see improvement, but we remain also cautious because as you know, the lack of funding sometimes reflects on capital sales and abilities from labs to invest into new instruments. At the same time, we will benefit definitely from an easier comp from Q4 25 compared to Q4 26. Remember that last year, We started the year quite strong in Q1-25 at 7% growth. We finished the year in Q4-25 at 1% growth. This is why we have an easier comp. Roland, do you want to give more details on the weight of the different quarters?

Yeah. A couple of different perspectives. First of all, just to go on some of the products, what we just described, Cassius, again, you heard that sample prep is doing quite well, improving quarter by quarter. We had now in the first half 9% growth rate. Again, that will move double digits in the second half of the year, right? We just talked about that for the first half there was clearly significant headwind coming from the respiratory business last year. We do believe that business also again will turn probably high single more likely low double digit growth rate as well in the second half of the year. I think there's a lot of things where we, I would say, also have reasonable visibility in a given market environment. So I would say there's things like that. But once you mention it before, that is one thing this product launches right it takes some time that's again traction sample prep you see it but of course every quarter having instruments on the market customers getting used to that is being helpful there is I think the natural reason that the first quarter will be a stronger one and have in mind also Kaya Mini is going to hit within the third quarter the market so there's clearly also contribution coming in the first quarter as well.

We'll now take your next question coming from the line of Jack Meehan with Oberon Research.

Thank you. Hello, everyone. For Thierry, so you've announced the strategic review and still have the CEO search going on. Was wondering, how should we view the status of the strategic review when a new CEO is named? Does that mean the review is stopped or could that continue as a separate topic? Any thoughts would be great. Thanks.

Yeah, so I think you need to consider that those are two complementary but also independent processes. The CEO search, obviously, is one of the highest duty of the board. We are progressing. We confirm that the transition will happen in H2 of 2026. But at the same time, we have always outlined, Jack, that our company is always open to consider options to increase shareholder value and stakeholder value. And the board and management are also fully aware of their fiduciary responsibilities when such discussions might happen. And so it's a constant process at QIAGEN where we are constantly looking are the best way to improve value for our shareholders. So I think this is why I continue to say that those processes are natural, long-lasting processes, and the transition with a new CEO should not be viewed as an obstacle to constant growth. improvement of shareholders' value? Obviously not. So the two processes are going together.

Your next question comes from the line of Tycho Peterson with Jefferies.

Hey, thanks. I want to start with quantifieron. You know, you came ahead this quarter, but then you did soften the language on the full-year target to, you know, quote-unquote working towards $500 million. Are you baking in incremental headwinds from competition here in the back half of the year? I guess what's changing in the guide on quantifieron? And then the follow-up, just to follow up on Jack's question, on the strategic review, what's really on the table here? Is this portfolio changes? Is it restructuring? Is it a different mix of capital allocation? I mean, you've done a lot. You've, you know, gotten rid of pneumatics. You're paying a dividend. You have good margins, so I'm just curious how you think about the options set as you do the strategic review. Thank you.

Let me start with the second part of your question, Tycho, and then I will move to QuantiFerrand. We are having constant broad strategic reviews. First of all, as you know, we have always said that this company should focus, and we focus where we can gain the most market shares and when we can establish leadership position. This is why we are constantly reviewing the profitability and the return on investment of our different developments in R&D. So it does include the constant assessment obviously of our different pillars of growth. Second, it involves also, as I said before, to be always open for discussion as long as as we see that it can create value on the long term for our shareholders, for our stakeholders, and also when we see a feasibility to a potential basically alliance with another company. So it's basically a very thorough analysis on everywhere we can make progresses to create more shareholder values. On QuantiFerron itself, I believe we took the right decision at the end of Q1 when we saw the real decrease of migrant testing to take out 35 millions of revenues. We said at the end of Q1 that we don't believe that this situation will change drastically in the coming months, the second half of 2026, or even beyond that. That was a right decision to be taken. At the same time, Tycho, we continue to very much make progress in other applications and the development of market shares. First, we continue to convert TST customers to blood test with our latent TB testing. Second, we continue to enter into new applications. We told you two years ago for example that diabetes was becoming an interesting testing field for latent TB. And if you remember, we said in 2025 that we believe that patients' ongoing dialysis were also a significant application potential for latent TB testing. We are starting to implement that, for example, with significant testing labs in the U.S. with the group Davita, for example. As regard to competition, The fact that new competitors are coming to the market is showing that QIAGEN was right many years ago to decide to invest into latent TB testing. Because I remind you, there is a significant need worldwide for this kind of testing. We showed clearly in our IR session last year that 2 billion people in the world are impacted by latent TB. So the fact that new competitors are entering the market can be seen also positively because it will increase or continue to increase awareness for this kind of testing. And therefore, for me, it's probably going to increase the total available market for A20B testing worldwide. For H2, now, more precisely to your questions, The first thing, first of all, to highlight is, as we highlighted with Roland, Q2 returns to positive growth. We also highlighted in our press release that in Q3, we are going to be slightly impacted by a very strong comp of Q3 2025, especially in the U.S. But overall, we believe that H2 will return to growth, and then we can achieve our target to keep 500 million revenues for Quantiferon overall. Growth will strengthen as we move into 2027 with our two new major developments, the partnership with Impeko and the AI-scored results that we are going to launch towards the end of the year next year. Competition has always existed. Our main competitor is the traditional skin test. We had an existing competition for many years with Revity and we have seen the market new entrance. At the moment, we do not see an impact on our market shares. We are prepared to compete commercially and product-wise against any new entrants. But I repeat, the main competitor remains the TST, and our main objective remains to continue to convert more TST customers to blood testing.

Your next question comes from the line of Michael Ryskin with Bank of America.

Great. Thanks for taking the question. First, I want to ask real quick on capital deployment. You know, you had a share authorization at the AGM, but yet it doesn't look like you bought back any shares in the second quarter. I'm just curious why. Does this have something to do with the strategic review where you kind of want to get that finalized before you deploy capital, or is there some reason you kind of held back? And I'll throw in a second one if I can at the same time. On the sample tech business, You know, that continues to do really well, both organic and parsed. You kind of talked about some of the upsets of parsed. Obviously, you've got a lot of the automation coming in the new products that you've talked about. Just want to, you know, maybe get a sense of your thoughts on that, how that plays out in the second half as you've got a little bit tougher comps and beyond, both on the organic and new launches and also on what the upsets and parsed could be. Thanks.

So thanks, Michael, and I will take the first part, and I will ask Roland to chime in on the capital deployment strategy. As you noticed, you're right, Michael, it's going very well, but it's a proof that our automation strategy that we started back in 2021 is paying off. I remind you, we started to upgrade some of our existing instruments. KayaCube became KayaCube Connect. EZ-1 became EZ-2. and this year we have those three new launches. So organically, this is the proof that this strategy is paying off. We continue to see good growth in automated sample tech and we are absolutely convinced that more customers will move from manual sample tech to automation. So we are having the good set of answers. This is strengthened by the acquisition of PaaS. because it allows our sample tech portfolio to move into single sales, and we invested and acquired PaaS for two main reasons. First of all, because the solution of PaaS is very highly differentiated compared to existing competition. First, as you know, it's an instrument-free solution, so the ease of use is incomparable. But at the same time, to address the large volume needs, we can offer also solutions with what we call our GigaLab with PARS. And we see that activity also growing very well. The second main differentiation is the number of cells that we can cover with the PARS solutions. which is also incomparable. This is, for example, behind the fact that we have been chosen by NASA as we highlighted during this call. We told you last year and at the beginning of this year that the contribution of parts into our revenues for 26 should be around 40 million. With the development of Q1 and Q2, we believe that we have this number into control and we can probably exceed it. And now going to Roland for the capital allocation strategy for the coming month.

Mike, there's always a lot of reasons when to do and when not to do a share buy back at the end of the day. But one thing you have to have in mind after an AGM, typically debt holders have an opposition period and it takes somewhere between two and three months. It's more technical. Typically, there's never any feedback, but you have to wait for that.

Your next question will come from the line of Odysseys, Minnesota with BNP Paribas.

Hi, thank you for taking my questions. I've got two. Firstly, on the organic growth acceleration implied by your Q3 guide, specifically, I mean, on the midpoint organically, I'm getting around 50 bps acceleration. Wouldn't it be fair to assume improving growth in sample tech, Chiostat, and PCR and nucleic acids given your instrument launches, using ResComps, and improving funding releases here? Could you help us piece out the divisional growth here relative to Q2 and Q3? And secondly, Looking at Kyasta, Q2 growth underperformed most of your peers here and I understand you're relatively more reliant on respiratory given you're still early on with the GI launches and meningitis but you held up relatively better in Q4 and Q1. Could you give us some additional color on the Q2 weakness please and have you started seeing more U.S. wins since the RISE launch? Thank you.

So different questions, I will start with Chiostat and then move to Q3 versus Q4. Chiostat, I wouldn't say that we are more exposed to respiratory panels than our competitors. Respiratory panels in syndromic testing account for roughly 65% of the total volume of testing. So it is clear that everybody is sensitive Thank you very much. Thank you very much. and at the same time, you are not completely in winter in many other parts of the world. So this explains the weaker numbers on respiratory. It is true that for the last 12 months, us, but also our competitors, are seeing weaker flu season. At the same time, and this is the objective of our strategic vision of developing the menu of KyaStat, We are extremely pleased by the very good growth of GI. The relevance also, you have seen the cyclospora example that I gave today. We have meningitis developing very well, especially in northern Europe, but also starting in the U.S. And we will have for the second half of the year the BCID panel. Because as we said today, blood infections are a key issue for customers. We now have that BloodCulture panel CE marked. We expect to have it FDA approved during the fourth quarter of this year. This will help the growth. The second good factor that will help the growth in end of Q3 and Q4 is that there will be a winter again in the northern hemisphere. The problem is not that much to know whether it's going to be a strong flu or weak flu. There will be flu. And here we will be relevant. and here you will see an acceleration of our respiratory testing. In the U.S., which remains the main market for syndromic testing, as you know, we have taken significant decisions from an organization standpoint, new salespeople, salespeople on the field, more specialized, new leadership. This is starting to pay off and indeed, to your point, where we have the largest volumes of customers, we start to see a good uptake of our Kyastat rise instrument in North America. So that's the context for Kyastat. And this is why we are confident in a double-digit growth for the second half of the year for Kyastat. Now, coming back to your point on Q3 versus Q4. I mean, in Q3, we will continue. We have no reason to consider that, for example, sample tech will slow down. We believe that sample tech will continue to perform well because, again, in Q3 we will see more uptake of our new launches and we see the continuous development of parts. Digital PCR will continue to perform well. Overall, between Q3 and Q4, you will see a continuing good development of capital cells and consumables, and this will be also strengthened by the launch of our new set of panels around gene expression. At the same time, as we discussed today, we know that Q3 will be impacted by a very strong comp on quantifieron, especially on North America, from Q3 of 2025. This is how we see the development of Q3 versus Q4. Obviously, if we can beat our target for Q3, we will do it. but it's I think a very mature and realistic analysis to set that guidance for Q3 and also that acceleration for Q4.

And just one instrumental comment to that, because I do think while everybody has it somewhere, I just want to put it also plain on the table, right? We shouldn't forget that, again, there's $35 million of immigration sales for quantiferon, which are, as a market, not accessible for us anymore, for anybody. And if you just put that in the percentage growth rate, that is more or less already 67% growth rate. So again, at the end of the day, that is what we have to compensate. And again, last year, as Thierry just mentioned, Q3 was an 11% growth rate for QuantiFeron. So this is a very strong comparable quarter. The rest of the business is actually, as I said, hard to complain. Sample Prep double-digit second half, Chiostat double-digit second half, Chiacuity double-digit. Again, I don't think that we can complain too much. And also, again, the headwind Q1 next year on QuantiFeron is history.

Your next question will come from the line of Dan Arias with Estifo.

Hi, guys. Thanks for the questions here. Thierry, on the fully automated quantifier on solution that you're bringing to market, I know none of this product development is easy, so I don't mean to trivialize the effort, but why a year and a half to get that product to market? What are the major steps or hurdles to getting that to customers maybe ahead of another competitive option getting into the market?

Well, because first of all, you need to develop two new instruments and adjust them to the specific workflow of Quantiferon. Those two new systems are a dedicated aliquoter and a dedicated incubator. And then you have to make sure that you can connect all those pieces together to build that first fully automation sample-in result-out. So to your question, developing and adapting two new instruments in, I would say, something like a year, it's quite a performance. It's quite a performance. And then obviously, we need to test it with customers. It will be an investment on their side, and we will need to make sure that It is perfectly adapted to their workflow. So there will be some customization. We will work and we have started to work, especially with our key accounts on making sure that that workflow from a footprint, from a volume is going to be completely adjusted to their needs. What makes me very confident is that we have started introducing this workflow with a fairly deep level of details to our main customers, main key accounts in the U.S., main key accounts in Europe. And the acceptance, the interest, the welcoming of this presentation is even beyond our expectation, with many sites indeed asking to be the pilot site for this fully integrated workflow. But you still need to develop those instruments. You still need to make sure that the workflow is seamless. And I believe that a year to a year and a half is not that long. You need to validate also the workflow. You need to push it to regulatory approval. So second half of 2007 is a realistic timeline. And I continue to believe that there will be first installation in that timeframe.

Next question will come from the line of Dan Brennan with TD Cowen.

Dan Brennan Taking the questions? Maybe I'll just ask two and then kind of mute and listen. Maybe on the first one, Thierry, I think you mentioned upfront to I think Jack's question on the strategic plan, both internal efficiency gains and also looking at potential strategic acquirers to maximize value. Could you just comment how management and or the board think about private equity versus strategic acquirers? Are they the same? Are they different given PE will typically look at deals and be more cost-cut driven versus strategic corporates are going to be probably more growth interested. And then I guess, B, maybe as we look ahead, kind of when we turn the page, I think consensus right now sits at 5% CER for 2027. So a decent little rebound on easy comp. Just wondering if you guys can offer any initial thoughts about how you're looking to exit this year and kind of what that sets up for next year. Thank you.

Well, I would say on the first one, first I will highlight something because I heard twice in that call the end of a process. And this is not the message that I want to leave with you guys. There is not a dead end of a process of continuously assessing the best pathways forward for QIAGEN. It's a continuous project. Very regularly during the year, management is reviewing and assessing those options with our board. And we are not going to stop that at a given point. I think it's management's responsibility to constantly present to the board options for better shareholder value. So that's the first thing. Now, on your question, PE versus strategy, first of all, as you know, Dan, I won't comment into many details. There are pros and cons on both sides. This is not what is our main driver. Our main driver is to decide is it better for QIAGEN with our mid-term plan, with our objective of sales, profitability, return to shareholders. Is it better to continue organically and independently? Would that make sense to have a strategic partner? Or would that make sense to have a more financial-driven partner? What of those solutions is driving the main shareholder value for our shareholders, but also for our stakeholders, the chiagenos, the legacy that we have built for more than 40 years now? Now regarding the consensus, and Roland, feel free to chime in on this, we are not in the midterm call here, Dan, so I will clearly say our ambition as management for the moment is to deliver on Q3, is to deliver on Q4, to deliver the full guidance that we gave at the beginning of this year, and to continue to improve profitability. The market has not become easier around us and despite this, this company continues to deliver profitable growth. You have seen that in Q2. That's my main target. We have a target set since our capital market day in June 2024. We are still working towards that. That's what I can say at this moment.

The last question comes from the line of Jan Kaaf with Dolce Bank.

Good afternoon. Thanks for taking my two questions. My first one is on instruments. You reported a low teens decline in Q2 despite missing the growth in sample tech instruments. In which product category specifically have you seen the highest declines? And most life science companies have actually highlighted improving order trends in lab instruments in Q2. So are you seeing similar trends? And secondly, on Caiestat, how is the development of the complicated UTI panel progressing and when could you launch this test? Based on the high clinical need for this solution, how do you see the financial opportunity?

So let's start with STAT and the CA UTI and then I'll go to the instrument trends and capital sales. The reason why we have extremely good expectations on these complicated UTI panels are mainly two-fold. First of all, because, Jan, as you highlighted yourself, this is a significant unmet need for clinicians and for labs all over the world. And once again, you need to understand, we are not talking traditional UTI. This is covered by many cheap solutions. We are talking about complicated UTI, life-threatening UTI. And there, this is where we have a significant unmet need. And this is a good segue to the second reason to be optimistic, is that none of our competitors will have this panel. And to date, none of our competitors have announced that they are developing such a panel. The development progresses very well, and we are still confident that this test will be available for Europe, Europe first, in the second half of 2027. And when I say that, I mean obviously CE mark, and then we will move to the U.S. You need to understand, Yann, that any time you launch such an innovative panel, There is a period of time where you will have to do clinical and medical education. I have no doubt that our prospect will immediately see the value of the panel, but you need basically to help them changing their testing habits. It always takes time, so we will have to invest in medical education. But the potential of that test, given the unmet need that I highlighted at the beginning, is significant. And this will be a very good tool, as we said before, to also help mitigating the respiratory panel going high or going low, depending on the strength of the respiratory system. So it's a very good development. It's a very good strategic development. Now on capital cells. We have said, and we continue to say, and we have said this even starting in 25, we do see indeed a sequential improvement of funding for research and academia. And this obviously helps capital sales. At the same time, we also highlight that despite that sequential improvement in Q2, for example, compared to Q1 of 26, the NIH outlay Year-to-date 26 is still lower than 25. So we remain cautious. We see good progresses, but we remain cautious. And as Roland highlighted in his comments, when you launch a new instrument such as Kaya Symphony Connect, such as Kaya Sprint, for example, you need to spend some time with customers to validate the new instrument, to adjust it to their own needs. that takes a bit of a time. So this is why we see that performance of Q2 for capital sales at KLJ. still lower funding and at the same time progressive uptake of our new launches. This is how you should see that. But those are good investments for the future. You will see a significant level of Kaya Sprint placement when we will disclose the numbers at the end of 26. This is creating growth for the future. You will see good placement of Kaya Symphony Connect. This will create consumables for the coming years. and as Roland highlighted as well, we will launch also the CAIA Mini. So if you combine those two factors, new systems plus sequential improvement of funding, this gives us good reasons to be optimistic.

Thank you.

This is now. There will be no more. This is the end of the Q&A session. I will now turn it back to Daniel for any closing remarks.

Thank you. I would like to close this conference call and thank you for your participation. If you have any questions or comments, please do not hesitate to contact us. Thank you very much.

Ladies and gentlemen, this concludes the conference call. Thank you for joining and have a pleasant day. Goodbye.