Bio-Techne Corp Q4 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Puneet Souda - Leerink Partners LLC - Analyst : First one on the guide. I just wanted to clarify and the outlook comments you made. Are you expecting low single digit for the full year fiscal '26, and if you could talk a little bit about the cadence of that over the next four quarters. How should we think about the Protein Sciences segment growth within that context versus the DSS growth? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance So first of all, to clarify, the guidance was not necessarily for full year fiscal '26 growth of low single digits. It was that we expect low single-digit growth until there is more certainty around the various administration policies out there on academic funding, and pharmaceutical tariffs and FM pricing. And if that takes the full fiscal year to become more certain, then yes, that would translate to a full fiscal year '26. But to be clear, I'm not necessarily anticipating that will take the full year for that starting to become more known. With regards to the Life segment, as you know, we don't give guidance specifically by segment. I think there's some puts and takes within both the segments, but I wouldn't expect a big material change in the growth rates in either one under this environment.

Question: Daniel Arias - Stifel, Nicolaus & Company Inc - Analyst : Thanks for the questions. I appreciate you doing the legwork to understand the NIH exposure there. low single-digit exposure is actually pretty low. Can you expand on where the funding is coming from for the two-third of the academic customers that aren't tied to the NIH, is it pharma? Is it private sources? Where are these guys getting their money from? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Yeah. based on the research we've done, Dan, and you probably can see the same as a lot of surveys out there that has been published with regards to where academic institutions in the US do get their money from. And pretty consistent that roughly 50%, 55% of their funding comes from federal sources, and all those federal sources, roughly 50% comes from NIH. So that equates to roughly less than a third of the academic research funding coming from, specifically NIH. So that's the math behind that number. And for us, of course, U.S. academic is only 12% of our business. So.

Question: Matt Larew - William Blair Capital Partners - Analyst : You referenced a set of unknowns that's driving the low single-digit outlook. And I think it's likely that those are not resolved simultaneously and probably there's some cadence to how that occurs. It sounds like you did a lot of customer outreach and surveys REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Matt Larew - William Blair Capital Partners - Analyst : Okay. So obviously, the Exosome divestment followed the -- an early one, the Atlanta Biologics one a couple of years ago. You referenced M&A remains a key focus. In light of some of the portfolio reshaping that's going on, you referenced sort of renewed focus on margin profile. How are you thinking about M&A, be it by segment, be it by stage of company or relative profitability and potential?

Question: Kyle Butcher - TD Securities (USA) LLC - Analyst : I wanted to just dig in a little bit on trends you're seeing between large pharma and biotech, and maybe how they sort of trended throughout the quarter? And then maybe on the large pharma side, some peers have been a little bit more positive on large pharma that it's stable, if not steadily improving a little bit. So I guess just in the context of your low single-digit growth expectation, how does pharma fit within that framework? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Kyle Butcher - TD Securities (USA) LLC - Analyst : Got it. And then maybe a quick clarification on China, pretty impressive growth there in the fiscal fourth quarter. Could you quantify how much maybe pull forward you saw in the fiscal fourth quarter? I think you mentioned that activity sort of picked up ahead of potential tariff impacts. Is that right?

Question: Daniel Markowitz - Evercore Inc - Analyst : I had two. The first one, as you think through the drivers of margin expansion in fiscal '26, it seems like the guide is assuming low single-digit organic. And it's hard to expand margins at that kind of top line growth. But of course, you have a couple of tailwinds coming from the tariff offsets and the ExoDx divestiture. Is the plan to toggle the amount of ExoDx reinvestments depending on top line? Or would any upside to the organic top line lead to upside to margin expansion as well? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance So I'd say that our base case that we're operating right now is low single-digit growth until the markets improve. And I can't predict when exactly that will be, but we are managing the business under that low single-digit growth environment, taking productivity actions as you would expect us to do in that situation. Those productivity actions, combined with Exosome Diagnostics no longer being in our results gives us margin headroom for reinvestment back into our businesses when the markets do return. So that's how we're managing the business today. Now if you're asking when these uncertainties become get resolved, and we should see some tailwinds from that, we will decide when that happens, what next investments are on deck to make and the trade-offs between reinvesting that upside into future growth platforms and/or giving them some more margin back to the investors. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Daniel Markowitz - Evercore Inc - Analyst : That's helpful. And then the second one, just on cell and gene therapy. I know you called out Wilson Wolf plus-20% and called out strength in cell therapy in the press release and on the call. Was this similar across the rest of the cell and gene portfolio? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Yeah, I'm sorry, could you repeat the question one more time? I'm not quite sure we understood the context.

Question: Patrick Donnelly - Citibank Cameroon SA - Analyst : Maybe on China, helpful to talk through -- it seems like maybe a little bit of some pull forward. Can you talk about, I guess, what you saw underlying in the quarter and then the expectations going forward? Where are we in that region? How are you thinking about in terms of that low single-digit growth going forward, how China plays into that would be helpful.

Question: Patrick Donnelly - Citibank Cameroon SA - Analyst : Okay. That's helpful. And then maybe one for Jim. Just in terms of the guide, obviously, I get the kind of the short term, low single digits. I guess in terms of the visibility, are you guys just -- is it just the biotech and academic piece, just a little bit of caution there and want to wait and see before calling any sort of inflection? What are you guys looking for in terms of gaining a little more visibility and ramping back to maybe a little bit more of the normal growth rates we're used to seeing from you guys? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance No. I mean, Patrick, that's exactly right. I mean rather than sit here and try to call an inflection point and call a point in time of when the decisions are going to be made around NIH funding and how the executive branch is going to manage to that and when funding will actually return back to biotech, I mean, I'm not a sus any more than anyone else is. So those are the key indicators we're looking for. We do believe that once all this noise around NIH funding and settles down, we think our customers in academic will also settle down and regroup. And we do think right now, we're experiencing the worst of it. So I see that as upside when that happens. And hopefully, that happens early this fall, but we all know they can drag out longer than that. So we'll have to wait and see. And then biotech funding, same thing. We're monitoring that. The good news is the past couple of months, it appears as though the funding is starting to come back a bit, but it's still down a lot year-over-year from a year-to-date perspective. So two months doesn't make a trend, but we are encouraged by that. But we do believe the biotech funding sentiment follows kind of a combination of both the academic sentiment and the large pharma sentiment. So -- and it can accelerate otherwise. So I think getting resolution on the pharma tariffs, the pharma MFN pricing and how that's going to play out. Once those are more known, I think those will all be inflection points for stabilization of our markets and confidence to reinvest in R&D.