Bio-Rad Laboratories (NYSE:BIO) reported second-quarter revenue of approximately $651 million, essentially flat from $652 million a year earlier on a reported basis and down 1.9% on a currency-neutral basis, as continued softness in academic research markets weighed on its Life Science segment.
President and Chief Operating Officer Jon DiVincenzo said revenue increased 10% sequentially as the company improved from a challenging first quarter. Clinical Diagnostics returned to modest currency-neutral growth, led by quality controls and blood-typing products, while Life Science trends improved excluding process chromatography.
Segment results and end-market conditions
Life Science sales were $252 million, declining 4.1% year over year on a reported basis and 5.1% on a currency-neutral basis. The decline reflected ongoing weakness in academic research and a difficult comparison in process chromatography, according to Chief Financial Officer Roop K. Lakkaraju.
Clinical Diagnostics sales rose to approximately $399 million from $389 million a year earlier, an increase of 2.6% reported and 0.3% currency-neutral. Growth in the Americas was offset by lower sales in the broader Asia-Pacific region.
Demand from academic and government customers remained below historical levels, particularly in the Americas. DiVincenzo said National Institutes of Health funding outlays have begun rising year over year, though purchasing activity generally trails funding. The company said it needs to see a more sustained pattern before characterizing the environment as a durable recovery.
Bio-Rad also reported early signs of stabilization among biopharma customers, particularly later-stage and commercial-scale biotechnology companies. Early-stage biotech customers remain more cautious because funding conditions have not fully normalized, management said.
Process chromatography, which represents less than 5% of annual company revenue, increased sequentially but declined from the prior year as expected. Management said the business has customer concentration because of its niche role in the polishing phase of bioprocessing, which can create quarterly variability.
Regional trends and digital PCR
Americas results remained soft because of academic-market pressure, although Bio-Rad said conditions improved toward the end of the quarter. Asia-Pacific sales excluding China rose 6% currency-neutral, supported by growth across most major product lines.
China, which represents about 6% of total revenue, declined in the high teens. The decline reflected the timing of quality-control orders and softer Life Science instrument demand. Management expects China conditions to create an approximately $4 million headwind in the second half, an impact already included in full-year guidance.
The company said its in-China, for-China manufacturing capability is now operational, allowing it to participate in a broader range of local tenders. In the Middle East, revenue increased 7% year over year, while channel partners replenished about $3 million of inventory during the quarter. Bio-Rad said underlying customer demand in the region has not yet stabilized, and it expects volatility to continue amid elevated global fuel and transportation costs.
Digital PCR revenue increased 6% currency-neutral, with instrument revenue rising more than 20%. DiVincenzo said growth was broad-based across geographies and included customer conversions from qPCR. Digital PCR consumables revenue declined slightly year over year but rose sequentially.
Management said consumables pull-through has yet to reach its expected level, but it believes recent instrument placements create a larger base for future recurring revenue. Bio-Rad said its Stilla Technologies acquisition, completed a year ago, accelerated digital PCR growth and has generated margins ahead of its original expectations. The company sees near-term digital PCR growth in the mid-single digits, with a longer-term opportunity to reach high-single-digit growth.
Margins, capital returns and restructuring
Consolidated gross margin was 53.1%, compared with 53.0% a year earlier. Non-GAAP gross margin rose sequentially to 53.9% from 53.1% in the first quarter, aided by manufacturing absorption but partly offset by product mix and elevated logistics costs.
Second-quarter operating income was approximately $73 million, compared with approximately $77 million a year earlier. Non-GAAP operating margin was 12.5%, down from 13.6% in the prior-year quarter but up from 6.6% in the first quarter. Non-GAAP net income was $70 million, or $2.62 per diluted share, excluding the change in equity value of the company’s Sartorius stake, compared with $71 million, or $2.61 per share, a year earlier.
Bio-Rad repurchased about 110,000 shares for approximately $32 million during the quarter, at an average price of $281.57. As of June 30, it had approximately $206 million remaining under its board-authorized repurchase program.
The company also announced a restructuring involving workforce reductions, facility rationalization and additions of skills intended to support innovation and growth. The program is expected to be substantially completed by the end of 2027 and generate $30 million to $35 million of annualized net cost savings after reinvestment. Management said the effort is expected to involve approximately $90 million in one-time costs and deliver roughly 40 to 50 basis points of operating-margin expansion in 2027, with minimal savings expected in 2026.
Outlook
Bio-Rad reaffirmed its 2026 non-GAAP outlook, forecasting currency-neutral revenue growth of negative 3% to positive 0.5%. It expects Life Science currency-neutral growth of negative 3% to negative 1% and Clinical Diagnostics growth of negative 3% to positive 1%.
The company expects third-quarter revenue to be roughly flat sequentially, followed by a mid-single-digit percentage revenue increase from the third to fourth quarter. Bio-Rad maintained guidance for non-GAAP gross margin of 53% to 54%, non-GAAP operating margin of 10% to 12%, and free cash flow of approximately $290 million to $340 million.
Chief Executive Officer Norman Schwartz said Bio-Rad remains focused on improving execution and sharpening capital allocation. He also said the company has been in “active” and “constructive” discussions with Elliott Management and believes the parties are broadly aligned on improving execution, capital allocation and narrowing the gap between Bio-Rad’s value and its share price.
About Bio-Rad Laboratories (NYSE:BIO)
Bio-Rad Laboratories, Inc is a global provider of life science research and clinical diagnostic products. The company operates through two primary business segments: Life Science and Clinical Diagnostics. Within the Life Science segment, Bio-Rad offers instruments, reagents and consumables for protein analysis, cell biology, gene expression and other molecular biology applications. The Clinical Diagnostics segment supplies quality control products, blood-typing reagents and instruments, and molecular diagnostic assays used in blood screening, infectious disease testing and routine clinical laboratories.
Founded in 1952 by David and Alice Schwartz and headquartered in Hercules, California, Bio-Rad has grown its footprint across the Americas, Europe, Asia-Pacific and other regions.
