Bio-Rad Laboratories — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total net sales were $656.4 million for the quarter, a 0.5% increase from $653.0 million in Q3 2025; currency-neutral sales grew 0.7%.
• GAAP gross margin was 50.1% compared to 52.6% in Q3 2025; Non-GAAP gross margin was 54.5% compared to 53.5% in Q3 2025.
• GAAP operating income was a loss of $49.7 million versus operating income of $65.3 million in Q3 2025; Non-GAAP operating income was $83.7 million versus $77.0 million in Q3 2025.
• GAAP operating margin was (7.6)% compared to 10.0% in Q3 2025; Non-GAAP operating margin was 12.8% compared to 11.8% in Q3 2025.
• GAAP net income was $458.6 million ($17.02 per diluted share) compared to a net loss of $(341.9) million ($(12.70) per share) in Q3 2025.
• Non-GAAP net income was $71.5 million ($2.65 per diluted share) compared to $60.8 million ($2.26 per share) in Q3 2025.
• Net cash from operating activities was $96.4 million compared to $120.9 million in Q3 2025.
• Free cash flow was $65.2 million compared to $89.2 million in Q3 2025.
• GAAP effective tax rate was 14.9% compared to 20.7% in Q3 2025; Non-GAAP effective tax rate was 21.4% compared to 26.7% in Q3 2025.
• Cash and cash equivalents were $465.3 million as of September 30, 2026, down from $529.8 million as of December 31, 2025.
• Short-term investments were $1,199.0 million as of September 30, 2026, up from $1,010.9 million as of December 31, 2025.
• Total assets were $10,783.1 million as of September 30, 2026, compared to $10,576.5 million as of December 31, 2025.
• Total liabilities were $3,180.1 million as of September 30, 2026, compared to $3,122.9 million as of December 31, 2025.
• Total stockholders' equity was $7,603.0 million as of September 30, 2026, compared to $7,453.6 million as of December 31, 2025.
• Current maturities of long-term debt were $400.9 million as of September 30, 2026, compared to $1.3 million as of December 31, 2025.
• Long-term debt, net of current maturities, was $803.1 million as of September 30, 2026, compared to $1,201.7 million as of December 31, 2025.

Guidance and Future Outlook:

• For full-year 2026, the Company expects non-GAAP, currency-neutral revenue to be in the range of a decline of approximately 3.0 percent to growth of approximately 0.5 percent.
• For full-year 2026, the Company estimates a non-GAAP operating margin of approximately 10.0 to 12.0 percent.
• Management expressed confidence in the 2026 outlook driven by progress in transformation initiatives and reprioritized R&D efforts.

Business Segments and Product Lines:

• Life Science segment net sales were $254.6 million, a 2.8% decrease from Q3 2025; currency-neutral sales decreased 2.4%.
• Life Science segment decline was driven by lower process chromatography sales and ongoing challenges in the academic research market, partially offset by increased Droplet Digital™ PCR sales.
• Clinical Diagnostics segment net sales were $401.8 million, a 2.7% increase from Q3 2025; currency-neutral sales increased 2.8%.
• Clinical Diagnostics growth was primarily driven by growth in quality systems and diabetes products.
• Strong demand for Droplet Digital™ PCR instruments was cited as a key driver for the quarter's results.

Market and Competitive Landscape:

• The academic research market continues to present ongoing challenges for the Life Science segment.
• The biopharma sector's recovery pace is noted as a risk factor in the forward-looking statements.
• The Company operates in global markets with exposure to foreign currency exchange fluctuations.

Risks and Challenges:

• Life Science segment revenue was negatively impacted by lower process chromatography sales.
• The quarter included a $49.8 million impairment of purchased intangibles and significant restructuring costs.
• GAAP operating results were significantly impacted by a $588.2 million gain from the change in fair market value of the investment in Sartorius AG, which contributed to the high net income figure.
• Forward-looking statements note risks including international operations, global economic and geopolitical conditions, tariffs, reductions in government funding, supply chain issues, and regulatory risks.

Management Commentary and Tone:

• CEO Norman Schwartz stated that third-quarter results reflect steady progress and a return to currency-neutral revenue growth.
• Management noted that margins expanded excluding restructuring and impairment items, reflecting benefits of transformation initiatives.
• Management highlighted that the reprioritization of R&D efforts is yielding new, differentiated products for customers.

Other Key Points:

• The Company recognized a change in the fair market value of its investment in Sartorius AG, which substantially contributed to the reported GAAP net income.
• The Company reported $79.3 million in payments for purchases of treasury stock for the nine months ended September 30, 2026, compared to $295.5 million in the same period in 2025.
• Payments for purchases of marketable securities and investments were $677.7 million for the nine months ended September 30, 2026.
• Proceeds from sales and maturities of marketable securities and investments were $464.0 million for the nine months ended September 30, 2026.
• The Company has approximately 7,100 employees.
• The Company reported $2.6 billion in revenues in 2025.