Bio-Techne at Jefferies Conference: Strategic Growth Amid Challenges

On Wednesday, 04 June 2025, Bio-Techne (NASDAQ:TECH) presented at the Jefferies Global Healthcare Conference 2025, highlighting both opportunities and challenges in its strategic outlook. The company reported moderated growth in pharma and potential impacts from NIH budget cuts, but remains optimistic about long-term growth, particularly in China and its cell therapy and proteomic divisions.

Key Takeaways

• Bio-Techne anticipates low single-digit growth in Q4, with mid-single-digit growth in pharma.
• Potential NIH budget cuts could slightly impact long-term growth, but core business areas remain strong.
• China shows signs of recovery, with long-term growth expected due to demographic trends.
• Margin improvements in Q3 are expected to contract slightly in Q4 due to tariffs.
• Strategic focus on cell therapy, spatial analysis, and liquid biopsy.

Financial Results

Bio-Techne reported a strong Q3 2024 with:

• Double-digit growth in the pharma sector.
• A 200 basis point improvement in year-over-year margins.
• 6% organic growth.

For Q4 2024, the company expects:

• Overall growth to slow to low single digits.
• Pharma growth to moderate to mid-single digits.
• Margins to contract by approximately 150 basis points.

Despite short-term challenges, Bio-Techne aims for operating margins above 35% within five years.

Operational Updates

In the academic market, Bio-Techne has seen stable sales over the past three months, despite concerns about deeper NIH cuts. The pharma market has moderated due to tariff discussions, but the company remains confident in its strategic sourcing and inventory management to mitigate these impacts.

Smaller biotech firms are cautious with spending due to external market uncertainties. Instrument revenues, which make up about 10% of total revenue, have shown strong performance, particularly in protein sciences.

China remains a key focus, with initial recovery plans delayed but showing subtle optimism and demand recovery.

Future Outlook

Bio-Techne is focusing on several growth drivers, including:

• Cell therapy and proteomic analytical instrumentation.
• Expansion of the spatial analysis platform targeting the translational market.
• Scaling its liquid biopsy business, with profitability expected in a few years.

The company is optimistic about China’s long-term growth potential, driven by an aging population and advancing science.

Q&A Highlights

During the Q&A session, Bio-Techne addressed several points:

• The pharma business growth is genuine and not due to tariff pull-forwards.
• Instruments are less affected by capex budget changes due to productivity gains.
• The impact of the new administration on academic funding may be more psychological than actual.
• The company has resolved capacity constraints in its spatial market.

For further details, readers are encouraged to refer to the full conference call transcript.

Full transcript - Jefferies Global Healthcare Conference 2025:

Tycho Peterson, Life Science Team: Let’s get started. I’m Tycho Peterson from the life science team. It’s my pleasure to introduce Biotechni. Maybe just to, kick it off, we can start with a little state of the union. And obviously, a lot of volatility around the macro.

We we were just talking on US, you know, NIH academic funding. Maybe just talk a little bit about that, talk about pharma dynamics, and then the evolving situation in China.

Unidentified speaker: Yeah, sure. Well, first of all, Tycho, thanks for having us. The conference has been a great conference, always is. Yeah. So it’s very dynamic dynamics, that’s for sure.

A lot of uncertainty out there. Some of the of the greatest uncertainty we’ve seen in our industry in a while. But, as we talked about at the our last earnings call in terms of our q up to that point the year was more or less shaping up the way we had predicted three quarters before that in our end of our fiscal year twenty four. In terms of recovery in the overall life science tools space in our customer end markets, and was progressing quite nicely. And pharma in particular did very, very well.

We double digit growth in pharma and it was very widespread across our portfolio and across the geographies, which was great to see. What had not been a topic of discussion up until April, was academic, because academic was kind of, you know, steady and doing well. In fact, it was even better than most of calendar twenty twenty four to start our q three. But then, actually it wasn’t it was actually February, not April, sorry, when the cap reductions first started in discussion, indirect cap reductions. So, and, you know, everyone here has been following it.

They know that the news has gotten progressively, I don’t want say, worse or just more intense with regards to now, NIH budget cuts, and how much of the cut’s going to be, and how’s that what’s that going to look like. It’s anyone’s guess where it falls out, but what done is we’ve quantified what that impact would be for our company under some worst case scenarios. And, you know, let’s just take a real drastic view of a 40% cut in NIH funding, which I don’t think realistically that’s plausible. And for us, it’s very difficult to know exactly how much of our US academic comes from NIH. And as a reminder, it’s about, US academic is about 12% of our revenue.

But because most of that revenue comes from our core reagents, our core reagents are kind of like an everyday need in the wet lab, whether it’s for an NIH specific project, or whether it’s for just teaching students in the lab. And so, understanding how much of those relative low dollar purchases are actually within an NIH grant is really hard to know. I we believe it’s it’s not nearly as much as what’s perceived out there. But, if you take the worst case scenario, not the most likely, but worst case, which is that those customers who receive NIH grants were to reduce their revenues to us by 40%, and you look at our five year CAGR going forward, you would have about a negative 1% impact to our projected growth rate. Now, it’d be more steep, of course, in year one, which would be fiscal year twenty six, But assuming after that the growth rates return to kind of the 3% range, that’s what the impact would be to the overall CAGR.

And why that’s the case is because, again, we’re talking about 12% of our revenue overall, and not all that 12% by any means comes from NIH. But also, our growth, our main growth factors that get us to double digit growth, that allow us to overachieve the market by over 500 basis points of growth comes from cell therapy, largely our proteomic analytical instrumentation, and then also spatial. And at least two of those three are definitely highly more concentrated in the biopharma market than they are in the academic. And so, with those growth factors intact, even with that extreme drag on NIH funding, it would still have a relatively immaterial impact to our long term growth rate. So that’s kind of the academic environment, how we phrase the downside.

Now again, that’s not what we expect, not what we expect in terms of what the ultimate cuts will be. I think that’s a draconian case. And even if it was the case, we don’t think that’s what the actual impact would be to our academic US sales for the reasons I already stated in terms of other sources of revenue that actually fund the majority, we think, the purchases of our reagents by those customers. If we look at the other two main end markets, that being pharma and then smaller biotech. Smaller biotech in q three wasn’t as strong as we would have liked, but we think they were somewhat impacted by all the noise that occurred with the Trump administration, the threat of terrorists and so forth, and the capital markets in general.

I think, smaller biotechs are just being much more conservative of their money. It’s not that they raised a lot of money last year, they haven’t spent a lot of it that we can see. And there’s not a lot of new money coming in right now because of all the of all the concerns in the external markets, the macro market right now. So, they’re just being very judicial with their spend. And then lastly is pharma.

We talked about pharma being strong in in q four, or q three, sorry. And there, you know, in April, again with the tariff discussions around pharma, then the discussions around possible m f m pricing, not a lot of clarity around it, but just tweets and discussions. We’ve seen, know, what I’d call is a come off the accelerator a little bit in pharma. So the growth is still very good, relatively speaking, just not as strong as it was in our in our q three. And so that’s why we’ve when we look into q four, we see kind of academic being the same in q four as it was in q three, nothing’s really changed there.

Our growth rates have remained stable for about three months in a row there. Biotech, pretty much the same. But pharma, we have seen the growth rates come down from the high or from the double digits down to the mid single digits. So overall, the company we think will, you know, fall out somewhere in the low single digits this quarter. So it was a mouthful, but that’s kind of

Tycho Peterson, Life Science Team: That’s helpful. Maybe a couple of to follow-up on. I guess pharma, is any of what you saw this past quarter pull forward then? You know, with pharma getting ready for tariffs?

Unidentified speaker: No, don’t believe that at all. First of our product portfolio is not one that you do much in terms of stocking or pull forward. Again, 70% of our business is run rate reagent business. It’s not the type of material that you buy way in advance by any means, and nor do we see that in our instruments. So no, we don’t believe that.

We believe that was our the genuine kind of market growth. And still seeing relatively strong positive growth in pharma. It’s just not the same rate we saw in Q3.

Tycho Peterson, Life Science Team: And then you’ve obviously seen a lot of, you know, CapEx announcements, you know, really over the next five years, so maybe nothing that impacts this year. But how do you think about that for your pharma business?

Unidentified speaker: Know, first of all, cap ex is our instruments and our cap ex, remember our instruments are about 10% of our revenue, and then another 10% of our consumable revenue is tied directly to those to those instruments. And our instruments are relatively low cost instruments, and so they’re not as impacted by fluctuations in capex budgets. And the amount of productivity they bring to our customers often offsets any constraints you might see in capex. So, as an example, even though the capex environment has been very constrained this past year, our overall our ProteinSimple, which is the brand for our instrumentation and protein sciences, that franchise has continued to grow mid to high single digits quarter after quarter, even in this environment, because of that very strong consumable pull through.

Tycho Peterson, Life Science Team: And then I guess, why couldn’t academic be a little worse I mean if you think about just the timing of the new administration coming in, you you did have an initial kind of freeze on grants, but then you know, you started grant reviews in March. But why, yeah, why couldn’t it be worse this quarter versus last?

Unidentified speaker: I I guess anything’s possible, but I believe that some of is psychology too. You gotta remember that the folks making the purchases, especially in academic, are the lab, individuals at the lab. And their impact, they’re acting as much like a consumer than they do like a company or an institution. And so, they’re impacted by the noise they hear in the press and on TV, it’s like just like any of us are on the consumer side, And, they behave accordingly, and in a lot of cases distracted by it. And, spending time out of their lab asking their administrators what’s going on, what their future might be, etcetera, as opposed to actually working on the with the money they have today.

And we believe actually that the distraction we saw from that in Q three was actually over exaggerated the actual impact with regards to the funding they currently have to work with. And so, the fact that it’s staying relatively stable now tells us that kind of noise is out of the system. And, know, they’re they’re kind of operating more normal, although at a lower lower rate than they were, probably because of the concerns of future funding. But all I can say, Tycho, was that for about three months, we watched our daily sales of academic on a daily basis, and for three months in a row now, it’s been relatively stable despite the increased rhetoric around deeper cuts.

Tycho Peterson, Life Science Team: And, you know, instruments 20% or so of the business, you know, you did have upper single digit growth last quarter, right? Maybe just talk a little bit about were there specific product lines, segments, geographic regions that stood out?

Unidentified speaker: Yeah. So yeah, our instruments, it’s the second quarter in a row that we had growth in our actual instruments, which was great because it had been about a year and a half prior since we’ve seen growth there. And it was growth across all the platforms, but it was definitely driven by our biologics platform, our Maurice instrument, which is one product that we have that’s used in bioprocessing as a QC tool. So, I think we’ve heard from some of the other peer companies who are more heavily involved in bioprocessing that they’re starting to see that come back, and we definitely saw that come back fairly strong for that particular product line of instrumentation. And we continue to see growth in our LUNA four instrument as well, and spatial that grew double digit as well for the quarter.

Tycho Peterson, Life Science Team: And I definitely want to hit on spatial in a minute, just on bioprocess. So how big is that business for you? And maybe just talk a little bit about exposure to current market biosimilars, GOPs. How do you think about portfolio mix?

Unidentified speaker: I think our biologic solution with Maurice is extremely well positioned and is a very unique solution that it has been taking share since its launch almost a decade ago. And we’ve had new iterations of it, have expanded its capabilities and its applications. So the market for it continues to grow as well in terms of its applications. Very ease of use. Yeah.

So I mean, I’m sorry, was that part of your question?

Tycho Peterson, Life Science Team: Was? Just, you know, like as we think about newer markets, whether it’s biosimilars, whether it’s GOPs, I mean what’s your exposure to kind of some of them?

Unidentified speaker: I I think those are all opportunities for us for that instrument by far, for sure. Those are all opportunities for it to continue to grow.

Tycho Peterson, Life Science Team: Got it. Maybe just touching on tariffs quickly. Remind us of, you know, your exposure direct and indirect. How is that impacting supply chain, cost structure, pricing, and what mitigation strategies are

Unidentified speaker: in place? Yeah, so as we talked about in our last earnings call, we’re fortunate that our exposure to tariffs is relatively very low. And to the extent we have exposure, it can be very quickly mitigated. So from a sourcing perspective, almost none. We’ve done a deep dive in all of our supply chains, and you know, the only place where there was a possibility for any potential tariff cost increases was on our instrumentation business, but we’ve done a deep dive there, and there’s there’s none to be had there.

So that’s great. So the real focus was more on the customer, and whether it might be potential tariffs on our products to our customers. And initially, the biggest concern was China, when the very high tariffs were initially announced. Both on both our reagents and our instruments. About a month into the initial tariff escalation, quietly, it was never announced, it was sent down through the authorities that our our specific reagents, in addition to other products including airline parts, were exempt from from the tariff increases.

So we only end up experiencing about a month’s worth of tariff costs with regards to our reagents. And going forward, that’s not not a case. With regards to our instruments, those are still we’re still exposed to the tariffs, whether they’re higher or lower. But we have we make instruments in different parts of the world, and they’re very similar in terms of how they’re produced. And so we can very quickly move the product lines that are not currently made in the are currently made in The US to these other countries that can then support the China market from there and be exempt from tariffs.

And we can do all that within within a quarter. And then, not only that, but in terms of thinking about the future, because it’s still a very uncertain state where this tariff situation ultimately lands. We’ve been stocking up our inventories on reagents in both Europe and in Asia to give us a very long lead time of supply that can enable us to move, call it the final fit and finish of these products to China and to Europe, should the escalation revert or go back to where it was or where it was threatened to go. And in doing that, we can very much mitigate any future tariffs because the cost of raw materials is very, very, very low, and that’s the value that would be tariffed.

Tycho Peterson, Life Science Team: And where are you moving manufacturing to?

Unidentified speaker: We haven’t been too specific on that, but I will mention this. We have a facility in Canada, for example, that currently makes some instruments, and that’s one of the places that we’re looking to move. Not looking to, we were actually already in the process of moving some of our instrument not moving, but duplicating the instrument line there.

Tycho Peterson, Life Science Team: Maybe we could spend a minute on China. It’s 88% of, you know, your revenues. Just talk a little bit about what you’re seeing on the ground there. You know, how has customer demand evolved? Any kind of notable trends in purchasing behavior or regulatory dynamics?

Unidentified speaker: Yeah. So, know, we were that was one area from our initial recovery plan that didn’t plan out exactly like we thought. We thought it would be China would start to be in recovery mode in q three, and it it didn’t. It was kind of kind of more of the same. And maybe we’re just a quarter off, I don’t know.

I don’t want to get too ahead of our skis at this point, but we’ve been to China recently, talked to a lot of customers, obviously talking to our team there and our distributors there on a routine basis. And the tone there is very subtly starting to change. I just, know, for the last couple of years it’s been nothing but a pessimistic tone. And the tone has turned more more optimistic here. Not, I don’t want say greatly optimistic, but at least it’s turned more optimistic with regards to how they’re thinking about access to funds in the back half of the year, and going into calendar year ’26.

And, we’ve also seen, since this tariff escalation has died down here the last several weeks, we’ve seen a return to demand in China as well that’s encouraging. So, I don’t want get ahead of our skis because we’ve had some false starts in China before, but it does appear like it’s, know, in the near term anyways, it’s moderating, and maybe even slightly improving in China. With regards to the, you know, the quote unquote stimulus, you know, for us it’s not that material of a deal for us. It’s stimulus, it’s in the past stimulus in China was like a blank check to pretty much buy whatever you wanted. This quote unquote stimulus is a very targeted program to replace old technology with newer technology, and specifically around instrumentation.

Most of our instruments in China are already relatively new technology, so there’s nothing to replace. But we do have some old WES instruments in our Simple Western platform that are out in the field, and those are the ones that we are targeting to replace with our newer JESS instrument. And we should see some upside in that this quarter from those replacements.

Tycho Peterson, Life Science Team: And I guess, maybe talk a little bit about portfolio mix within China. I mean you mentioned Western blots with ProteinSimple, but where is your portfolio strongest in China? And obviously there’s been a lot of focus on substitution, local competition. Where are you seeing the most pressure within the portfolio?

Unidentified speaker: Well, so in China, China actually has our heaviest concentration, relatively speaking, of instrument and instrument related consumable pull through revenue. And within the instruments, biologics, the Maurice instrument is by far our strongest, and Canadians do very well. Simple western is probably the second. And then with regards to, from a competitive perspective, similar to globally, we don’t have a lot of direct competition with our various instrument platforms. They’re fairly unique in their application, in their price point, and it’s mostly, know, a lot of times it’s manual labor that we’re competing against as opposed to any other platform.

And there’s some other just some minor other nuances, but that’s a general observation on that. Where the most competition in our portfolio in China does reside in our reagents, in our core portfolio of antibodies and proteins, but that’s always been the case. And there are, you know, formidable companies in China that are doing doing well, and are good competitors. But, you know, what’s encouraging, you know, for us is whenever you have a situation like we’ve had in China, like now in the last couple years where times are very tough economically. You think, oh my gosh, we must be might be losing share to lower cost China competitors.

Well, it turns out, you know, we spent time with customers there in December, both academic and biotech customers, and asked them, hey, what’s your top criteria for purchasing proteins and antibody reagents? And almost consistently across the board, what we heard number one and number two was quality, lot to lot consistency, availability, and then further down the line was price, and almost last always was China for China. So, at the end of the day, that’s no different by the way than any customer you ask in The US, or ask in Europe or anywhere else. And so what it tells me is that scientists are scientists regardless of what region they work, where they work, they want product that’s going to work the first time. So it’s not to say that we don’t have competition, there’s plenty of it, but there always was, but it hasn’t necessarily gotten any worse because of the situation there.

Tycho Peterson, Life Science Team: And I guess last one on China. What do you think durable longer term growth is for you guys in China?

Unidentified speaker: You know, we’re still bullish on China long term. I know that’s a really unpopular thing to say right now, and maybe it might be even hard to believe. But, at the end of the day, we’re bullish on our whole space in life science tools because the megatrend, I think, still snowballing with regards to our space. At the end of the day, whether you’re in China, The US, doesn’t matter where you are in the world, populations are getting older, they want to live healthier. And I think as important, or more importantly, the science behind it is evolving at a rapid rate.

If there was a lack of innovation, I’d be more concerned, but the innovation is continuing to accelerate. It’s like a snowball. And in China, that snowball is currently smaller, and even a that has the potential to get even bigger because of the population we’re talking about there. And I think the fact that our products, our core reagents, were exempt yet again from the tariff escalations that were announced, I think demonstrates the need for Western life science tools to support ultimately what’s a key of strategic importance to China and the Chinese people and their government, and that’s building sustained healthcare. So, we’re bullish on China long term.

Don’t ever count China out, they’ll get through this, just like we’ll get through this. And, and when they do, I think China will be the fastest growing territory in the region for the next decade. We firmly believe that.

Tycho Peterson, Life Science Team: We can shift over to liquid biopsy. You know, it’s a US focused business, not yet profitable. Maybe talk about the plans to scale it sustainably. Are there specific strategies to expand geographically, improve margins, and accelerate adoption in clinical workflows?

Unidentified speaker: Sure. So that particular that’s part of the Exosome platform. So when we look at the Exo acquisition I’d had, the the lab test that you referenced, and the sort of which is Epi, and also the technology base around Exosome. So the Epi test is a test to help risk stratify somebody that has an elevated PSA score, whether they can do watchful waiting or, shouldn’t they go a biopsy for diagnostic purposes. And, you know, we’ve so we’ve built a channel around that company before we acquired it largely chose that as the way to to validate the whole technology platform.

And, I think I think we’ve done that. We’ve grown well over the years, continue to grow most recently north of 20%. And, you know, that particular business is one that needs to scale to get to profitability. We’ve done a lot on the cost basis side to reduce the COGS. It’s still a couple of years from scaling into a profitable company, but it continues to grow well.

In a competitive space, we have a differentiated offering. I think the other piece of it that’s exciting around liquid biopsy is we’ve taken the platform itself around exosomes and have deployed that in a kitted model, which is more consistent with the balance of our business and where we’ve already got channel established calling on diagnostic labs. End of last calendar, we launched a test for ESR1, which is a target in breast cancer for minimum residual disease monitoring. And so, we have a couple of tests in that same space, and it’s a great model for us because post diagnosis on treatment, it’s multiple tests over time to follow for a recurrence of the disease. And, the exosome as a base to that platform has sensitivity benefits that actually make it very applicable for that space.

And so, we’ve got a runway of menu, and that’s actually seen very good interest and initial uptake in the field. We’ve got a menu of targets in that same model that we’ll deploy the exosome technology for. So, really, we’ve started to now not just have the laboratory piece, but intercalate the base technology into our kit business and the diagnostic side as well.

Tycho Peterson, Life Science Team: Any sense of how big the kit business can be over time?

Unidentified speaker: Well, so minimum residual disease is an area that it’s existed in some, like in chronic myeloid leukemia with BCR ABL, which is another one of our tests. But right now, it’s really expanding because of the therapeutic options that are being developed there. And so, as they’re, like the one for ESR1, as those trials read out, I think it’s a model for where and how treatment is gonna be given. So, think there’s we’re not sure exactly how big because some of that will be dependent on the success of the drugs in the space. But, given the early success that we’ve seen there, I it’ll be probably our growth driver in the oncology segment of the kit business.

Tycho Peterson, Life Science Team: Is that more for community setting, you think, or academic?

Unidentified speaker: So it’ll be in both, and that’s what we see actually, for instance, with our BCRA able test in leukemia, in that for the high throughput labs, it’s actually a great offering because most of our kits focus on a workflow problem or a technology problem for the lab with already existing content that you don’t have to validate new content. It’s got demand, volume, reimbursement. But, the labs have trouble doing it, and we’ll switch a technology for them. And so, that’s for high throughput labs. The savings that they get on workflow are tremendous.

In the community setting, it’s a different value proposition because the tests are easy to do and their quick turnaround time, they can keep the continuum of care in the community. So, we’ve seen adoption by both not at physician office, but at a large physician practice with their own lab. From there up through, I think, the largest reference labs.

Tycho Peterson, Life Science Team: Maybe we can pivot to spatial. You’ve got the integration of the LUNIPOR platform. You launch a combo assay for RNA and protein on the same sample. Obviously, you’re pretty well positioned here in the mid plex spatial market. Can you just talk about how you’re differentiating in that 20 to 40 marker range?

Unidentified speaker: Sure. And so that is where we see the sweet spot. So we play in the translational market in spatial all the way up through clinical. And, in fact, we have a position in clinical for the molecular reagents in the ACD business. About 10% of our business there is strictly clinical through our partners, partnerships with LICA and Ventana.

And then, going back into the translational side, the multi omic nature of the questions that researchers are asking, the questions that pharma are asking is I think a key driver there. And, LUNIPOR is sort of the centerpiece for that, in that COMET instrument integrates. Now, we basically had three separate businesses that we’re combining into an offering. So, we can pull the molecular reagents and the antibody reagents from the protein sciences side of our business all into that same spatial application. And, what the field team has really been excited about, and I think what a lot of our customers like, is that when we go in with that full offering, whereas before we’d be talking about one thing or typically they’re just talking about one thing and missing sort of a cross sell opportunity, and not being able to integrate the two.

Even without the platform, our reagents now will so we have multi omic workflows for even manual kits. And so, we’re really providing, I think, an end to end solution from an automated platform with reagent streams that you can still choose a la carte. Nobody else really offers that combination of molecular and antibody reagents with a platform, if that’s what you need. And, really, we’re seeing that pull from the translational space increasingly into clinical space, not just from our strict diagnostic business, but pointy end of the wedge in, for instance, lymphoma where labs are adopting the platform because they’re looking at panels of both antibodies and now molecular targets, and they’re actually standing up workflows in the treatment of patients for standard LVT model, where we’re seeing that not just the instrument, but the whole system being pulled into clinical practice.

Tycho Peterson, Life Science Team: How about capacity constraints? As demand grows, talk a little bit about expanding production capacity.

Unidentified speaker: Yeah, we a pinch point about this time last year where we did have capacity issues. And, I think we’ve largely worked through those. The instrument’s now been on the market for just under two years. And, as we’ve worked through two things, the sort of infant mortality that you have with any kind of instrument platform as you harden it and do the small engineering tweaks to make it more reliable and easier to service, We’ve also added the multi omic capabilities, which is a whole another set of requirements on that instrument. I think we’ve worked through all of those.

And, the production lines, I think now are we have the capacity to meet demand even with the sort of new features on the platform.

Tycho Peterson, Life Science Team: And that’s the space that’s gotten pretty busy, fairly crowded. How do you think about competition? Who do you kind of typically go head to head with most?

Unidentified speaker: Yeah, so we have, I think, a very competitive platform. Not just because of the integration and everything, but the instrument itself is on just about every head to head measure, we beat the competition. Mostly here, we’re talking about for the instrument, Akoya and Molteni are the main competitors. And, we have a superior box with the complete reagent stream that you can offer. So, we have a very high win rate when we’re going against the competition.

Tycho Peterson, Life Science Team: Great. I know we’re almost out of time here. Just maybe two quick ones. Margins, this has been a debate on you guys ever since I’ve known you. You’ve got terrific margins.

How do you feel about operating margins going forward? And is there a path to drive leverage?

Unidentified speaker: Well, we had great margin performance in Q three, almost 200 basis points year over year of improvement. We took some restructuring cost actions late last year, earlier this year to prepare for what could have been a softer year, and that allowed for the margin expansion that we saw on 6% organic growth. As we look in the very near term here in Q4, we do see margins contracting by approximately 150 basis points. That’s largely driven by the aforementioned tariffs cost that we’ve already had to spend this quarter, as well as the lower expected growth rate. That being said, as we think about going forward, I think we’ve demonstrated, like in this quarter alone, we’ve demonstrated how great the pull through of our revenue is, and when you get that revenue growth, how quickly it can expand margins.

Which is why when we talk about a five year target of getting in north of 35% operating margins, it may seem like a long way for most companies to get there if you’re starting at 31 or 32, but for us it’s not that far away with you know, with decent organic growth. And so, with the great margin pull through we have, we believe we get back to, you know, the markets get back to normal, we get back to first high single digits start there, but then ultimately double digit growth. The margin expansion will rapidly follow on that, and we can still invest in growth for the future at the same time.

Tycho Peterson, Life Science Team: Great. We’re out time, so I think we’ll leave it at that. Appreciate it.

Unidentified speaker: Alright, thank you.

Unidentified speaker: Thanks.

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