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Repligen Corporation reported its second-quarter earnings for 2025, revealing a mixed financial performance. The company posted an earnings per share (EPS) of $0.37, slightly below the forecasted $0.39, marking a 5.13% miss. However, Repligen’s revenue surpassed expectations, reaching $182 million against a forecast of $175.35 million, a surprise of 3.79%. Following the earnings announcement, Repligen’s stock surged by 7.49% in pre-market trading, reaching $128.05 per share. According to InvestingPro data, the stock appears overvalued at current levels, with analysts setting price targets between $130 and $220.
Key Takeaways
- Repligen’s Q2 revenue exceeded forecasts by 3.79%.
- EPS fell short of expectations, declining 6% year-over-year.
- Stock price increased by 7.49% in pre-market trading.
- Strong growth in chromatography and process analytics segments.
- Positive revenue outlook for the remainder of 2025.
Company Performance
Repligen demonstrated robust growth in the second quarter of 2025, with revenue climbing to $182 million, a 15% increase from the previous year. Despite the EPS miss, the company showed strength in its core product lines. Chromatography and process analytics segments reported significant growth, with revenues rising over 40% and 30%, respectively. This performance underscores Repligen’s strategic focus on innovation and product diversification.
Financial Highlights
- Revenue: $182 million (15% increase YoY)
- Earnings per share: $0.37 (6% decline YoY)
- Gross margin: 51.1% (flat YoY)
- Adjusted income from operations: $22 million (8% increase YoY)
- Adjusted EBITDA margin: 17.6% (flat YoY)
Earnings vs. Forecast
Repligen’s EPS of $0.37 fell short of the $0.39 forecast, representing a 5.13% miss. In contrast, the company delivered a positive revenue surprise, surpassing expectations by 3.79%. This mixed performance reflects Repligen’s ability to drive revenue growth, even as EPS faced pressure.
Market Reaction
Repligen’s stock responded positively to the earnings report, rising by 7.49% in pre-market trading. The stock reached $128.05, moving closer to its 52-week high of $182.52. This surge indicates strong investor confidence in the company’s revenue growth and strategic direction. InvestingPro data shows the stock has experienced a -16.88% YTD return, with a Price Momentum Score of 2.27 out of 5, suggesting room for potential recovery.
Outlook & Guidance
Repligen has set an ambitious revenue guidance range of $715 to $735 million for 2025, with an organic growth outlook of 12.5% to 15.5% on a non-COVID basis. The company plans to launch new protein franchise products in the second half of the year and aims to double its size over the next five years, targeting a 30% EBITDA margin in the long term.
Executive Commentary
CFO Jason Garland stated, "We believe this performance reflects solid execution on our differentiated strategy." CEO Olivier Lugio added, "Our vision is to be the global innovation leader in bioprocessing with a comprehensive portfolio of differentiated data-driven solutions." These statements highlight the company’s commitment to maintaining its competitive edge through innovation and strategic growth.
Risks and Challenges
- Supply chain disruptions could impact production timelines.
- Market saturation in key segments may slow growth.
- Macroeconomic pressures, such as inflation, could affect costs.
- Regulatory changes in key markets may introduce new compliance requirements.
- Currency fluctuations could impact international revenue.
Q&A
During the earnings call, analysts inquired about the impact of tariffs and inventory pull-forward on Repligen’s performance. The company reported minimal effects from these factors and expressed cautious optimism about the recovery of the China market. Additionally, Repligen’s gene therapy platform generated €10 million in revenue in the first half of the year, with €3 million recorded in July, indicating ongoing growth in this segment.
Full transcript - Repligen Corporation (RGEN) Q2 2025:
Greg, Call Coordinator/Operator: Good day, ladies and gentlemen, and welcome to Repligen Corporation’s Second Quarter of twenty twenty five Earnings Conference Call. My name is Greg, and I will be your coordinator. All lines have been placed on mute to prevent any background noise. Please note that there will be a question and answer session following the company’s formal remarks. The company would like to note that there will be a limited time frame for Q and A.
And as such, management kindly requests that each individual ask one question to try to accommodate all. Thanks for understanding. And I would now like to turn the call over to your host, Jacob Johnson, Vice President of Investor Relations for Repligen. Jacob?
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation: Thank you, operator, and welcome to our 2025 report. On this call, we will cover business highlights and financial performance for the three month period ending 06/30/2025, and we’ll provide financial guidance for the full year 2025. Joining us on the call today are Repligen’s President and Chief Executive Officer, Olivier Lugio and our Chief Financial Officer, Jason Garland. As a reminder, the forward looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning risks related to our business is included in our quarterly reports on Form 10 Q, our annual report on Form 10 ks for the fiscal year ended 12/31/2024 and our current reports, including the Form eight ks that we are filing today and other filings that we make with the Securities and Exchange Commission.
Today’s comments reflect management’s current views, which could change as a result of new information, future events or otherwise. The company does not oblige or commit itself to update forward looking statements, except as required by law. During this call, we are providing non GAAP financial results and guidance unless otherwise noted. Reconciliations of GAAP to non GAAP financial measures are included in the press release that we issued this morning, which is posted to Repligen’s website and on sec.gov. Adjusted non GAAP figures in today’s report include the following: non COVID and organic revenue and or revenue growth cost of goods sold gross profit and gross margin operating expenses, including R and D and SG and A income from operations and operating margin tax rate on pretax income net income, diluted earnings per share, EBITDA, adjusted EBITDA and adjusted EBITDA margins.
These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to best reflect the performance of our ongoing operations. Now I’ll turn the call over to Olivier.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Thank you, Jacob. Good morning, everyone, and welcome to our twenty twenty five second quarter call. We had another outstanding quarter in Q2 with 17% organic non COVID growth, the highest growth rate since 2022. There were highlights across the portfolio led by chromatography, while filtration posted mid teens non COVID growth. Consumable demand remained healthy and capital equipment grew high teens.
CDMOs had a very strong quarter, while BioPharma continued its momentum with revenues growing 20%. Geographically, trends were consistent globally with all regions growing mid teens in the quarter. Orders grew over 20% year over year and high teens organically, led by strength in Filtration. This marked the eighth quarter in a row of orders exceeding non COVID revenue and the fifth quarter of sequential order growth. We believe this broad based demand across our diversified portfolio and customer space highlights our ability to outpace industry growth.
As a result, we are raising the midpoint of our organic growth guidance. Given the strong order trends we are seeing, we’re investing in manufacturing labor to best serve our customers and preserve our lead times. While there have been a number of macro headlines in recent months, we remain focused on what we can control, which is delivering on our strategy in 2025 and beyond. I’ll speak to this more in a moment, but we believe our Q2 results highlight that by executing on our innovation and commercial strategy, we can deliver differentiated growth. Importantly, should our customers face macro challenges or pricing pressure, our products will enable them to improve yield and productivity.
Customer centricity is core to our foundation, and we will continue to innovate to enable our customers to produce breakthrough therapies in a more efficient manner. In addition, we are encouraged by the traction at our strategic accounts and great execution by our entire commercial team. In short, we’re excited about the momentum in our business, as highlighted by our year to date performance, which demonstrates the differentiated nature of Repligen and the effectiveness of our strategy. Unpacking our performance by end markets, Q2 twenty twenty five BioPharma revenues grew 20% year over year and also grew over 20%. This was driven by recent wins at large pharma accounts as we cross sell our entire portfolio.
Revenue from Emerging Biotechs grew high teens, so orders remain muted. CDMO revenues were up meaningfully while orders grew double digits. This strength was similar across our Tier one and Tier two CDMO customers. Year to date, both revenues and orders from biopharma and CDMOs are up greater than 20%, underscoring the continued momentum from our end markets. Consumable revenue and orders, which exclude proteins, grew greater than 20% year over year, a record revenue quarter on a non COVID basis.
Capital Equipment revenue returned to growth in the high teens, while orders grew greater than 20%. After optimism around our capital equipment center last quarter, it was great to see this convert to orders and revenue this quarter, driven by traction in both ATS and Downstream Systems. From a geographic point of view, growth was consistent across all regions in the mid teens. We would highlight China orders picked up significantly in Q2. While we’re hesitant to call this a trend and there could have been some tariff related dynamics at play in China, this is an encouraging sign.
Coupled with new leadership, we’re optimistic about China returning to growth in 2026. And outside of China, APAC orders nearly doubled sequentially. Given this momentum, we’re investing more in this region. New Modalities revenue grew mid teens in the quarter. Demand was fairly broad, including a pickup in cell therapy activity.
With orders essentially flat in the quarter, our guidance now assumes new modality demand will be muted in the second half. While we don’t typically comment on customers, given recent headlines, we wanted to share the following incremental detail this quarter. The gene therapy platform represented €10,000,000 of revenue in the first half of this year and we have already recognized €3,000,000 more in July. Our updated guidance assumes minimal incremental revenue from this platform for the remainder of 2025, which represents a 1% headwind versus our prior guidance. Momentum in biopharma, consumables and hardware along with 20% order growth in the 2025 gives us confidence to increase our organic growth outlook despite that headwind.
Our revenue guidance of €715,000,000 to €735,000,000 reflects 12.5% to 15.5% organic non COVID growth. Jason will provide more details shortly. We recently completed our annual strategic planning process, and I would like to give you a brief update. While this is an internal exercise, we thought in the current environment, it might be helpful to share a few highlights as it relates to our outlook. Our vision is to be the global innovation leader in bioprocessing with a comprehensive portfolio of differentiated data driven solutions across therapeutic modalities.
All of this is backed by a mission to inspire advances in bioprocessing as a preferred partner in the production of biologic drug that improve human health. As we reflect on the last decade, we have utilized M and A and R and D investments to add innovative products to our portfolio while diversifying our customer base and product offering. As we look ahead, we will continue to maintain customer trust through quality and service, work to cross sell our portfolio by focusing on key accounts and be fit for growth. In addition, we see growth opportunities including Asia, modalities like ADCs and cell therapy and trends like digitization. These are key focus areas for future growth at Wapigen.
We think this results in our ability to outpace industry growth by 5%. Given this organic growth strategy, our strategic plan lays out a path to doubling the size of the company in the medium term with only modest M and A assumptions. As our top line grows, we will remain focused on profitability to drive gross margin expansion and operating leverage. Next, given the strong trends in capital equipment in the quarter, I wanted to touch on our system strategy. We embarked on this journey several years ago and our portfolio now spans more to larger scale systems across our filtration and chromatography franchises.
In addition to automation, configurability and simplicity benefits, we have integrated our PAT capabilities into these systems and will continue to do so. The strength we have seen in hardware over the last twelve months is a positive leading indicator. Capital equipment placements will drive services and consumable pull through in coming years similar to the benefits we are seeing with ATS today. This is another example of innovation driving growth. We plan to run the same playbook with the nine zero eight bioprocessing portfolio for the upstream workflow.
As it pertains to tariffs, we said last quarter we would leverage our global network to charges and pricing where appropriate. With modest investments, we anticipate by next year, the vast majority of our portfolio will have dual manufacturing in The U. S. And Europe, which should position us well in this new trade environment. We have been passing surcharges through to customers.
Finally, we have taken price actions to offset related inflation. The net result is a slight benefit to our 2025 revenue and a modest headwind to margin. Finally, I wanted to highlight that we published our 2024 corporate sustainability report in May. We take a pragmatic approach to advancing our sustainability related ambitions. For example, we reduced our waste generation by 25% last year with the help of our Repligen Performance System.
As a testament to our efforts, we were honored to be named by Newsweek as one of the world’s greenest companies in 2025. Before I turn the call over to Jason, I’ll provide an overview of our franchise level performance. Filtration revenue grew mid teens excluding COVID in Q2. ATF, Systems and TFF consumables were all meaningful contributors to this growth. Filtration orders were very strong as we had a record quarter for ATF order intake and as mentioned earlier, good traction on Systems.
We expect our hardware portfolio to complement healthy consumable demand to drive further filtration growth in the back half of the year. Chromatography had a record quarter with greater than 40% revenue growth. This was driven by large scale column demand from Pharma and Europe as our Q1 orders translated to revenue growth in Q2. With recent pharma customer wins, we did have a higher than normal mix of procured resins in the quarter. Chromatography orders grew low double digit in quarter two.
After a very strong quarter one, proteins posted high single digit growth in quarter two. This was driven by chromatography resins and ligands. After a very strong first half, our guidance assumes lighter proteins revenue in the second half. We are continuing to develop custom and catalog chromatography resins with several product launches planned for the second half of the year. Process Analytics grew over 30% in quarter two with €3,000,000 of revenue from the nine zero eight bioprocessing acquisition and 12% organic growth.
This was mainly driven by consumable and service uptick. Process Analytics orders grew north of 20% in Q2, which was 12% organic. We have largely completed the initial integration of the nine zero eight bioprocessing assets, moving their Boston operation to our Marlborough facility. We have also cross trained both C Tech and nine zero eight commercial team. To summarize our Q2 performance, 17% organic non COVID revenue growth showcases the bioprocessing recovery continues to play out as well as our differentiated product portfolio.
Our order and funnel trends suggest this momentum should continue into the second half of the year. As a result, we are confident in our updated 2025 outlook and delivering above market growth. Now I’ll turn the call over to Jason for financial highlights.
Jason Garland, Chief Financial Officer, Repligen Corporation: Thank you, Olivier, and good morning, everyone. Today, we are reporting our financial results for the 2025 and providing an update to our financial guidance for the full year. Unless otherwise mentioned, all financial measures discussed reflect adjusted non GAAP measures. As shared in our press release this morning, we delivered second quarter revenue of $182,000,000 This is a reported increase of 15%. We were up 11% on an organic basis, which excludes the impact of acquisitions and currency and up 17% on an organic non COVID basis, which we believe best reflects our underlying performance in the quarter.
Acquisitions contributed approximately two points of the reported growth, while foreign currency was also a two point tailwind. As Olivier offered perspective on our product franchise performance, I’ll provide more detail on our global regions. Starting with quarterly revenue, North America represented 49% of our total, Europe represented 38% and Asia Pacific and the rest of the world represented 13%, with Europe gaining some share since last quarter. We saw equally strong performance across all three regions, each growing in the mid teens. Asia growth was led by ATF.
Europe growth benefited from Opus, NGINX and Systems, while North America growth was broad based across all four franchises. For orders, APAC and the rest of the world bounced back with strong growth, while Americas grew nearly 20% and EMEA orders were up mid teens. While China revenues declined, it was encouraging to see orders from China rebound to north of 40% year over year and more than double sequentially. Even with some likely pull forward of a couple of million dollars of revenue, we saw early wins from our new leadership in the region as Olivier mentioned earlier. Transitioning to profit and margin, gross margin of 51.1% was flat on a reported year over year basis as strong volume and productivity overcame a tough comparison from COVID revenue, which is a one point benefit to margin in the prior year.
In addition, mix was a three point headwind in the second quarter versus last year, driven by a higher than normal mix of Repligen procured resin for Opus columns. We expect that mix to be at more normal levels in the second half. Tariffs were a slight headwind to margin in this quarter. First half gross margin was 52.3% and as a result we still see gross margin at 52 to 53% for the year. Continuing through the P and L, our adjusted income from operations was $22,000,000 in the second quarter, up 8% year over year on volume leverage.
This increase is driven by $12,000,000 higher gross profit from higher sales and the gross margin discussed earlier, offset by an increase in operating expenses. Adjusted OpEx grew 9% on an organic basis, which is approximately half of our organic non COVID revenue growth of 17%, both exclude the impact of acquisitions and foreign currency. We continue to make strategic investments to support future growth. This translated to an adjusted operating margin of 12%. Margins declined 80 basis points year over year due to the aforementioned COVID and mix headwind along with a point headwind from recent acquisitions.
This more than offsets price, volume and productivity benefits. Our second quarter adjusted EBITDA margin was 17.6% flat year over year. Adjusted net income was $21,000,000 a $1,000,000 year over year decline. Higher adjusted operating income was offset by $3,000,000 of lower interest income and higher tax provisions. Our second quarter adjusted effective tax rate was 22.7% in line with our full year guidance.
Adjusted fully diluted earnings per share for the second quarter were $0.37 compared to $0.40 in the same period in 2024, down six percent year over year also affected by last year’s high margin COVID business. Finally, our cash position at the end of the second quarter was $7.00 $9,000,000 up $12,000,000 sequentially. This was driven by cash flow from operations. We are very happy with the strong first half results delivering above market revenue growth and margin expansion, which positions us to deliver on our improved outlook. I’ll speak to adjusted financial guidance, but please note that our GAAP to non GAAP reconciliations for our 2025 guidance are included in the reconciliation tables in today’s earnings press release.
Our guidance includes tariffs and updated foreign currency assumptions. As highlighted earlier by Olivier, we are increasing our organic revenue growth midpoint as we narrow towards the high end of the guidance range. We now see 10.5% to 13.5% organic revenue growth, which increased from 9.5% to 13.5%. This represents 12.5% to 15.5% organic non COVID growth. We are increasing our organic growth expectations despite the aforementioned headwind from new modalities.
We are now assuming a 1% benefit from foreign currency versus our prior assumption of a 1.5% headwind. Putting this together, we are increasing our 2025 revenue guidance to $715,000,000 to $735,000,000 up from $695,000,000 to $720,000,000 or an increase of $17,500,000 at the midpoint. To provide a clear walk of this midpoint increase, it is driven by $7,500,000 of overall portfolio strength, which more than offset $7,000,000 of gene therapy headwind. In addition, we expect a couple of million dollars of tariff surcharges, which incorporates this past weekend’s agreement with Europe and the remaining $15,000,000 increase reflects the benefit of foreign currency changes. Regarding our revenue cadence, our normal seasonality would suggest third quarter revenue would be below the second quarter.
But given the momentum we are seeing, we expect the third quarter to be in line with the second quarter. That said, the fourth quarter will represent our strongest revenue and margin quarter for the year. In terms of growth by franchise, we expect the following: filtration growth of 10% to 12%, up from 9% to 12%. This represents 13.5% to 15.5% non COVID growth. Chromatography growth of greater than 20%, up from 10% to 15%.
Our proteins outlook of 10% to 15% is unchanged and PAT will grow approximately 25% versus our prior guidance of 20% to 25%, including the nine zero eight bioprocessing acquisition. We continue to expect to deliver adjusted gross margins in the range of 52% to 53%, which represents 160 to two sixty basis points of year over year margin expansion, driven by volume leverage, pricing and manufacturing productivity, offset primarily by inflation in some 2024 COVID sales drag. Our guidance assumes a slight headwind from tariff surcharges, offset by some benefit from foreign currency. We now expect our adjusted income from operations to be between $98,000,000 to $103,000,000 while maintaining our 13.5% to 14.5% adjusted operating margin guidance. The $2,000,000 increase at the midpoint versus prior guidance reflects the top line momentum we have seen year to date.
Relative to our prior outlook, foreign currency adds close to $4,000,000 of operating expenses. We’re also continuing to make strategic investments in expanding our global commercial team and ensuring we are fit for growth across our business processes and functions. That said, we will continue to manage our organic investments and operating expenses at a rate that is lower than our organic sales growth as we balance cost efficiency with investments that are critical to support future growth. Continuing through the P and L, we are updating our adjusted other income guidance to $22,000,000 to $23,000,000 or $1,000,000 lower than our prior guidance due to lower interest income assumptions. Our 2025 adjusted effective tax rate expectations are unchanged at 22% to 23%.
Given these dynamics, we now expect our adjusted fully diluted earnings per share to be between $1.65 and $1.72 a $0.1 increase at the midpoint from our prior range, which represents 5% to 9% growth versus last year. Our balance sheet remains strong as we ended the second quarter with $7.00 $9,000,000 of cash and we are well positioned to manage the current environment. We will remain prudent in our spending while maintaining flexible dry powder for potential acquisitions. We still expect CapEx to be down 20% to 25 versus 2024 with our spending back to pre COVID levels. As we wrap, we are encouraged by our strong first half financial results, especially considering some of the headwinds we continue to face from recent new modality headlines.
We believe this performance reflects solid execution on our differentiated strategy. Olivier and I would like to thank our Repligen teammates for helping us to navigate a unique environment while delivering above market growth. With that, I will turn the call back to the operator to open the line for questions.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Thank you.
Greg, Call Coordinator/Operator: And please note there will be a limited time frame for Q and A. As such, management kindly requests that each individual ask one question to try to accommodate all. Thank you. And it looks like our first question today comes from the line of Puneet Souda with Leerink Partners.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Puneet, please go ahead.
Puneet Souda, Analyst, Leerink Partners: Great. Thanks, Olivier, Jason, Jacob. Maybe first question, just given the order book strength you’re seeing here, and thanks for the color on CDMOs and biopharma, Could you elaborate a bit on the growth that you’re seeing on the clinical trial side versus the commercial campaigns? We saw uptick among the CROs in the quarter. So just wondering if you’re seeing any of that.
And then a broader, more important question here is, how much of any of this pull is a result of a pull forward from pharma and CDMO customers that are manufacturing to get ahead of the tariffs and move inventory into U. S? So we’ve been getting that question and just wanted to see what your customers are telling you. And is there any element of pull forward here?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Hey, good morning, Puneet. Yes, thanks for the question. I think I’ll start by answering the second question. So we’ve seen really very little pull forward, at least as we are aware of, apart probably from China, where we think maybe a couple of million were indeed pulled forward because of the uncertainty, particularly during the first two months of the quarter about where tariff would land. So probably a couple of million in China, but outside of China, we’ve really not seen anything like that.
And we would probably not be the first company seeing that for the reason that we are more and more clinical than commercial still today. That’s probably a good link then to your first question, which is have we seen any changes lately on the behavior of our customers? Honestly, not really. I mean, as you know, we think last year, we landed with probably about 35% of our business with commercial products, 65% clinical. It’s probably fair to assume the commercial percentage is higher now today.
We were just updating it once per year, but I guess it’s going to be higher because of the traction we have on ATS, the traction we have on fleet management and the great results we get from our key account management team, but we don’t have an exact number for the time being here.
Puneet Souda, Analyst, Leerink Partners: Got it. That’s very helpful. And then just briefly on the gene therapy side, I appreciate your sizing the Sarepta headwind. Trying to understand, broadly speaking, across all of the AAVs, can you maybe size your exposure? And how should we think about this customer going into 2026?
Are you assuming anything there? And lastly, if I could, we all get twenty twenty six questions. Anything you can provide there at a company level would be helpful. Thank you again.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes. So as you know, we typically don’t comment on customers and specific programs. But given the recent headline we’ve seen on that specific platform program, we’ve decided to be a little bit more specific this time. So again, what we’ve been saying is that we’ve got very de minimis extra revenue expected to come for the rest of this year. And for the time being, we obviously don’t comment about 26% and even less on specific program.
I mean, it’s very early to say anything about what’s going to happen. You probably heard about the latest news last night that the FDA apparently has given the right again to sell to the ambulatory patients population. So it’s definitely too early to say anything at this stage. In terms of the overall new modality business, I mean, for us this year, it’s still an important one. I mean, we had very nice growth in the first half of the year about 10%, which is if you compare it to the overall growth of the business of 15% for the organic non COVID growth, it’s a little bit lower, but it still means that the business is still doing pretty well.
And we are still very bullish about the future, but we just want to play across all of these new modalities and where maybe gene therapy has got more headwinds today. We see a lot of good stuff happening on the cell therapy side, ADC as well, and we’re definitely going to continue to innovate and make sure we support those customers in those new modality arena. And as far as 2026 is concerned, we never comment in advance and we’re only putting it, we’re going to tell you that when we report our Q4 results 2026.
Puneet Souda, Analyst, Leerink Partners: Got it. Appreciate it. That’s fair. Thank you.
Greg, Call Coordinator/Operator: Thanks, Puneet. And our next question comes from the line of Matt Larew with William Blair. Matt, please go ahead.
Matt Larew, Analyst, William Blair: Good morning. Two areas where your results and comments stand out are on capital equipment and China. Curious if you could talk about both those on capital equipment, maybe what you’re seeing in terms of maybe new account wins or new penetration versus replacement that might be a difference. And then on China, you referenced having a new team there, maybe some pull forward, but also doing some investing because you’re encouraged by what you see. So just to hearing about what you saw in the quarter that was encouraging on both those sides.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes. Thanks, Matt. Good morning. So let me start with capital equipment. Yes, we’re obviously very delighted by the performance we’ve had in quarter two.
You might remember like we were pretty optimistic in quarter three and quarter four of last year, but then for me quarter one was a little bit lower. So it was really great to see like all of this funnel we were talking about in quarter one to materialize and generate both very high sales and orders in the quarter two. So we think it’s probably very much linked to the differentiated nature of our systems. As you know, we are including our PAT technologies in many of our systems right now. In fact, I think 25% of any system we sold in the beginning of this year is including this FlowVPX technology.
So that’s definitely helping us a lot. I would also add like we are still a small actor in the field. Mean, so it’s obviously easier to grow faster when you’ve got a smaller part of your business on that side. But we still feel like the differentiating nature of our portfolio both on the ACF side, but also downstream for both TFF and Chrome is enabling us indeed to win some market share here. And then talking about China, yes, you’re right.
I mean, we want to be a little bit careful here because we’ve had so many quarters in a row of a difficult situation like we were extremely happy to see such a huge rebound of orders in the quarter two. In fact, our orders grew more than 40% versus quarter two of last year. So we do think there is a little risk of acceleration here. That’s why I mentioned earlier probably for a couple of million. I think beyond that, we are delighted by having our new team in place both at the Global Asia, but also at China leadership.
And we start to see a huge difference on customers reopening doors to us and listening to the great innovation we are capable to sell. I’m very bullish on China as you heard previously. I think this market is going to start to grow again very nicely from 2026 onwards and we want to play a big role down there for sure.
Matt Larew, Analyst, William Blair: Okay. Thank you. And then as a follow-up, biotech up high teens, your reference orders remain muted, but that was down high single digits last quarter. So maybe just trying to get a sense whether there’s fits and starts here, whether it’s larger orders or perhaps a couple of accounts that are driving it. Just trying to assess kind of the flipping growth this quarter and how we should think about that going forward.
Thank you.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes. No, there is still one of the market segment that I’m very, very careful about that is still this small biotech one. And yes, it was great to see our sales going up significantly this quarter, high teens as you mentioned, but indeed orders were muted. So as we do like probably everybody else, we’re tracking the funding of biotech and not only Q2 funding was not very high. I mean, it was a little bit higher than quarter one at EUR 8,700,000,000.0 versus EUR 8,000,000,000, but this is still a drop of 42% versus 2024.
So obviously, there is still some headwind on that side. We were happy by sales, but we are not sure we can still claim victory on that side.
Greg, Call Coordinator/Operator: All right. Thank you, Matt. And our next question comes from the line of Dan Arias with Stifel. Dan, please go ahead.
Dan Arias, Analyst, Stifel: Yes. Good morning, guys. Thank you. My one question is just a clarification on the outlook here. Jason, the 1% headwind that’s been worked into the guide, that sounds like it’s directly tied to the specific platform that you mentioned, so not really adjusting for pressure at the industry level.
But you mentioned the assumption for new modalities is muted in the back half. So can you maybe just more explicitly talk to, account specific expectations versus what you’re now thinking for the overall new modalities class? And then how that’s changed and how that relates to the growth outlook for the year? Thanks.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes. So I think I’ll take this one, Dan. So I think indeed you’re right. I mean, with the headwind we mentioned 1% is coming from that specific platform. But the good news is we are capable to more than compensate for it, which is why thanks to the portfolio strength, that’s why we decided to increase our guidance for this year.
And if you think about it, it’s really across the board. I mean, remember, like the majority of our business is going into monoclonal antibodies and the monoclonal antibody market is doing very well and we’re benefiting from a lot of win across our entire portfolio. So that’s really where we are. We are seeing so much goodness really during the last two quarters with orders now that are year to date up more than 20% that this is going to be more than capable to compensate for that specific headwind on that new modality program. But beyond that one, I mean, new modality has still been doing pretty well.
I mean, mentioned earlier, we’ve been growing 10% so far. We indeed estimate that probably sales will be more muted in terms of growth during the second half, but that’s going be more than being compensated by the rest of the portfolio here.
: All
Greg, Call Coordinator/Operator: right. Well, you, Dan. And our next question comes from the line of Doug Schenkel with Wolfe Research. Doug, please go ahead.
Dan Arias, Analyst, Stifel: Good morning, everybody, and thank you for taking me on the call. One topic, the revenue growth outlook. You talked about growing five points better than market growth. First, what do you think market growth is? Our model supports an outlook in a normal period for high single digit to low double digit growth for the category.
Does that seem reasonable to you? Second, does five points hold up even if new modalities remain under sustained pressure? And then third, you talked about doubling revenue in the medium term. Could that be as soon
Doug Schenkel, Analyst, Wolfe Research: as three years? Thank you.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Okay. So a lot of questions, Doug. I’m going to try to remember all of them. So the first one really is, yes, we’ve always said we estimate this market to be growing anywhere between 812% prior to COVID. I mean, at least from what we’re seeing from a Repiegen point of view, we think bioprocessing is really almost back to where it was before COVID.
So yes, you would say probably a tax year is going be 8% growth, a good year would be 12%. And we think like with what we have right now in our portfolio, and again, that’s one thing I liked among others in this quarter is every single franchises have been doing very well. So that’s a good signal for us that we’re going to be indeed capable to grow faster than the rest of the market. Think I’ll capture your last question first now and then go back to the second one. In term of the doubling of the size of our business, our stress plan is typically five years.
And I think everybody understand midterm to be five years. Obviously, what’s moving piece here is the M and A activity that might happen or not happen in the next five years. We said like we are counting on modest M and A to be able to double the business, which doesn’t mean we’re only going to do modest M and A. But in order to double the business, we would only need modest M and A to achieve that. But for us, the strat plan is five years typically.
And then do you want to repeat your second question maybe?
Dan Arias, Analyst, Stifel: Yes. It was really just about the sorry, the five points better than market. Does that hold up even if new modalities remain under sustained pressure?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: No, that’s it. So no, absolutely, Doug. And again, you heard me repeating several times, the way we operate is to make sure we are working across multiple modalities, across multiple customers and at each of these customer across multiple programs they have as a customer. And that’s why we mentioned several times that on new modality, we constantly have about 20 plus customers that are generating more than US1 million dollars of sales. In fact, in quarter two, we had five of these customers generating more than US1 million of sales.
And then I mean, where maybe there is more headwind today on gene therapy, we are starting to see a lot of excitement and great opponents coming from cell therapy, but also on the ADC side as well. So and luckily enough, we decided to add one specific resources about six months ago to focus on some of these other new modalities. So yes, we’re absolutely confident about being able to deliver that 5% above market growth even with some of the potential headwind and some specific new modalities today, yes.
Dan Arias, Analyst, Stifel: Great. Thank you very much.
Greg, Call Coordinator/Operator: Thanks, Doug. And our next question comes from the line of Rachel Vlatendal with JPMorgan. Rachel, please go ahead.
Rachel Vlatendal, Analyst, JPMorgan: Perfect. Good morning. Thanks so much for taking the questions. I wanted to dig into the equipment trends you saw in the quarter given the strength in equipment revenues, but also orders. We’ve heard from a few of your peers in the industry calling out a pause in equipment orders due to that global trade uncertainty.
So can you spend a minute talking about your conversations with customers given that backdrop? Did you see any pause in equipment orders due to that global tariff dynamic?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Good morning, Rachel. No, not really, honestly. Again, if you look at the last four quarters for us on equipment, the anomaly for us was really quarter one. Because we with all of the product launches we’ve had now over the last two to three years, both on the ATS side, but also Chrome and TFF systems, we built a very strong funnel. So for me, really, I normally was more Q1 where there was a lot of delays of customers making the decision to buy those equipment, where in quarter two, we’ve seen a very big difference on that side.
And again, as I mentioned earlier, our systems are very differentiated. Also to be fair, we’ve got a pretty small market share. So it’s easier to grow faster when you have a small market share than when you have the market in your hands. So that’s definitely how it played out. And then from a geographical point of view, I would say we’ve been growing very nicely across those three regions.
So we’ve really not seen any specific behavior from U. S. Customers with the potential upcoming on shoring of investment or with some of the customers in Asia either. So it’s really very much across the board here.
Rachel Vlatendal, Analyst, JPMorgan: Great. And then a quick follow-up. Just on AAV exposure. You had previously disclosed that last year new modalities were roughly 18% of revenues and you’d estimated that roughly two thirds of that was tied to AAV, which would imply roughly 12% of total company revenues. Given all the moving pieces the last few months and even what you’ve kind of given us on this call, can you provide us some updated estimates on your total AAV exposure for this year?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes. No, no, I will, Rachel, and that’s a great question. As you know, we typically update the exact number only once per year at the end of the year. But obviously, for with the current headlines and so on, we will look a little bit deeper. So I’ll start by telling you this year so far, new modalities represented 17 of our sales.
So it’s down a little bit compared to last year. And if you look at growth across the board, I mean, we’ve been growing 10% on new modalities, where the rest the entire company has been growing 15%. So it’s obvious that some of these headwinds have already slowed down a little bit the growth that could have been even higher, in fact, if new modalities would have been doing better. So we also check whether because it’s always very difficult. And we mentioned that several times.
I mean, there is so much about where your product are we going into, partly at CDMOs, are in many cases reluctant to give you the exact number. So we estimate that the AAV component of our new modalities is lower than what we thought at the end of last year. And for different reasons, we deep dive much more than we did probably earlier. But also we’ve seen new modalities picking up very nicely, one of them being cell therapy, where we’ve seen a very big growth happening, particularly in quarter two versus quarter one and versus quarter two of last year. So overall, yes, gene therapy is still an important modality for us.
The last piece I would mention is beyond that specific program, we’ve seen actually no slowdown from any of the other customer. And then you know like every technology in gene therapy is very specific and has got a different viral load and so on. So it’s actually I think it would be dangerous to put everybody in the same basket at this stage here.
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation0: That’s helpful. Thanks guys.
Matt Larew, Analyst, William Blair: Thank you.
Greg, Call Coordinator/Operator: Thanks Rachel. And our next question comes from the line of Luke Surgatt with Barclays. Luke, please go ahead.
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation1: This is Salem Salem on for Luke. Thanks for taking our questions. I just want to drill down into the equipment strength again here. Was this mostly seen on the filtration side? I mean, what was kind of the main driver if not?
And if you could size the ATF business now currently as a percent of revenue, that
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: would be appreciated. Thank you. Yes, sure. So the vast majority of our equipment is going into filtration. Because if you think about it, it’s ATF on the one side, which is filtration and then it’s our TFF system, which is a majority of our downstream system sales today.
So the vast majority of our sales are going into filtration for equipment in India.
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation1: Got it. That’s super helpful. Thank you. And then kind of a cleanup question here. What’s your split between equipment and consumables currently?
I believe it was around fifty-fifty a couple of years ago. Are you still in that ballpark today?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: No. The split is seventy-thirty. Again, to be updated at the end of the year as well. I mean, I would think we are going to slowly but surely see even more consumables than equipment because that’s the way it works for bioprocessing company. I mean, every time you sell other equipments, you’re going to get the revenue on consumable for the next five to ten years.
So it’s going to probably move towards a bit more consumable in the future. But at this stage, we estimate it’s about seventy, thirty years. Got it. Thank you. Thanks for
Greg, Call Coordinator/Operator: the question. And our next question comes from the line of Paul Knight with KeyBanc. Paul, please go ahead.
Doug Schenkel, Analyst, Wolfe Research: Congratulations on the quarter. Clearly, there’s a tremendous momentum
Dan Arias, Analyst, Stifel: in
Doug Schenkel, Analyst, Wolfe Research: the CAR T market right now. What technologies really fit from Repligen and what’s your view on CAR T right now? Yes. Good morning, Paul.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Really good question. I mean, what we are really excited about lately is we start to see a lot of cell therapy customers starting to use our ATF technology. I mean, it’s pretty obvious when you think about it because a cell therapy is all about getting a maximum amount of sales. So how do you get that? And I know ATF is the obvious solution for that.
So this is really one of the driver for us where we start to see much more CAR T customers coming to us. But one of the thing I’ve said several times already is all of these new modalities are going through two ways. I mean, you’ve got the first waves where everybody is excited about it. And then you enter into a bit of hangover period where people start to see cost of goods are more challenging, where people start to see from a regulatory point of view, it’s more challenging than expected and so on. And then comes the second wave.
I really believe we are entering into that second wave right now for cell therapy. And it’s not only CAR T, I mean, we see kind of the same happening lately with allogeneic as well. So I personally think that cell therapy in general will be entering into that new phase of growth. And we as a very innovative bioprocessing company, we have a very important role to play on that side for sure.
Greg, Call Coordinator/Operator: Is your
Doug Schenkel, Analyst, Wolfe Research: quiet optimism on China due to the fact that they seem to be a rapidly developing originator?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes, that’s part of it, obviously, Paul. I mean beyond that is look at the amount of money that is being injected right now into the system. Then some of you might have heard me saying earlier, one of the main reason why China went through a real turmoil during the last several years was not so much because of the geopolitical issues, but was mostly because the government has decided to shift completely from focusing on biosimilars to focusing on innovation innovative drug development. And here we are now five years later, where they’ve done so much on the antibody side, partially by specific, but also antibody drug conjugate that this country is now the second largest pipeline of innovative drugs on the market. And that we see a lot of U.
S. And European companies starting to buy IP from China. So when you look at the billions of U. S. Dollar that are going to be injected back in the China ecosystem, it’s obvious that there will be a lot of good business to make down there, which is why we bought that new leadership and why we’re starting investing quite heavily in China in
Jason Garland, Chief Financial Officer, Repligen Corporation: particular. Thanks, Olivier.
Greg, Call Coordinator/Operator: Thank you. And our next question comes from the line of Justin Bowers with Deutsche Bank. Justin, please go ahead. Justin, you may be muted.
Doug Schenkel, Analyst, Wolfe Research: Thank you. Good morning, everyone. Can you help us understand what the strategy session revealed about the margin trajectory over the next five years, both gross margins and EBIT? And then drilling down a bit more, just some moving parts on the margins for this quarter and the outlook for the next year. I’m a little confused about tariff and FX.
Thank you.
Jason Garland, Chief Financial Officer, Repligen Corporation: Yes, sure. So again, with the strap plan that we went through, a lot of focus on how we can grow the top line in the markets. But to your point, we bring that down to the gross margin and the operating or EBITDA margin level. So again, we continue to see a path for margin expansion year over year over that next sort of five year window, still targeting to get towards the 30% EBITDA. So that will be in the cards.
It will be a mix of continuing to drive productivity within our footprint and manufacturing plants, driving volume leverage and obviously the ability to take price, I’ll say, modestly through the course of the period. So a good outlook. For the year or for the quarter, just for the quarter, look first, I’ll start with the year sort of view.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Look, we continue to
Jason Garland, Chief Financial Officer, Repligen Corporation: see a path to expand margin in 2025 consistent with our guidance. There’s no change. We see we expect 160 to two sixty basis points for gross margin margin rather and 60 basis to 160 basis points for operating margin. We started the year really well in first quarter, right? And a lot of that was some benefits from protein, and the mix that came with it.
So that reversed in the second quarter. And then we also called out that we had a high amount of chromatography sales in the quarter, and in fact, the highest quarter of resin pass through. So this is resin that we procure and then sell within our Opus columns at a very slight markup. And so that mix alone was north of 300 to three fifty bps of sort of sequential, call it, pressure. From an operating margin, we also had now 9.8% that we consolidated for a full quarter, right?
We only had one quarter in one month rather in 1Q. And so, though FX was a help, it was a benefit. Tariffs was a little bit of a drag, but then all that we also generated north of two fifty basis points of margin increase from volume in the operating performance. So we’re north of 52% gross margin for the first half. We expect about 100 bps sequential pickup in the third quarter versus 2Q from kind of unwinding that unfavorable mix and then another step up, probably 100 bps in the fourth quarter just on highest volume or high volume with fourth quarter being our highest sales quarter.
So and then for that will fall through to op margin. And then we expect our OpEx to remain flattish through the year. We had a couple of discrete kind of onetime items in the quarter that unwind, and then we’ll continue to invest and drive commercial spending and fit for growth investments. So I think we’re balancing this mix of strategic investments for growth and disciplined cost management for margin expansion.
Doug Schenkel, Analyst, Wolfe Research: Thanks, Jason. Quick follow-up on the pricing. What is the pricing assumption over the interim or the strategic period? And how that tracking this year in 2025?
Jason Garland, Chief Financial Officer, Repligen Corporation: Yes. We assume low single digit, and that’s what we’ve achieved so far this year for the first half. Again, it’s similar to what we’ve achieved or we would assume for the five year period.
Doug Schenkel, Analyst, Wolfe Research: Thank you.
Greg, Call Coordinator/Operator: Thanks, Justin. And our next question comes from the line of Matt Hewitt with Craig Hallum Capital Group. Matt, please go ahead.
Jason Garland, Chief Financial Officer, Repligen Corporation: Good morning. Thanks for taking
: the question. Maybe as you look at the back half of the year and maybe even start to think about 2026, how should we be thinking about new product launches? And are there any key launches that you might want to call out as potential drivers as part of that five year process? Thank you.
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes. Good morning, Matt. So as you know, we launched already two key products this year. We launched a new version of our analytical C Tech protein concentration, Solo, SoloVPN Plus. And then we also launched our mixers based on the Methanova technology, single use mixers at the ’2.
So next big launches for us will be across the protein franchises, where we’ve got multiple resin that are going to be launched mostly targeting new modalities, but that’s really across different modalities in the second half of this year. And in terms of these products generating sales in the very short term, typically, there is a bit of a lapse of time between the time you launch a product and the time you start to regenerate a lot of sales, which can be up to about a year or so. There have been some exception. I mean, as we mentioned earlier, partly on the Rigging side, one of the product last year generated really important sales right after. But in most cases, there is a little bit of lapse of time between the launch and generating significant sales here.
: Got it. Thank you.
Greg, Call Coordinator/Operator: All right. Thanks, Matt. And our final question today comes from the line of Subbu Nambi with Guggenheim Securities. Subbu, please go ahead.
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation0: Hey, guys. Thank you for taking my question. Olivier, thank you for sharing all the details. Investors would be tangible KPIs to track represents progress towards the 5% growth of the market that you mentioned today. It would be really helpful if you could walk us through any big wins for ATF or any of the major products perspective either this quarter or something that we’re anticipating in the second half?
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation: Supa, can you repeat the question?
Greg, Call Coordinator/Operator: Your line is a little bit fuzzy. Very choppy.
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation0: So investors would like tangible KPIs to track Repugen’s progress towards the 5% growth above the market that you mentioned today. It would be really helpful if you could walk us through any big wins for the ETF or any of the major products you expect in this quarter or in second half?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: We track that. Okay. Yeah. Your voice is very difficult to understand. But I think I understood what KPIs are we tracking to make sure we deliver 5% more than the rest of the market.
So I mean, we track a lot of KPIs, be sure about that. I mean, one of them is and we didn’t talk about it this time is with the funnel we have because beyond obviously the order intake and I didn’t mention it, but we have not we’ve just had eight quarters in a row now where our orders were higher than sales. And as you know, we brought that book to bill concept several quarters ago. Now it’s eight quarters for us in a row where we’ve been significantly above one. But also it’s five quarter in a row that our orders have been increasing sequentially.
So the only other stuff I didn’t mention yet is funnel because obviously when your order grows that fast, there is a risk that your funnel is slowly but surely becoming lower. The good news is our funnel still keep on growing as well. I mean, we in fact, it’s mid teens higher than it was a year ago. So that’s one of the stuff we’re tracking really very closely. In fact, every week, I’m getting an update on my funnel to see how it’s doing and so on.
And then in terms of franchises, again, mentioned every franchises have been doing really well. So it’s not that we’re tracking one versus the other. Obviously, everybody talks about ATS because we know we have a lot of traction. I mean, had a record quarter of orders in quarter two for ATS, but that’s just one product among many others where everybody else is doing very well as well.
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation0: Apologies for bad line. Thank you for that. Can I ask a follow-up? Can you achieve the margin expansion even if you were not able to double the revenue in the midterm? Are there other levers you could still pull to achieve the margin expansion?
Jason Garland, Chief Financial Officer, Repligen Corporation: Yeah. Certainly, volume will be a big part of our of our growth, but there are additional levers when you look at the things that we’re driving. We have our our Repligen, performance system, RPS, that that’s constantly driving productivity in the factories. We’ll continue to optimize our footprint over the coming years. Again, we talked about earlier there’s the ability to capture low single digit price.
I think we’re also building out a lot of muscles in our sourcing as well to help offset inflation or even drive that to a net benefit. So certainly, the leverage will be a part of that story, but not the only piece. And we’ll be focused on executing all of those and as well as kind of balancing that with growth, right, which is why we keep talking about the fit for growth sort of view of this. You have be able to position yourself to meet that expansion as well. So we certainly build that into our thinking, Sumit.
Jacob Johnson, Vice President of Investor Relations, Repligen Corporation0: Cool. Thank you so much,
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: guys. Thank you.
Greg, Call Coordinator/Operator: And that does conclude sorry, I was just going say that concludes our Q and A session. So I will now turn the call back over to Olivier Lejot for closing remarks. Olivier?
Olivier Lugio, President and Chief Executive Officer, Repligen Corporation: Yes. Thank you. I just wanted to thank everybody for joining us today. I mean, you heard we are really excited about the momentum we have in our business. We’d like just to thank all of our Repiegent colleagues for helping us delivering these very strong results.
And as you heard, we remain focused on our strategic plan for 2025, and we are looking forward to speaking with everyone again very soon. Thank you very much.
Greg, Call Coordinator/Operator: Thank you. And ladies and gentlemen, again, concludes today’s call. Thank you for all for joining, and you may now disconnect.
Jason Garland, Chief Financial Officer, Repligen Corporation: Thank you.
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