Qiagen at Goldman Sachs Conference: Strategic Growth and Innovation

On Monday, 09 June 2025, Qiagen NV (NYSE:QGEN) presented at the Goldman Sachs 46th Annual Global Healthcare Conference, where company executives outlined their strategic vision amid economic challenges. The company highlighted its robust recurring revenue from consumables and its balanced presence in clinical and academic markets. While optimistic about growth, Qiagen also acknowledged current market hurdles.

Key Takeaways

• Qiagen aims for a 7% CAGR for QuantiFERON from 2024 to 2028.
• The company plans to achieve a 31% adjusted operating income margin by 2028.
• Qiagen is expanding into new market segments with products like QIAsymphony Connect and QIA Sprint.
• Strategic initiatives in China include a dual-brand strategy.
• A small dividend payout is planned to attract new investors.

Financial Results

• Qiagen reported a 7% revenue growth in Q1, with Q2 guidance indicating a 5% growth rate.
• The revenue is evenly split between clinical and academic sectors, both growing at 4-5%.
• QIAstat-Dx saw a 37% growth in Q1, with plans to double this business by 2028.
• Despite a 1% decline in instrument sales year-over-year, Qiagen remains focused on product innovation.

Operational Updates

• Qiagen plans to launch three new instruments by 2026, including QIAsymphony Connect and QIA Sprint.
• In China, which represents 4-5% of total revenue, Qiagen employs a dual-brand strategy.
• The company is targeting the conversion of TB skin tests to QuantiFERON, which still dominates 60% of the market.

Future Outlook

• Qiagen expects a conservative 2025 outlook, with improvements anticipated in China.
• The company plans to update midterm guidance alongside next year’s projections.
• Operational leverage and gross margin improvements are expected to enhance EBIT margins.

Q&A Highlights

• Positive customer feedback on QIAsymphony Connect suggests strong market acceptance.
• Capital allocation priorities include a 9-10% revenue investment in R&D and share buybacks.
• Multiyear contracts with QuantiFERON customers have been renewed, reflecting market confidence.

In conclusion, Qiagen’s presentation at the conference highlighted its strategic focus on innovation and market expansion. For a detailed review, refer to the full transcript below.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference:

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Hi, good morning, everyone. I’m Matt Sykes, Life Science Tools and Diagnostics Analyst at Goldman Sachs. I have the pleasure of being joined by Roland Saker, CFO and John Gallardi, Head of IR. Roland, John, thanks for being here.

John Gallardi, Head of IR, QIAGEN: Thank you.

Roland Saker, CFO, QIAGEN: Thank you.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Maybe we could start out, just given the current environment we’re in, which is continues to be challenging, maybe just talk through sort of the durability of your end markets and recurring revenue? And how does this help you manage the uncertainty we’ve seen in the tool space so far this year? And how does it differentiate you maybe potentially from your competitors?

Roland Saker, CFO, QIAGEN: Yes. Do think you just quite know already the environment quite well. Clearly, what is helping QIAGEN quite a lot is that we have 85% of our revenues coming from our consumable portfolio, and consumables, in general, are very resilient to QIAGEN. I think we have seen a very good start into the year. You have seen an overall 7% growth rate.

We also guided for 5% growth rate in the second quarter. So I would say, overall, that has been quite stable for us. Think losing results, it’s important to go one step back because, first of all, I think it’s important to remind everybody that 50% of our revenue is coming from the clinical side and 50% of our revenue is coming from the academic side in general. And within that 50%, we have grown about four to 5% being related to U. S.

NIH budget.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. And maybe just talking about, at a high level, your 2025 guide. In terms of the largest headwinds in Tools space here, you’ve got tariffs, academic funding, willingness to spend on R and D from biopharma and current macro and policy uncertainty, how are you baking that into your 2025 guide? Where are the guardrails in that? I mean I would think

John Gallardi, Head of IR, QIAGEN: that you

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: my view is it’s fairly conservative, but there’s a lot of different factors to put into this guide. How do you think about it?

Roland Saker, CFO, QIAGEN: Yes. I do think when we move into the year, and as you know, we have given guidance, I think, of January, early February, we cleared to a quite, call it, conservative, realistic view. And so far, it’s also the reason why we were able to beat our guidance in the first quarter. We were always, we still are quite careful in terms if it comes to instrumentation revenues. Instrumentation is somewhere between 10%, fifteen % of our total revenues.

I think it was quite obvious that this year, it is probably a more muted environment there. And I don’t think that our view has changed for us in any way dramatically. Nevertheless, it’s also important to understand that our instrumentation business is somewhat different than for many other companies. A typical QIAGEN instrument is somewhere between 20,000 and $40,000 Typically, it has a payback period somewhere between twelve and eighteen months. So you can make the case, particularly also if you believe the headcount environment might get a bit more difficult and you want to keep the volume up.

I do think in terms of the consumer environment, it is important to understand that all our consumables are literally an integrated part of the daily work routine. So as long as people come into the lab, they have to use it. And that has protected us quite well. We haven’t seen any larger changes in general trends. There’s clearly more volatility in now, but nevertheless, on an overall quite stable environment.

Other than that, there’s even certain areas, like, for example, China, which is 4% to 5% of our business, where we clearly had a more difficult start into the year, where we see now the first stimulus money literally reaching the street. I’m not going to tell you that China now returns to growth rate, but the significant double digit reduction probably looks like that, that is more muted over the next couple of quarters.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Just on China, and I know it’s a small part of your business, which has helped you on a relative basis, but how do you view this region longer term? Have your expectations for growth in the region come down? If so, like where in your portfolio you’re able to offset that potential step down? And then in terms of commitment long term to China, it’s not going away. It’s obviously going through some challenges.

But how do you feel about that region for QIAGEN in the long term?

Roland Saker, CFO, QIAGEN: So just to frame it again, 4% or 5% of total for us. But I do think it’s second also to important to understand that China is special for QIAGEN. What I mean by that is it’s the only country where we have a dual brand strategy. So on the one hand side, we have some very global QIAGEN brand, but we have owned about 40% of our business with our second brand. It’s actually our largest copycat, which we acquired in 02/2005.

We kept them separate local management, local R and D, local production. And here, we clearly see that China has multiple layers of topics, if you like. One is this very general GDP issue and where all companies have to deal with. But you clearly also can see that a Chinese company and our second brand is clearly seen as a Chinese company there’s a certain advantage in a local setting. And therefore, it is an opportunity for us to, again, to make up some of the revenue shortfalls we see in the global brand.

Nevertheless, we are very much committed to China. We do think that China, right now the number two in health care globally, over time will become the most important market just by the population side. It’s quite obvious also as a European company, we are probably in a slightly different setting than some of our U. S. Peers.

So we would like to stay in China, and therefore, we’re looking into different options how we even can drive that going forward.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Okay. Now shifting more towards the business. Sample Tech represents about onethree of revenue. What do you think will spark growth in this segment? And how should we think about normalized growth in the medium term for Sample Tech?

John Gallardi, Head of IR, QIAGEN: Well, Sample Tech involves our business. That’s the core the bread and butter of QIAGEN. This is where you’re using our kits and instruments to be able to get DNA, RNA out of any biological sample. And what’s important for this business to get back to this growth rate of 3% to 4%. What we had given us a midterm guide is we’re going to be launching three new instruments starting at the end of twenty twenty five and into 2026.

So we’re going to go through a product upgrade cycle from our flagship system, the QIAsymphony will become the QIAsymphony Connect. We have over 3,300 QIAsymphony placements out there over the last decade. That’s going to be right for replacement and also for expansion, especially when you hear terms like liquid biopsy and MRD. And also what we’re doing in sample prep is we’re moving into two new market segments. We’re moving into what we call the ultra high throughput market.

This will be with the QIA Sprint. This is where we’re going to be competing, where you’re running like 200 samples at a time and doing very fast rapid turnaround to get the samples processed. Again, this is an area where we haven’t competed before, so that’s going be very interesting for us. And then on the, what I would call, the ultra low throughput, this would be with a machine that we call the QIA Mini, which will cost a few thousand dollars, under $5,000 So you’re targeting academic labs, places that were doing a couple of samples in terms of processing, and this can now be automated and free somebody up to do that. So it’s a product refresh cycle, and it’s a market expansion that we see being able to help drive that.

And we’ve seen that before with our instrument launches, that when we get into an instrument launch phase, that, that helps to rejuvenate the top line. But right now, the last two years, the instrument environment has been tough.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Yes. And with the upcoming launch of QIAsymphony Connect that you mentioned, have you received any early access customer feedback? If so, kind of how has that been? And then have you seen any delay in customers willing to buy a system now as they wait for potentially the upgrade? And should we expect maybe some level of, I don’t know, pent up demand or acceleration post launch?

Like how are you thinking about the cadence of that as that instrument gets launched and any feedback you’ve already received?

Roland Saker, CFO, QIAGEN: Yes. Starting with the latter one. No, we clearly have systems out with some larger customers testing it, giving us feedback. I would say feedback is so good that some customers even don’t want to get the testing machines back to us, which I think is always a good sign. Again, the machine clearly has advantages in terms of workflow integration, in terms of pull through.

So I do think there’s also a nice step up opportunities for customers by utilizing these machines. What we see also in our industry is probably something what you also know quite well from the kind of the second the company launches or announces a new machine. There’s clearly a certain softness in the existing offering because everybody can wait for another six plus months for a new machine is hitting the street. So that’s clearly something what we have to factor in what we have factored into our guidance this year as well.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: And then on the QIASPRINT, the ultra high throughput, you haven’t been in that market before. Is there some level of commercial build out you have to do? Or can you use existing commercial resources to support that? And is there anything unique about that market, given it’s relatively new to you that you’ll have to kind of get some learnings on before you as you launch that?

Roland Saker, CFO, QIAGEN: The only reason why we are not in a market at all is that we always believe if you move into this high throughput market, you want to have literally a machine which offers a generational shift. As you know, QIAGEN is not developing its own machines. We do all the software development. We do the adoption on the consumables of that machine. We needed the right partner for that.

And I think we identified now three years ago the right partner. We’re now in the final stage and finalizing these instruments. But we do believe we have all the ingredients needed to have also an important step and making an important step into the market because quite sure, Kaizen is well known for his sample prep portfolio in general. The customer setting there is no different. It’s just probably a slightly different kind of a lab with a higher throughput.

So we believe quite nicely in that market opportunity, and it makes a larger difference to QIAGEN and also our sample prep numbers going forward.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. And then how do you view QIAGEN’s position in high growth areas like liquid biopsies, specifically MRD? How does your sample prep automation help you compete in these applications? And where does automation fall in the rank of importance for customers in this space?

John Gallardi, Head of IR, QIAGEN: So liquid biopsy is where you’re using a blood sample to be able to fish out the cancer cells to be able to do the analysis. The first application of liquid biopsy was actually prenatal testing, and now we saw the expansion now into cancer. We’ll see the expansion in the other diseases as well. MRD is where you’re looking for minimal residual disease. Okay, the patient has been treated for cancer.

How much is how many of the cancer cells are still in the patient floating around? And QIAGEN makes the key kits that are used for liquid biopsy. We actually started this in the 1990s with a professor in Hong Kong to be able to start this technology, and it shows you that these technologies start out in academia and move into the clinic. And so if you think about the Nateras, the Guardants, all these big labs that are doing liquid biopsy, they’re relying on us on the front end to be able to do that work. And that’s where the QIAsymphony plays into that workflow to be able to help them get the high quality DNA they need to be able to go downstream with their applications.

So the more you hear about it, the better it is for our business.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. And where does sort of automation fall in the rank

John Gallardi, Head of IR, QIAGEN: of Automation is very important. Right next to the quality of the kits that they’re getting. So what we give them is on the front end, we give them PaxGene, which is our joint venture with BD in terms of the blood collection tubes. And then moving into the sample prep kits to be able to get high quality material, They’re looking for three things: circulating tumor cells, recirculating DNA, and then they’re looking for what are called exosomes. These are important to be able to analyze because these are kind of like spaceships that are shed by the primary tumor and go into the body and start the metastases.

And so we’re able to we have the gold standard for this. But automation is absolutely critical when you think about the violent explosion of volumes that are going through these labs.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. Shifting over to QuantiFERON, which has been a great story for you guys, and you have a $600,000,000 target by 2028. If sort of if you assume the market share kind of reaches that, how are you able to offset any potential pressure from new entrants in the space given that you’ve been in that market for some time?

Roland Saker, CFO, QIAGEN: First of all, I think just to remind you, our midterm target CAGR was 7% from 24% to ’28 And right now, we are really tracking nicely ahead of that. So I think that speaks for itself. Second, I do think what is most important to understand, it is a market where 60% of the overall market volume is literally a 120 year old skin test. That 60% market is still growing 4% just by population growth, by more mandatory testing globally and so on. So even for us growing, let’s say, 7% to 10% over time, we barely eat into the being able to penetrate that market in general.

It is always a market it was always a market which is competitive. We had Revedy, Oxforth now part of Revedy in the market since 2012 when we came in the market. We had to be a major in the market, out of market, back into the market, not really making a difference. There’s always more than a handful of Asian companies in the market, not making a difference. We are gaining market share literally as we speak day by day.

I don’t think that is going to change going forward. There’s clearly rumors about one extra company moving into the market. But as we heard by on the Capital Market Day, it is more or less in the environment, as we assumed before, that they might come into the European market by 26%. We haven’t heard anything about The U. S.

Market entry in general. So we feel quite comfortable. What is most important for us again is that we were able, with the majority of our customers over the last twelve, eighteen months, to renew multiyear contracts. Again, I think that also speaks for the quality of the offering we’re delivering to our customers.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: And how do you really drive that conversion of physicians away from skin towards your test? I mean it’s a better test. It’s probably almost easier to do at scale. How do you like what is the commercial strategy to continue to unlock that 60%? Because it’s seemingly a huge opportunity.

At the same time, you pointed out it’s still growing 4%. Obviously, that’s the population, but still it’s something that would seem almost obvious from the outside observer. But doctor protocols, as you know, from looking at this industry for a while, just take a long time to shift. How do you affect that change?

John Gallardi, Head of IR, QIAGEN: Yes. So what we’re doing with QuantiFERON is we’re testing for the latent form of tuberculosis. There’s two forms. There’s the active form of this bacterial infection in your lungs, and it causes there’s around eleven thousand, twelve thousand cases a year in The United States. What you’re looking for are the people who have latent TB.

This affects one in four people worldwide who have the infection in their lungs, but the immune system has it kind of in a headlock, and it’s not able to go active. But of those one in four people, about ten percent will develop active disease. And as part of the efforts around the world to eradicate tuberculosis, you have to test people for latent TB to find these people, treat them with antibiotics or put them under observations to stop this replenishment cycle because people forget with the pandemic over, it’s back that TB is the leading cause of infectious disease death in the world. More people will die of TB than malaria and HIV. Every twenty nine twenty five to thirty seconds, somebody dies of TB around the world.

And we’re talking about a market opportunity of more than 75,000,000 latent TB tests in developed countries, The United States, Europe, Australia, Japan, these types of markets, Middle East. This is a developed world test. And if you think about migration trends, legal immigration, congregated living, health care workers, are very specific types of people that have to be tested for TB. But to your point about what’s driving conversion, it’s just still, after having this test since 2012, it’s awareness. It’s you still run into people who are not aware of it.

Also, the price of the skin test has gone up in recent years. So the cost resistance has gotten a lot less. The third part is, is that we offer a much better automation solution with our partner, DiaSorin. It makes it easier for labs to process this. And then the fourth driver right now is more about better targeting of the clinical patients who have to have this test.

These would be people who are going on to biological therapies. And if you listen to the commercials on a Sunday here in America, the DTC ads, usually a lot of them talk about the need for TB testing. So we’re getting a lot more sophisticated at finding high level prescribers of anti rheumatoid arthritis medicines. All these drugs for Crohn’s disease, cancer drugs, all these types of products often need a TB test in advance. So we’ve gotten much better at targeting those prescribers to order the QuantiFERON test to drive conversion.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. I want to move to QIAstat Dx, which has been a really good story for you guys. And you’ve had a nice cadence of approvals recently, including the GI panel, which was recently approved. How could specifically on the GI panel, and then you can talk about QIAstat in general as well, How could this impact the back half of the year? And what do you expect initial demand cadence to look like for that?

Roland Saker, CFO, QIAGEN: I think what you’re referring to is the GI approval for The U. S. We always had it on global base, plus in The U. S, which was one of the four FDA approvals we got literally end of last year. It’s a good timing.

And what is important to note that GI is typically the number two assay of this kind of environment, but probably more important that respiratory and GI and sometimes also meningitis, you have to offer in the tender process. And therefore, it’s important that we have all available to offer. And that was clearly something that we were lacking in The U. S. Now we can clearly play a critical role here in The U.

S. As well, participating in the standards. We’re seeing that we are clearly also gaining traction here. We have a significant number of instruments already placed and sold here in The U. S.

Over the last couple of years. So is an opportunity for us to roll that in. It will not go overnight, but it’s clearly a continuous improvement in terms of revenue stream in U. S. I think globally, it’s important to say that, again, was clearly a 37% growth rate in Q1.

We are good enough if it stays high double digit, not sure it will be always 37%. But I think what we said in the past is critical. We always said we want to grow that business more or less double that business until 2028. As long as we have 150 placements each quarter, we are totally fine. It’s fair to say right now we are clearly nicely above this placement ratio, and I don’t think that is changing anytime soon.

Now even having a larger menu, more to come over time is clearly an incremental benefit. And not only on the revenue growth, but clearly also on the profitability growth because the one thing that we were lacking, I would say, in the last probably two, three years was the utilization in terms of production environment for our QIAstat cartridges. Now with this quite significant growth also in revenues and therefore, in volume, that gives Nexa a push on the profitability.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. Just shifting over to companion diagnostics, which is something you guys have had a long history with. How do you view the competitive landscape in that space? And how is QIAGEN able to differentiate themselves in companion diagnostics?

John Gallardi, Head of IR, QIAGEN: So companion diagnostics have been around for probably since around 2009 or ’ten. And these are diagnostic tests that you’re going to run on a patient. And obviously, it was really in oncology to be able to understand what’s the molecular fingerprint of the patient’s cancer mutations. And based on that information, what drugs would be good or what drugs would be bad. And you think back to Aressa, Erbitux, these were the first ones that where you used a test to be able to stratify patients, either you’re eligible or not eligible for drug.

QIAGEN is active in this area since then, bringing back these, helping to get these drugs. It’s been now fifteen years that we’ve been active in this space. And we’re at the point now where we’re starting to see more and more adoption of companion diagnostics in that it’s really become the exception rather than the old rule that, to

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: put it

John Gallardi, Head of IR, QIAGEN: the other way, you need a companion diagnostics to get FDA approval for cancer therapy these days. And also, the pharma companies want these because they get better efficacy rates and they have better side effect profiles so they can get better reimbursement. And where we are now is that we’re at the point where we’re starting to offer these types of companion diagnostics outside of oncology. In oncology, we have 30 partnerships with the big pharma companies. We have 16 FDA approved kits in this area.

And now we’re moving into Alzheimer’s with Lilly to be able to do an APOE test, to be able to stratify patients in terms of whether they’re eligible for the Lilly drug or not. That will come hopefully in the next two years. And then we’re also working with AstraZeneca on chronic diseases, and we can’t get more into details on that. But what our approach is, is to be technology neutral to the customer. We’ll offer you qPCR, where you look at one gene at a time, yes or no, like KRAS or EGFR test.

Then we’re moving into QIAstat Dx, where we can do a constellation of tests of markers together on the same panel. We do the respiratory and the GI panel test. We’re offering them there. That’s what we’re using for Eli Lilly. And then we’re also able to offer digital PCR as an option to people.

That’s where we’re working with KaiAcuity. And then we work with Illumina, which is our next gen sequencing partner. And then you’ll start to see some news flow coming in that area where we’re going to start to have new partnerships coming where we can offer all these different modalities to customers.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. Shifting to QIAcuity, you mentioned your digital PCR offering. You upgraded your multiplexing capabilities recently. How has this helped drive utilization on the platform? And any updates on win rates since that upgrade?

Or is this more of a slow moving kind of event that we’ll see over time?

John Gallardi, Head of IR, QIAGEN: It’s going be a grind to see what customers want. What you’re doing with digital PCR, it fits into this gap between, again, qPCR, where you’re looking essentially at one or two genes at a time on a test and next gen sequencing where you need you’re going to look at 50,000, five hundred, two thousand or all 24,000 genes in the human genome. But so digital PCR fits in the middle. What digital PCR does is it offers far better precision with speed than qPCR. And against NGS, it’s much more cost efficient when you’re looking at a handful of markers, and you get the results in hours instead of having to wait days or weeks for a next gen sequencing run.

So at the beginning with KYAQITY, we said you could look at five markers. Think of five different genetic markers at a time that you want to analyze. Now we’re up to 12, and then we’re going to expand that capability more and more with time that we can start to offer more opportunities to look at more. Not every customer needs to look at 12. So we’re going to it’s going to take time to see how much applications, how much sales can we generate from the high throughput version of that kit to be able to look at 12 versus looking at five.

But it will take time. Right now, the push is more how do you move this. The start was in academia. Now we’re getting a lot of traction in pharma, especially around biological drug development, QAQC, manufacturing, drug development. Now we’re moving into the clinical area, and that’s where we see the next big opportunity, and we’ll

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: see how that we focus more that way. And there’s obviously a large incumbent in the digital PCR space. But given the growth rate we’ve seen in CAI Acuity, there has to be some assumption. There’s been some share gains as well as the market probably expanding as you talk about moving into different areas. Maybe talk about the evolution of QIAcuity in terms of market share and where do you feel like you’re best positioned and where do you feel like your right to win is in the future?

Roland Saker, CFO, QIAGEN: Think what we see right now is clearly the area of biopharma is probably a significant opportunity for us. It has to do that we have, first of all, three it’s inevitably three different sizes of instruments. So depending on which kind of volume you want to run, you can more or less pick exactly the size you want, which is a nice opportunity for our customers. Second is we expanded our menu quite dramatically. We added 100 panels this last year.

We’re adding 100 assets this year as well. So I would say in terms of offering, we also have here a quite significant reach into the market. And last but not least, I think it’s also quite clear that the conversion, only in the biopharma side, but also John just said, on the sequencing side is ongoing because while sequencing is an outstanding opportunity and technical solution, if you’re looking for the unknown information at the biopharma side, I do think it is important to understand that they typically know exactly these are the six, eight markers why they should change or shouldn’t change. So if you can do that more or less on one day instead of weeks with a digital PCR solution with a couple of hundred dollars compared to $1,000 you clearly can also see that even if you assume that the pharma environment gets more challenging in terms of environment, that there’s opportunities to increase fees but also save costs.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. Maybe just going back to a little bit more high level, and I think Calle Acuity kind of is a good segue into this. But just talk through sort of the willingness of your customers to spend on CapEx this year and if you’ve seen any kind of significant impacts from the broader macro environment from instruments versus consumables? Now you’re in a fortunate position. A large portion of your revenues are recurring in consumables, but there still is some instrument exposure.

What where do you see sort of still do you still see those CapEx constraints in place? Do you see it alleviating soon? And what kind of impact? And what have you done to kind of try to

Roland Saker, CFO, QIAGEN: spur risk like I see there’s even a second reason why we are in a good situation because there’s two more reasons. One is that half of our revenue is clinical, half of only Life Science. And the second is probably that most of our instruments have a very different price point than instruments typically in our environment. Of course, with a price point between 20 and €40,000 you clearly reach breakeven much faster than if you have to invest, whatever, $05,000,000 or even more in some cases. Again, Q1 was okay.

Again, minus 1% growth rate for instruments, I would say, not as good for us. But compared to the overall environment, quite sure most companies would die for that. Nevertheless, we believe that the environment stays quite difficult for probably quite some time. We need better visibility on particularly The U. S.

Funding situation. I’m not sure how at least in our guidance, we haven’t reflected any larger improvements here. While we believe that, hopefully, with end of this year, going closer to the new budget season, that you have some clarity, we’re not so sure at least when it comes to our guidance, just giving us some flexibility. I do think where we nevertheless see some momentum is, particularly in Europe, there’s clearly some extra funds coming down the area as well. China, we talked about already.

So I would think overall, it’s okay. John was alluding to the large events in instrumentation, which are more or less 26 events for us, which is a new instrument in sample prep. That is quite big for us because these are all machines where we believe they make a significant difference, not only for QIAGEN but actually for our customers going forward on the low throughput side and the mid throughput side, but also on the high throughput side, it’s a big year for QIAGEN.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Before we move on to some of the financial questions I have, I do want to address QDI QIAGEN Digital Insights. I think it’s a business now that has gained some level of critical mass. It’s growing very fast. The margins are attractive. You guys have started to talk more and more about this business.

Maybe just kind of talk a little bit about your strategy with that business. And what competitive advantage do you have within the bioinformatics space? And how easy is it to get customers of your other products to utilize this type of software analytics? So QDI is QIAGEN Digital Insights,

John Gallardi, Head of IR, QIAGEN: and this is our bioinformatics business. We started building this probably around 2012, ’20 ’13. What you’re doing is you’re using industrial, scalable, professional software to be able to analyze and interpret the data that comes out of any next gen sequencer. The data that comes out of these sequencers is just to glorify text files and collections of Cs, Ts, As and Gs. And then you have to be able to use very sophisticated software to be able to first align all the DNA up and then mark through what’s right and what’s wrong.

Wrong is what they call a variant. They get upset if I call it wrong. It’s just a variant. And this is just like one of those tests that you did as a kid with a number two pencil, and it’s and it’s marking what’s wrong. But that doesn’t tell you anything.

Then you need to use different software products for the interpretation. That’s going to tell you what’s a variant or what’s wrong and why is that important or is that just noise. And this is where QIAGEN has built $100,000,000 business, like you said. So it’s getting critical mass, just like QIAcuity and QIAstat Dx have also both broke through the $100,000,000 threshold of sales. And that’s where we’re trying to create products for drug discovery and for research work and then also for clinical applications.

What we’re trying to do here is move this into much more of a SaaS model from license agreements. That’s like Roland was saying, this is a bit of the drag that we’re seeing on the sales performance right now. This is a transition that’s going to probably take another twelve to eighteen months. But if you think about labs that want to be able to do next gen sequencing panel analysis work for their customers, We’re providing them the tools, the picks and shovels to be able to do that. So where we can cross sell to these customers, to these labs, if you think about the NeoGenomics, the Quest, the LabCorp, the big medical centers, these types of places that are offering these things, we can offer them sample prep.

We can offer them the automation to do that. We can offer them then digital PCR to help do the QC work on their next gen sequencing runs. And then we can try to pick them up with the panels that they need to be able to pull out and extract the genes because these guys are thinking about 5,500, seven hundred genes that they want to extract out of the sample to be able to sequence. And then we’ll give them the informatics to make sense. All of our kits that we’re creating and our software are agnostic to any sequencer platform.

So we don’t care what sequencer you’re using. We’ll be able to pick you up on the front end, and we’ll pick you up on

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: the back end. Got it. Roland, you laid out a target of achieving 31% adjusted operating income margin by 2028. It’s been worst kept secret that I think that we can probably you could probably do better than that. But wisely, you’ve sort of gated some of those expectations.

How should we think about areas of potential upside to that target as we move closer to 2028?

Roland Saker, CFO, QIAGEN: Well, I think it’s important to realize, of course, we made, of course, significant progress, right? We improved the EBIT margin by three thirty bps over the last two years. So I think it was already quite meaningful. But I do think you’re right. There’s clearly more opportunities for us going forward.

And yes, we also said on the last call that at some point, I would say, now and probably latest, call it, when we give next year guidance, we are going to update our midterm guidance as well because it’s quite obvious that there is opportunity for us to do better. I think if you look into the details, I would argue that probably for this year and next year, the larger part comes from operational leverage. There’s opportunity for us to gain here some more visibility. R and D, probably, we feel quite comfortable with 9% to 10% of revenues going into R and D and funding our pipeline. There’s opportunities around digitalization and other efforts on the SG and A side.

Over time, we will see an incremental driver helping us to expand our EBIT margin, which is gross margin. I talked before that we have certain areas where we are underutilized. I think it’s also quite obvious to see that instrumentation are part of our strategy. But clearly, a better utilization of the instruments at the customer side clearly is also helping us to sell higher consumables per machine, which again helps us to drive overall margin for QIAGEN. I think there’s a number out, which I always find quite interesting.

If you take all the out the instruments which we launched over the last few years plus the related consumables running on these machines, the gross margin for the rest of the business is north of 70%. So you can see how important, at the end of the day, a healthy consumable business is for QIAGEN, and there’s some way for us to go into that as well.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Got it. In the few seconds that we have left, I do want to touch on capital allocation. M and A being a component that you’ve talked about in the past, but also now with the buybacks you’ve been doing rather consistently dividend. How are you thinking about your priorities here? And specifically on M and A, what areas of the portfolio do you feel like you need to fill in?

Roland Saker, CFO, QIAGEN: I think our overall capital allocation policy hasn’t really changed. We always said it has on part, is investing into our business. As I said, 9% to 10% of revenues go into R and D. Second is we always said that we are looking on any kind of value enhancing deals. We just closed a smaller acquisition on the bioinformatics side, as we said before.

There’s clearly opportunities out there as well. And last but not least, we started in 2012 with $100,000,000 share buybacks per year. Just in the last two years, we stepped it up to $300,000,000 per year. And next week, we are going to ask our shareholders for a $500,000,000 synthetic share buyback approval. So I would say the combination of all three is still what we want to drive going forward as well.

John Gallardi, Head of IR, QIAGEN: Great. Go ahead, John. Don’t forget the dividend.

Roland Saker, CFO, QIAGEN: Yes. And last but not least, we start we’re going to start with a small dividend payout this year because we all know once you start a dividend, my successor still has to pay dividend and grow it every year. For us, it was important to show the confidence in our cash flow ability plus also being attractive to a new set of shareholders.

Matt Sykes, Life Science Tools and Diagnostics Analyst, Goldman Sachs: Perfect. Roland, John, thank you very much.

Roland Saker, CFO, QIAGEN: Appreciate it. Thank you.

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