QIAGEN N.V. 2026 Q2 Earnings Call

Welcome to our call for the second quarter of 2026. We appreciate your time and interest in Qiagen. Joining the call today are Thierry Bernard, our Chief Executive Officer, and Roland Sackers, our Chief Financial Officer. Also joining us is Dr. Domenica Martorana from our investor relations team. As always, today's call is being webcast live and will be archived in the investor relations section of our website at www.qiagen.com, where you can find the press release and presentation accompanying this call. Please also note that this call will include forward-looking statements. Actual results may differ materially from those projected due to a number of factors outlined in our most recent Form 20-F and other filings with the U.S. Securities and Exchange Commission. We will also refer to certain financial measures not prepared in accordance with U.S. generally accepted accounting principles or GAAP, that provide additional insights into our performance.

Reconciliations to the most directly comparable GAAP figures are in the release and presentation. All references to earnings per share refer to adjusted diluted EPS. With that, let me hand over the call to you, Thierry.

Thank you, Daniela. Hello. Good morning, good afternoon, or good evening, depending on where you are in the world. Thank you for joining us. Let me start by thanking again our teams across Qiagen for their continued dedication and disciplined execution. Their focus enabled us to deliver results above our outlook while continuing to invest in our portfolio and focus on profitable growth. Let me now walk you through our key messages for today. First, we exceeded our outlook for both sales and adjusted EPS. Net sales were $535 million and unchanged on both a reported basis and at CER. This was ahead of our outlook for an approximately 2% decline CER. Adjusted diluted EPS was $0.62 on both a reported basis and at CER, again, above our outlook of at least $0.60 at CER.

Those results demonstrate the resilience of our business and provide further confidence in our outlook for the year. Second key message, our growth pillars delivered 5% growth at CER, probably above market growth. Sample Technologies led the quarter, reflecting continued demand for our sample preparation solutions. QIAcuity delivered another solid quarter driven by healthy consumables demand. QDI, our bioinformatic business, also performed well, led by our clinical application. QuantiFERON returned to growth as solid demand across many testing groups more than offset the significant decline in U.S. immigration testing demand. This U.S. immigration testing demand decrease is what we highlighted at the end of our Q1 2026. QIAstat-Dx was impacted by a challenging prior year comparison in respiratory testing, partially offset by continued strong growth in our gastrointestinal and meningitis encephalitis panels, with the gastrointestinal panel performing particularly well.

Third key message, we maintain a very high level of profitability. This reflects our ability to improve efficiency while continuing to invest for future growth. Fourth, we continue to generate strong cash flow, providing the financial flexibility to invest in the business while returning capital to shareholders. This financial strength enabled us to increase our annual dividend by 40% in 2026. This brings me to my final key message for today, our outlook for 2026. We are reaffirming our full-year outlook and remain confident in stronger growth during the second half of the year. The continued performance of our growth pillars and the progress we are making across our portfolio reinforce our confidence in delivering the outlook we have set for the year. With that, I'll turn over to Roland for more details on the financials.

Thank you, Thierry, and hello, everyone. As Thierry highlighted, we delivered a better than expected second quarter, exceeding our outlook for both sales and adjusted diluted EPS while maintaining a high level of profitability. Let me start with our sales performance across the four product groups. Sample Technologies was 9% CER, driven by automated consumables and higher instrument sales compared to the year ago period. Diagnostic Solutions declined 2% at CER. QuantiFERON returned to growth at 1% CER as solid demand across most testing groups more than offset reduced immigration testing demand, primarily in the U.S. and Middle East. QIAstat-Dx sales declined 7% at constant exchange rates despite growth in GI and meningitis panels. However, this was more than offset by lower respiratory panel sales against a challenging prior year comparison. In PCR and nucleic acid amplification, sales declined 8% at CER.

Our digital PCR system, QIAcuity, delivered double-digit growth at CER, driven by strong consumables demand. This is more than offset by weaker OEM demand.

You may continue. Okay. Thank you.

Sorry for that. It looked like we had some technical difficulties, but I do think we are now back in the call, so let me continue. In PCR and nucleic acid amplification, sales declined 8% at CER. Our digital PCR system, QIAcuity, delivered double-digit growth at CER driven by strong consumables demand. This is more than offset by weaker OEM demand. In the Genomics and NGS product group, sales rose 2% CER. QIAGEN Digital Insights delivered solid single-digit growth, while consumables for universal NGS panels used on third-party sequencers grew more than 20% CER. Lower sales of other genomics products moderated the overall growth rate. Regional performance was mixed during the quarter. Sales in the Americas rose 1% CER, led by 2% growth in North America while sales declined in Brazil and Mexico. In the EMEA region, sales declined 2% CER.

While Spain, Belgium, and Poland were up in the quarter, Germany, France, and Italy were down. In the Asia Pacific region, sales declined 2% CER. Excluding China, the region grew at a low single-digit rate at constant exchange rates, supported by high teens growth in Japan while China was down in the low teens. Sequentially, sales in China improved at a double-digit percentage rate. Moving down the income statement, profitability remained at a high level. Adjusted operating income declined 2% and reached $157 million. The adjusted operating income margin was 29.4%, compared with 29.9% in the second quarter of 2025. Disciplined cost management and efficiency gains helped offset cost margin headwinds. The adjusted cost margin was 66.2% in the quarter, compared to 66.7% in the prior year period due to changes in product mix. Operating expenses remained broadly stable as a percentage of sales.

Sequentially, the adjusted operating income margin increased by 200 basis points from 27.4% in the first quarter of 2026, with higher operating leverage contributing to the improvement. Adjusted diluted EPS was $0.62 at constant exchange rates, exceeding the outlook of at least $0.60 at CER. The adjusted tax rate was 18% in the quarter, in line with our target of 17%-18%. The high level of profitability also translated into solid cash generation. Operating cash flow was $301 million for the first six months of 2026, unchanged from the same period of 2025. This was achieved despite approximately $20 million of cash payments for efficiency and restructuring programs and a planned increase in inventory. Cash generation was supported by disciplined working capital management and a high level of profitability. Improved receivables collection and other working capital movements helped offset the inventory build.

Days Sales Outstanding improved to approximately 55 days from approximately 57 days at the end of 2025. Days Inventory Outstanding increased to 153 days from 149 days at the end of 2025, reflecting inventory build in preparation for new product launches. Our high level of profitability and cash generation continues to support a strong balance sheet. This gives us the flexibility to invest in innovation, pursue targeted acquisitions, and return capital to shareholders. In line with this approach, we completed a $500 million synthetic share repurchase in January and paid our second annual dividend of around $72 million in July. The dividend per share increased by 40% to $0.35 from $0.25 in 2025. With that, let me hand back the call to Thierry.