Bio-Rad Laboratories, Inc. Class B Wells Fargo 21st Annual Healthcare Conference

Very good. First of all, Evan, thanks for having us, and appreciate the opportunity to participate at the conference. It's been very good for us. In terms of second quarter, second quarter was, on a year-over-year basis, fairly similar to the second quarter of last year. On a sequential basis, as we expected, it improved from the Q1 results, and so that was good to see. In terms of the specific areas as you've called out in your question, there's a few different things that we saw. One is diagnostics generally was stable in the second quarter. That was helped by the Middle East specifically for us, which we anticipated happening. On a sequential basis, that came through. That helped us in the second quarter. As we thought about the Middle East, that safety stock refresh that we expected after the Q1 conflict rising is what transpired.

Beyond that, we saw digital PCR instrument strength on a year-over-year basis, 20% growth on a year-over-year basis. So that's something else that was a continuation, if you will. We saw growth in the fourth quarter as well as the first quarter of 2026, so it was a continuation there. Then we saw areas like APAC continue to be strong for us, which is kind of what we had anticipated. That's APAC ex-China, if I say. So those are some areas in terms of framing the quarter, in terms of some positive outcomes and how that helps support the top line in the second quarter. In terms of end markets, I think there's a few different aspects to this. A&G, Academic and Government, continue to be cautious. However, on a sequential basis, improved slightly, and especially the consumable pull-through that we saw.

That was good to see because that speaks to activity level within these institutions and research areas. That was great. I think A&G, though, is a story that really has to be written from each region. Obviously, there are specifics in terms of how the U.S. and National Institutes of Health impact that. You look at Europe, where there's budgets being moved from A&G into other areas like defense. Then you've got China, which has continued to be somewhat soft overall for us. That's something that we're continuing to monitor. But I would say that on an A&G standpoint, this is something we commented on previously, we saw some sequential improvement, just in terms of sentiment. We don't anticipate that to change broadly as we get through Q3, Q4.

However, we do expect that these positive signals that we are starting to see, we are wanting to see that on a more consistent basis to really define a trend for us, whereby we might call it recovered and bottoming out and moving to a higher level. From a biopharma standpoint, funding is flowing. I think depending upon where you play in biopharma, broadly, it impacts you differently depending upon your portfolio and your end market focus. But we are seeing some signals of improvement within the broader biopharma. Large pharma, which is primarily our process chromatography area, played out the way we anticipated coming into the year. That was good to see that it was consistent, at least from that perspective. Hopefully that helps frame the second quarter results.

I think we have got good visibility throughout the areas, considering the comments I just made from an end market standpoint, right? I think that those comments need to be overlaid in terms of the visibility. But those end market kind of movements are not to take away from having the visibility that we have within the markets, and so it is not about that. I think as we think about how, obviously with the second quarter print at $651 million, it is relatively consistent with where the third quarter is. Historically, that has been our cadence as we have gone through the year. I know earlier in the year, people had a question in terms of how that progression would move from the first quarter to the second quarter. They thought that that lift in the second quarter was maybe higher than what was achievable.

Obviously, with the print that we had in the second quarter, we dispelled that sort of thought. As we think about the third quarter to the fourth quarter, what we have seen historically is somewhere between a 5%-8% jump from the third quarter to the fourth quarter. This year, it is about a 5% growth from that third quarter to fourth quarter, so lower end of that historical range. In addition to that, when we look at where are the drivers of that, I think it is very specific areas like blood typing, that we expect to see specific orders coming through. Quality controls, that is based on batch releases that we anticipate seeing or executing to. The third element of that is really around the quality controls, which can be lumpy from period to period, depending upon what the timing is of those batch releases.

For this year, it's coming out in that third and fourth quarter, so you see that supporting that sequential change from second quarter to third quarter to the fourth quarter.

Yeah. I think from an mRNA and obviously the recent announcement by Merck & Co. and Moderna, I think that's a positive signal broadly for mRNA technology and its utilization. From our perspective, we don't have necessarily any direct impact from that sort of announcement. With that said, I think that speaks to the broader development within our process chromatography area. When we think about where we sit, that was a vaccine announcement. We have some level of exposure to vaccine as we talked about early in the year. But more of our exposure is on the therapeutic side, and in that area it's more monoclonal antibodies in terms of our exposure. I think if I step out of the details there, that sort of announcement speaks to the power of what's being brought forward from a research and diagnostic standpoint.

From improving long-term healthcare, which we see as a positive signal.

Tariffs, we did not apply any surcharges. That is something that we explicitly stated we would not do. There are not any surcharges to be contemplated or reimbursement of surcharges for us. The tariffs we have applied for refunds. As we think about that, obviously the appeals process is ongoing as it relates to tariffs, so let us see how that unfolds. With that said, presuming we get our refunds, it will be a one-time event in terms of offset to the expenses that we have incurred for the tariffs that have been incurred to date. But really it is a one-time event.