Bio-Rad Laboratories said Wednesday it is targeting mid-teens operating margins as an intermediate step, with a longer-term goal of 20% or more, during a presentation at the Wells Fargo 21st Annual Healthcare Conference.
The California-based life-sciences company reported second-quarter revenue of $651 million, with organic growth declining 2% year-over-year. Diagnostics accounted for roughly 61% of sales and the tools segment made up the remaining 39%, while process chromatography contributed less than 5% of total revenue.
CFO Roop Lakkaraju highlighted several operational developments. The company's acquisition of Stilla, which closed at the end of June 2025, has progressed faster than initially planned: 99% of Bio-Rad's assays were migrated to the Stilla QX700 platform by the end of Q1 2026, ahead of the original end-of-2026 target. Digital PCR instrument sales rose 20% year-over-year. Bio-Rad maintains more than 400,000 assays on its platform, described as the broadest library in the field.
Management noted that the traditional instrument-to-consumable revenue mix — historically around 20% instruments and 80% consumables — could shift toward 25% to 30% instruments over time as the Stilla integration advances.
On cost management, Bio-Rad outlined an 18-month restructuring program aimed at generating $30 million to $35 million in savings. The initiative focuses on distribution center rationalization, commercial optimization, and IT efficiency. A prior restructuring in February 2025 targeted R&D and finance optimization.
Lakkaraju addressed tariffs, saying Bio-Rad did not impose surcharges on customers but instead applied for refunds through an ongoing appeals process. Any granted refunds would be recorded as a one-time offset.
The company also discussed its stake in Sartorius, stating it cannot afford to increase its position and calling the holding a valuable, monetizable investment that maintains tax efficiency. A deferred tax liability accrues at the statutory rate of low 22%, or 21% on the balance sheet, against the Sartorius holding.
Looking ahead, Bio-Rad expects third-quarter revenue to be roughly flat sequentially at about $651 million, followed by a mid-single-digit sequential increase of approximately 5% in the fourth quarter. Historical Q3-to-Q4 growth typically ranges from 5% to 8%.
Shares rose 40% over the prior six months and traded near a 52-week high of $396, closing at $380.12. The company aims to accelerate annual growth toward market rates of 2% to 4%, up from a historical rate of roughly 1.5% to 2%.
