TECH Q1 Earnings Call: Management Highlights Market Uncertainties and Strategic Mitigation Efforts

June 10, 2025 at 13:15 PM EDT

TECH Cover Image

Life sciences company Bio-Techne (NASDAQ: TECH) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 4.2% year on year to $316.2 million. Its non-GAAP profit of $0.56 per share was 10.4% above analysts’ consensus estimates.

Is now the time to buy TECH? Find out in our full research report (it’s free).

Bio-Techne (TECH) Q1 CY2025 Highlights:

Revenue: $316.2 million vs analyst estimates of $317.4 million (4.2% year-on-year growth, in line)
Adjusted EPS: $0.56 vs analyst estimates of $0.51 (10.4% beat)
Adjusted EBITDA: $119.1 million vs analyst estimates of $114.1 million (37.7% margin, 4.3% beat)
Operating Margin: 12.2%, down from 22.1% in the same quarter last year
Organic Revenue rose 5.7% year on year (2.3% in the same quarter last year)
Market Capitalization: $7.82 billion

StockStory’s Take

Bio-Techne’s first quarter results were shaped by growth in its Protein Sciences division and ongoing cost management initiatives. CEO Kim Kelderman cited strong demand from large pharmaceutical customers and volume leverage in protein analysis tools as primary contributors to organic revenue growth. Management also emphasized operational efficiencies, such as streamlined SG&A and selective R&D investment, which supported profitability amid a challenging environment. CFO Jim Hippel noted, “The teams have been doing a great job actually for a couple of years now...especially with the increased uncertainty that we’ve been seeing in our end markets.” Segment performance was mixed, with robust double-digit growth in large pharma offsetting flat results in U.S. academia due to funding uncertainty.

Looking forward, Bio-Techne’s outlook is influenced by several macroeconomic and policy-related uncertainties, particularly around U.S. National Institutes of Health (NIH) funding and evolving global tariffs. Management expects these headwinds to slow short-term growth, with CFO Jim Hippel acknowledging that “the additional macro uncertainties around tariffs and potential budget cuts...are likely to cause further distraction for our customers.” Despite this, the company believes it can mitigate most tariff impacts through regional production adjustments and supply chain optimization. CEO Kim Kelderman stated that clarity on NIH and tariff policies in the coming months should allow Bio-Techne to resume its growth trajectory, especially as funding priorities shift toward chronic disease research, which aligns with the company’s core product strengths.

Key Insights from Management’s Remarks

Management attributed first quarter performance to growth in pharma end markets, efficiency initiatives, and strategic responses to external policy shifts. Forward-looking commentary centered on navigating NIH funding uncertainty and tariff impacts.

Large pharma demand strong: Growth in the Protein Sciences division was driven by increased orders from large pharmaceutical companies, which saw double-digit organic growth. Management highlighted momentum in protein analysis tools, particularly the Maurice platform, for quality control and gene therapy applications.
Academic market headwinds: U.S. academic revenue was flat as customers faced uncertainty around NIH funding, largely due to a proposed cap on indirect cost reimbursement and potential federal budget cuts. Management said this uncertainty impacted capital equipment purchases and order timing.
Tariff mitigation strategies: Management explained that recent tariff escalations, especially those affecting China, had a limited impact due to Bio-Techne’s global manufacturing footprint. The company mobilized teams to shift instrument production regionally and leverage supply chain flexibility, aiming to fully offset tariff costs by the next quarter.
Diagnostics and Spatial Biology segment mixed: The diagnostics business experienced order timing effects, while the Asuragen portfolio maintained year-to-date double-digit growth. The COMET spatial biology platform delivered double-digit instrument growth, with adoption supported by multiomic automation capabilities.
Cost discipline and operational leverage: CFO Jim Hippel described disciplined cost control, particularly in discretionary spending, as a meaningful contributor to margin performance. Efficiency gains from integrating acquisitions and digital process improvements were cited as supporting profitability during the quarter.

Drivers of Future Performance

Management projects that ongoing policy uncertainty and macroeconomic factors will influence growth and profitability in the near term, while strategic actions aim to mitigate these risks.

NIH funding visibility critical: The company’s academic end-market performance depends on clarity around future NIH budgets and grant priorities. Management noted that, while a severe funding reduction would have a limited long-term impact due to portfolio diversification, short-term uncertainty is dampening capital spending in U.S. academia.
Tariff adaptation measures: Bio-Techne expects to fully neutralize current tariff impacts through regionalized production and supply chain adjustments by the start of the next quarter. These efforts are designed to protect margins even if trade policies evolve further.
Pharma and biotech order patterns: Large pharma customers are expected to remain resilient, but smaller biotech spending is sensitive to capital markets and economic volatility. Management will watch for stabilization in China and continued adoption of GMP reagents and the Maurice platform to support recovery.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) stabilization in U.S. academic and government funding, particularly any developments in NIH grant policies; (2) the effectiveness of Bio-Techne’s tariff mitigation strategies and their impact on margins; and (3) growth trends in China and biotech end markets as local economic conditions and capital flows evolve. Execution in these areas will signal the company’s ability to navigate ongoing macroeconomic and policy volatility.

Bio-Techne currently trades at a forward P/E ratio of 23.9×. Should you double down or take your chips? Find out in our full research report (it’s free).

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