Qiagen NV (QGEN) 2025 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. I'm [Lisa], your PGI call operator.

Welcome. Thank you for joining QIAGEN's Q1 2025 earnings conference call webcast.

(Operator Instructions) Please be advised that this call is being recorded at QIAGEN's request and will be made available on their Internet site.

The prepared remarks will be followed by a question-and-answer session. (Operator Instructions)

At this time, I'd like to introduce our host, John Gilardi, Vice President, Head of Corporate Communications at QIAGEN. Please go ahead.

Thank you, operator. Welcome, all of you, to our call for the first quarter of 2025. We appreciate your time and interest in QIAGEN.

Joining me today are Thierry Bernard, our Chief Executive Officer; and Roland Sackers, our Chief Financial Officer. Also joining us is Dr. Domenica Martorana, from our IR team.

This call is being webcast live and will be archived in the IR section of our website. A copy of the results, press release, and presentation are available on our website as well.

Before we begin, I'd like to remind you that this call will include forward-looking statements. Actual results may differ materially from those projected due to various factors. These are described in our most recent Form 20-F filed with the US Securities and Exchange Commission.

We will also refer to certain financial measures not prepared in accordance with US' generally accepted accounting principles or GAAP. These non-GAAP measures provide insights for investors. Reconciliations to the most directly comparable GAAP figures are in our release.

Please note that all references to earnings per share refer to diluted EPS.

With that, let me hand the call over to Thierry.

Thank you, John. Hello. Good morning, good afternoon, or good evening to everyone around the world. Thank you, once again, for joining us.

As you have read, QIAGEN delivered a very good and very solid start to 2025, once again demonstrating the resilience and strength of our business. We exceeded our outlook for both net sales and adjusted earnings, even as we continue to operate in a quite complex macro environment, marked by cautious customer spending and evolving global trade dynamics.

Through focused execution and strong operational discipline, QIAGEN is navigating this environment and capitalizing on opportunities to deliver solid profitable growth, while investing in our future.

The performance to start 2025 reflects the differentiation of our portfolio, anchored by growth pillars, all products where QIAGEN has a leadership position in a highly-attractive market. This steady progress and constant execution -- now delivering for 22 quarters in a row -- give us confidence to drive sustainable long-term value creation.

Let me highlight our key messages for today. First, we exceeded our outlook for Q1 2025. The full results confirm net sales of $483 million, rising 7% at CER compared to the first quarter of 2024. Adjusted diluted earnings per share were $0.50 at CER again. This was well ahead of the outlook for at least $0.50 CER.

Second key message, our portfolio is performing well in a quite challenging environment. QIAstat had an outstanding quarter, driven by double-digit sales growth from new panel launches and new instrument placements. We continue to build our global presence in syndromic testing for respiratory, gastrointestinal but also meningitis conditions. We continue to advance research and development initiatives to add panels that creates even more differentiation in the coming years.

Our QuantiFERON tuberculosis test also delivered another strong quarter of double-digit sales growth, as we continue to drive the transition to blood-based testing for TB testing from the outdated skin test.

QIAcuity, our digital PCR platform, continues to build momentum in high-growth fields like oncology, infectious diseases, cell and gene therapy, and microbiome research.

In our Bioinformatics business, QIAGEN Digital Insights is extending its leadership by helping clinical and research customers unlock complex genomics data with greater speed and accuracy.

In Sample Technologies, we are preparing for a new wave of innovations and growth with the upcoming launches of important new automations in three months during the next coming months: QIAsymphony Connect, QIAmini, and QIAsprint.

Third message, we are reaffirming our full-year 2025 outlook. We continue to expect around 4% sales growth at CER, which is about 5% growth in our core portfolio, excluding the discontinued product like NeuMoDx or Dialunox. We confirm the upgrade of our target for adjusted earnings per share for about $2.35 at CER, based on our strong start to 2025. This is up $0.07 from the initial outlook for this year.

As we look ahead in 2025, maintaining strategic flexibility is critical in this volatile environment. It is about adapting to challenges and seizing growth opportunity.

Fourth message for today, we are expanding the range of options to increase return to our shareholders. At our upcoming Annual General Meeting in June, we will propose the introduction of an annual cash dividend. We will also seek shareholder approval for another synthetic share repurchase of up to $500 million for consideration over an 18-month period, with about $600 million already returned to shareholders since 2024.

Those actions reflect our disciplined approach to capital allocation. We are moving ahead on our target to return at least $1 billion to shareholders by the end of 2028, absent of significant M&A.

Finally, I would also like to mention the upcoming leadership transition in our Supervisory Board, as well as the decision of two members to step down after the upcoming Annual General Meeting.

On behalf of our leadership team and every QIAGENers, we want to sincerely thank Larry Rosen for his dedicated service since 2013; and in particular, as our Chairman of QIAGEN since 2020. This transition reflects a long-planned evolution in our governance.

After 12 years of valued service on our Supervisory Board, Larry is no longer classified as independent under proxy advisory guidelines. We, therefore, look forward to continue working closely with Steve Rusckowski, who is intended to be elected by the Board as our new Chairman after the general assembly.

Steve, as you all know, brings extensive global health care leadership experience to QIAGEN. That will support our ambitions in the years ahead.

We would also like to thank Elaine Mardis, who also decided not to stand for re-election. Elaine provided tremendous scientific insight and deep expertise as a member of the Board since 2014.

With that, we are back to eight Supervisory Board members, a composition consistent with historical levels at QIAGEN.

To give you a quick summary, all of these elements -- a great portfolio, a strong execution, combined with expanded opportunities for shareholders returns and development in our leadership -- help position QIAGEN to make important progress in 2025, towards delivering on our '28 ambitions.

With that, I now would like to hand the call over to Roland to provide some more details on our financial results.

Thank you, Thierry. Hello, everyone. We are pleased with the start to 2025 and see opportunities to deliver very strong results.

Let me provide some highlights from the quarter. First, we delivered a significant improvement in profitability. Our adjusted operating income margin rose to 29.8% of sales, up more than 4 percentage points from the first quarter of '24.

We are very encouraged by the key drivers of this margin expansion. They included a favorable shift towards Consumables and Bioinformatics Solutions. We are also seeing benefits from portfolio optimization actions; in particular, the phase-out of NeuMoDx. This is on track for completion in mid '25. Another point we are seeing is an even higher level of discipline across QIAGEN in managing our cost base. The recent evolution of our organization was a key trigger for this.

The broad progress is enabling us to invest in targeted areas like R&D, in line with our target for about 9% to 10% of sales. We are steadily driving the digitization of our commercial channels to enhance customer engagement.

In light of this strong progress and the fact that we continue to see momentum and an opportunity for growth, we are reviewing our target for an adjusted operating income margin of at least 31%, well ahead of the original timeline for '28. This represents well over 300 basis points of margin improvement since '23.

Let me now walk through some of the additional details on our performance. Among our product groups, Diagnostic Solutions sales rose 11% at constant exchange rates, driven by another strong quarter from QIAstat-Dx sales, rising 37%; and QuantiFERON sales up 16%.

PCR Technologies delivered 14% CER growth, led by rising adoption of the QIAcuity digital PCR system and very strong growth in Consumables; also supporting the performance for higher sales of other products used in non-regulated PCR applications, including our OEM business.

Sample Technology sales were down 1% CER, reflecting lower instrument sales amid cautious customer spending.

At the same time, we saw good trends for automation consumers in key regions; in particular, high-single-digit growth in the EMEA region; and also, higher sales in the Asia-Pacific region, outside of China.

In Genomics and Next-Generation Sequencing, sales were down 2% at CER compared to the first quarter of '24. This reflected lower demand for some NGS consumables and services during the quarter. However, we saw high single-digit CER growth from QIAGEN Digital Insights, as both our discovery and clinical portfolios delivered strong performance. The positive momentum in QDI is an encouraging signal as we work through the transition to start subscription models from longer-term licensing agreements, particularly with pharma customers.

Turning to regional performance, the Americas grew 9% at constant exchange rates, supported by strong performance in the US, Canada, and Latin America. The

EMEA region delivered 8% growth at CER, reflecting broad-based contribution across key markets. The top-performing countries included Germany and Italy, as well as the Middle East.

Asia-Pacific experienced a modest decline, primarily driven by ongoing weak trends in China, a country that only represents about 3% to 4% of total sales but still saw a high-teens CER decline over the same period in '24. This overshadowed expansion in other countries; in particular, solid single-digit growth in Japan.

Turning to cash flow, we generated $140 million in operating cash flow during the first quarter compared to $133 million in the first quarter of '24. The results were even stronger, given that the '25 results included about $19 million of cash payments for the efficiency initiatives.

Free cash flow was $96 million, reflecting planned investments into targeted digital transformation initiatives. This includes upgrade of our SAP system that is moving into the implementation phase this year.

We continue to see improvements in working capital management, based on solid operational control. As an example, we saw another improvement in accounts receivable as the days of sales outstanding stood at 55 days in the first quarter compared to 58 days in the year-ago period.

Inventory days also improved to 175 days for the first quarter of '25 compared to 221 days in the same period of '24, as we continue to closely monitor supply chain trends in this environment to ensure adequate customer product availability.

In terms of capital allocation, as noted in our earnings release, we are proposing to introduce a cash dividend to provide a new avenue for increased shareholder returns, while preserving flexibility to reinvest in long-term growth. The initial annual dividend payment would be USD0.25 per ordinary share.

We also seek shareholder approval for a new share repurchase authorization. This is complemented by our team's reviewing opportunities for value-creating M&A that strengthen our portfolio and will create new opportunities to enhance our growth profile.

In essence, our strong financial position gives us the possibility to invest in strategic initiatives for future growth, while expanding our range of ways to increase returns to shareholders.

With that, let me hand the call back to Thierry.

Thanks a lot, Roland.

Let's now look at the progress across our product portfolio, starting, of course, with Sample Technologies. As you have probably read, we are preparing for the next wave of automation with the planned launch of three new instruments at QIAGEN: QIAsymphony Connect, QIAmini, and QIAsprint Connect.

First, QIAsymphony Connect is our next-generation flagship system. This is set for phased launch starting end of 2025. QIAsymphony Connect combines enhanced automation, digital connectivity, and expanded application flexibility -- for example, for liquid biopsy customers.

In 2026, we plan to introduce QIAmini to serve low throughput labs; and QIAsprint Connect to address high throughput demands, with up to 600 samples per day. Early access users have already shown very strong interest for those solutions.

Together, those innovations will strengthen and expand our leadership in automated sample preparation by offering comprehensive and scalable solution to meet customer needs.

In terms of supporting public health, once again, in Sample tech, we recently launched the QIAprep&amp Plasmodium Kit. This uses our proven liquid-based sample prep method as a new way to help research and surveillance of this global health threat, especially in areas with limited health care infrastructure.

Second, turning to QuantiFERON, our market-leading blood-based test for latent tuberculosis detection. QIAGEN remains very confident in our ambition to reach at least 600 million sales by 2028 for QuantiFERON.

We have continuously improved and invested in QuantiFERON development, which is now in its fourth generation. We are obviously not stopping here. We are already preparing the fifth-generation version. The fifth generation version of QuantiFERON will bring further improvements in automation, throughput, and workflow efficiency.

Over time, we believe there is a clear opportunity to continue to increase conversion well beyond the current 40% level in the market for the time being.

Third, QIAstat-Dx, our syndromic testing platform that continues to expand its American presence. Earlier this year, we received FDA clearance for the second QIAstat GI mini-panel gastrointestinal targeting five key bacterial pathogens. Designed for outpatient care, this panel complements the previously cleared bacterial and viral versions, providing fast results with very minimal hands-on time.

Our portfolio for QIAstat now includes all three major American syndromic panels: respiratory, gastrointestinal, and meningitis. We have, on top of that, in the US, three mini-panel tailored to outpatient testing. With those options, QIAstat is very well positioned to meet rising demand for flexible and rapid syndromic testing for both hospital but also outpatient settings.

Moving to QIAcuity now. Our digital PCR platform that continues to deliver innovation but also market share and growth. We started 2025 with a major and significant upgrade. QIAcuity now supports the simultaneous detection of up to 12 targets from a single biological sample, more than double the capacity we had before. This expanded multiplexing capability is helping researchers across applications like translational research, microbiome analysis, pathogen detection, and the development of cell engine therapies.

By saving time, reagents, and precious sample material, QIAcuity is making laboratory workflows more productive and cost efficient. It definitely strengthens our position into the digital PCR market.

We are also on track to launch at least another 100 new assays in 2025, building on an already strong portfolio expansion in '24 that has been a contributor, obviously, to the strong uptake and growth in consumables.

As part of this new wave of assays, our teams recently launched the first new cell and gene therapy assets of the year, including our first assay dedicated to lentivirus application. This is really a very strong start to our '25 menu expansions. This definitely helps strengthen our installed base, broadens use cases as well as customer reach, and support our competitive market share in digital PCR.

Closing with QIAGEN Digital Insights, our Bioinformatics business that continued to strengthen its global reach. As you have seen, we recently opened a new data center in Melbourne, Australia, expanding our secure cloud infrastructure to eight global sites. This investment enhances our presence in the regions by enabling compliance with local regulation and also, advancing clinical Next-Generation Sequencing adoptions.

As you can see, with those efforts, QDI, QIAGEN Digital Insights, is well positioned to continue to support the growing demand for Bioinformatics solutions in both research and clinical settings.

Now, once again, back to Roland with the details on our outlook.

Thank you, Thierry. Let me now provide some more perspectives on our outlook for '25 and the second quarter.

Our ambition remains clear: to deliver another year of solid profitable growth and continued improvement in operational profitability.

For the full year, we are reaffirming our outlook for net sales growth in '25 of about 4% at CER. This reflects about 5% CER growth for our core portfolio that excludes the discontinued NeuMoDx and Dialunox products.

Given the current volatility, we remain conservative about the revenue growth for the second half of the year but could well increase our net sales guidance once we have more visibility on the macro trends.

On adjusted earnings per share, we are reaffirming the recently upgraded target for about $2.35 at constant exchange rates. This reflects about 8% CER growth compared to '24, supported by operational margin expansion, while also accounting for the current tariff environment and a better-than-expected adjusted tax rate versus the beginning of '25.

For the same quarter of '25, we are targeting net sales growth of at least 5% at constant exchange rates. This translates to at least 5% CER growth in our core portfolio, excluding discontinued NeuMoDx and Dialunox products.

Adjusted earnings per share are expected to be at least $0.60, up from results of $0.55 in the year-ago period. Another solid improvement.

Turning briefly to currency trends., this has improved since the start of the year. We now expect less headwind, given the current US dollar trends against the euro and other key currencies.

For the full year, we now expect currency movements to be neutral on net sales and a negative impact of about $0.01 to $0.02 on adjusted earnings per share -- so slightly better than the assumption from the start of the year.

For the second quarter, we anticipate a positive impact on the sales of about 1 percentage point and neutral currency movement on adjusted earnings per share.

Overall, our guidance reflects a balanced view of both opportunities and challenges in today's macroeconomic environment.

Our results for the first quarter and the latest reviews with our teams give us confidence in our strategy, our execution, and our ability to deliver on these targets.

I would like to now hand back to Thierry.

Thanks a lot, Roland, Domenica, and John.

As usual, to all of you, we are very respectful of your time so let me very quickly summarize before we move to the Q&A part.

First, we delivered a very good and solid start to 2025, exceeding our outlook for both net sales and adjusting earnings in the first quarter. Our highly-recurring revenues account for about 90% of our total sales are our key foundation for growth, even in this macro environment where customer spending remains cautious.

We were especially very pleased with the strong contribution from QIAstat and from QuantiFERON; and the momentum gain in QIAcuity, together with the robust performance of QIAGEN Digital Insights. Those successes, along with our efficiency initiatives, drove a significant improvement in our adjusted operating income margin and supported another quarter of very strong cash flow generation.

We have reaffirmed our recently upgraded target for adjusted earnings and also reaffirmed our full-year '25 targets for net sales. This is combined with our commitment for further significant margin expansion, as we move above 30% this year.

Our financial strength and operational flexibility gives us increasing conviction in our ability to deliver on our 2028 commitments for solid profitable growth and stronger shareholders' return.

That said, back to John and the operator for the Q&A session. Thank you.

(Operator Instructions)

Dan Leonard, UBS.

I'll keep it to one. I was hoping you could elaborate a bit further on what drove the acceleration in QuantiFERON in the quarter? I know you mentioned skin test conversion. But that's a trend that's been underway for a couple of decades.

So perhaps there's some additional color on the quarter performance specifically.

Thanks a lot, Dan.

No. There is no specific event. It's just a confirmation of our strategy based on constant innovation. As we said today, we are at the fourth generation of product. We definitely have proven reliability and quality. You have seen in our recent Deep Dive on QuantiFERON, the number of citations, a number of publications.

Second, the value of our partnership for automation with not only DiaSorin but also Tecan, Hamilton. All these together reinforces the continuous global performance of QuantiFERON.

I insist on global. It is growing all over the world: in North America, Europe, Middle East, Asia Pacific.

Doug Schenkel, Wolfe Research.

Just a couple on guidance. Given Q1 strength and given how you're guiding Q2, our math suggest that essentially you're assuming a deceleration in top-line growth to around 4% in the second half.

I definitely could be doing the math wrong. But if I'm not, I just want to see if there's something you're seeing that's moderating from a growth standpoint. It doesn't sound like that's the case.

So really cutting through all of this. Is this just prudent conservatism in the current environment? So that's the first question.

And then, the second is, again, on guidance, you're maintaining your 4% constant currency outlook for the full year at the top line. Recognizing how the environment has changed over the last few weeks and few months, are there specific areas that we should be thinking of that are doing better than original plan? And then, if so, what are the offsets?

Doug, thanks a lot. You call that conservatism. I would call it realistic ambitions. Your math is not necessarily wrong but you have also seen that the volatility in our economic environment or geopolitical environment has not improved. Not at all. So we are still living and operating in a shaky environment.

This is why we prefer to remain prudent. But obviously, as soon as we have more visibility, we will not hesitate to upgrade and update our top line, also, guidance. But we need to have more weeks of visibility behind us before doing this.

And so on the guidance for 4%, which is 5%, excluding Dialunox and NeuMoDx divestment -- based our guidance taking into account that volatility, taking into account and weathering the current discussions or debates around tariffs in the world, for example, at the same time, factoring the still cautious environment on spending, especially for capital sales, factoring also the discussion around research funding in different countries of the world but also leveraging the very good start of QuantiFERON, of QIAstat of QDI, and the good performance of QIAcuity in consumables.

Patrick Donnelly, Citi.

Maybe one just on the tariff exposure, probably for Roland. Can you just run through what you're seeing on that front? Any mitigations?

We've heard from some others, some of the diagnostic agents are more on the exempt side with China. I know you guys don't have a ton of exposure there, but can you just talk through what you're seeing on that front and what the impact could be?

Yes. Patrick, I think overall, just to put things in perspective, as you know, it's clearly a very volatile environment and I'm quite sure there will be more changes.

By the way, there is one of the points that you just raised that there's nothing company specific, which will change the direction right now, we really are a bit more conservative right now in terms of the outlook for the year.

Same is true here on the tariff side. We feel actually that we were well prepared moving into that year. We went up quite early, our inventory levels. We reviewed our supply chains and waste. We clearly looked on also a couple of company processes.

All of that, which I think allowed us to, I guess, mitigate most of this impact, which we, right now, seeing is clearly also the benefit that we are working closely with our customers in sharing some of these impacts.

At the same time, I think it's also very fair to say that we see right now also a somewhat lower tax environment in general, which is helping us not only to compensate but as you have seen with our guidance, increase on the EPS side, even overcompensating for the impact we see on the tariff side.

Have in mind that we do not have anything material from China into the US. That is nothing that is important for us. As you know, from US into China, right now, in general, that is something that is not really material. And therefore, I would say, for us, it is really something which we will, so far, very well able to manage, which is US to Europe -- not Europe, US, sorry.

Yes. That's helpful. And then, maybe a quick one just on the margin levers for this year. The expansion has been pretty healthy. Can you just talk about the levers as you work your way through the year on the margin, just the puts-and-takes and again how we should think about the progression as the year goes?

Thanks for that question because I think it allows me also to re-emphasize one important message. As you know, on the one side, we said before that we discontinued NeuMoDx in particular, last year. But this only accounts for somewhere around 40% to 45% of the overall margin improvement.

I think in one of the earlier calls alluded to that we have actually ongoing, what we call, QIAGEN efficiency programs. They are actually adding up quite nicely -- that goes all the way from digitization initiatives.

As you know, we also, to a certain extent, reorganized the company end of last year.

This all is happening actually quite nicely to improve margins. So we expect also clearly, for this year to end up north of 30%; again, outside any larger or whatever tariff macro impacts, which might or might not happen.

But in that environment which we're seeing right now, I think we feel very confident that we stay north of 30% and clearly expanding from that level also, going forward.

Tycho Peterson, Jefferies.

I want to probe on some of the other guidance assumptions. Academic and government has obviously been a pressure point. We've seen most of your peers kind of recalibrate expectations for the year. Just curious what you guys are baking in for US academic and government for the rest of the year?

And then, instrument softness, curious if you're assuming any stabilization or recovery on instruments, in particular for QIAcuity?

And then Roland, you kind of alluded to maybe potential drivers of upside in the back half of the year. Curious where you think that could come from?

So thanks, Tycho. So first of all, as you know, 90% of our revenues are coming from Consumables. So I believe, therefore, that with this, we are probably a bit less exposed to huge cuts in academia and research. But obviously, like any company involved in research and academia testing, we feel that there is a slow environment. And we remain cautious.

That drives, by the way, when I answered the questions from Doug, why we continue to maintain our guidance. It's just being cautious because the environment is not moving that fast.

That being said, I believe that we are a bit more protected. I believe also that most of our sales in research and academia are still mainly around Sample Tech. Those are expenses that are very difficult to completely eliminate.

For capital sales, our assumption continues to be that we should see a level of normalization in the second half of the year or early 2026. Obviously, it's very difficult to predict that. We continue to say that there is a normal cycle of renewal in instruments in labs. It's very difficult to say exactly or to know when it's going to happen. But we believe it has to normalize at a certain point in the coming months.

Roland, do you want to take the second part of the question?

Yeah. Again, just to add on that, on the instrumentation side, of course, have in mind also that most of our instruments clearly have price points, which are probably for instrument on the lower side -- so that's clearly also helpful, and you see particular QIAstat and QIAcuity doing quite well. And again, I don't see any reason that, that should change over the course of the year.

In general, upside, I think you have seen where we started very well and strong into the year from QIAstat, where, again, what is really driving that is the menu expansion. As you know, we got a significant number of products approved last year through the FDA. That clearly helps us not only in the US, with gastro and meningitis; to expand on that, the larger instruments going online. So there's a lot of things being helpful.

We added menu quite nicely to the QIAcuity. We added 100 panels last year. We're going to add another 100 panels this year. Therefore, the Consumables pull-through continues to be quite strong.

So I would say it's a mix of new launches and then, clearly also what we believe that the focus, which I think QIAGEN now is driving since quite some time, still pays off.

Michael Ryskin, Bank of America.

Great. I think Tycho touched on NIH -- or sorry, I think one of the earlier questions touched on NIH and government policy. I want to talk a little bit about the pharma, biotech end market, what you're seeing there. I think it's been a little bit weaker to start the year. Obviously, there's still a lot of noise and there's potential for more noise from ongoing discussions from pharma-specific tariffs. Just curious if you're seeing anything different in budgets relative to how you were going into the year.

And I'll throw in my second one at the same time, capital deployment front, the initiation of the dividend, a little bit more color on the buybacks. Just curious how you're going to balance capital allocation priorities between those two and M&A going forward, just a gearing --

Those are good questions, Michael. Thanks a lot.

On the pharma side, I would say, on Direct Testing sales, we are pleased with the performance of especially solutions like QIAcuity on the pharma side. This is where we get the best pull-through on our large throughput QIAcuity system. We call it the eight-plate system. So we don't see any specific downgrading of the situation here.

What I would say -- what we believe is encouraging is that we see a growing appetite, again, pharma company for companion diagnostic. And you see that this is a good activity for QIAGEN. This is where we are probably the leader in the world. We are the only company offering pharma companies with solution, not only on PCR companion diagnostic but also NGS companion diagnostics and also digital PCR.

And you have seen recently also that we have opened contracts on QIAstat. So we see a pretty good demand here. We are pretty confident that this should continue.

On capital allocation, we continue to try to optimize the managements of our healthy balance sheet. As you know, we have three priorities:

First of all, investing into our organic growth, which is R&D. QIAGEN maintains healthy investment on R&D ratio to sales. It's around 9% to 10%. It's a good ratio. But we always need to make sure that, that ratio is paying off and that we have good return factors from those research and development investments.

Second, the new announcement of share buybacks are just proving our active listening to investors and to analysts. Many of you have been telling us for the last years that dividends could open up our stock price to a different kind of investors. We listened. We took our time. We decided to come with that policy. And we perfectly understand that it's a long-term policy as well.

The increase to up to [500] is an authorization. That doesn't mean that it's going to happen on a given date. We said that we have 18 months to deploy that. But it's also that confirm vision and willingness to return the appropriate level of capital to our shareholders. They deserve that. We believe also in our company.

Third is M&A. It's not one against the other or it's not that M&A is going to become less of a priority. We believe that in M&A to create value, it has to be synergistic with our current portfolio. We mainly focused on, what we say, bolt-on or what we call, bolt-on. I would invite you to stay tuned because we have a very, very good pipeline. I think we are in a position potentially to close some of those M&A in the coming weeks.

Jan Koch, Deutsche Bank.

My first question is on Sample Tech. What kind of growth should we assume over the coming quarters, given that the comps are actually getting a bit tougher? And do you expect a catch-up in instruments once you have launched the new instruments driven by pent-up demand?

And then, secondly, on QuantiFERON, could you remind us of the market potential you are seeing in China? Given that China is not really a focus market for your partner, do you believe that the installed base of instruments in China is sufficient to grab that market opportunity once you receive the necessary approval?

Thanks a lot, Jan.

On Sample Tech, this is a strategy. But let me highlight something.: what the current numbers are not really showing is that where we have decided to clearly put the research and development efforts in what we call high-value Sample Tech -- applications like liquid biopsy, minimal residual diseases, microbiome research.

We are growing. We are, in some of those fields, growing at double digit. This is exactly where we want to go.

Second, to your point, obviously, there is no other competitor in Sample Tech with such a program of investment into new systems, at least not new. It has started three years ago when we started to upgrade QIAcube with QIAcube Connect EZ1 to EZ2. Now, we have those three launches.

So all these together makes us believe that the guidance that we gave you in New York during our Capital Market Day last year in June -- to come back to a growth of around 3% per year -- is really achievable.

To QuantiFERON China, honestly, Jan, at the moment, QuantiFERON China is the leading blood-based test for latent TB. We have many competitors that are very local that are not elsewhere but in China. It is not our top priority.

We will bring the workflow of automation with DiaSorin to the regulatory authorities. But the growth of QuantiFERON absolutely does not depend of the performance in China. I would not qualify China as a priority for QuantiFERON. It's a market. We are using all our presence, including with DiaSorin, to continue to take market share. But this is how we would see it.

Jack Meehan, Nephron Research.

I wanted to ask about the PCR strength in the quarter through two lenses.

First was if you look at the 14% growth in QIAcuity, high single digits, it implies everything else grew in the high teens. So I was just wondering if you could talk about why that was so strong?

And then, on QIAcuity, it seems like things are going well on the Consumables side but it does also feel like that prior $105 million target might be a little bit of a stretch, given the instrument environment. I was just curious if you had any updated thoughts on that, too.

Thank you, Jack.

On the first question, first of all, especially if you compare with what has been disclosed by some competitors, we are growing in digital PCR. We continue to sell or to place instruments.

Obviously, given the environment on capital expenses, of course, we would like to be able to place more but we still grow. We are posting, as you said yourself, very nice growth in Consumables. So we are definitely taking market share. You have seen from other disclosure that is not necessarily the case elsewhere.

On the rest of the PCR portfolio, what was quite interesting and encouraging this quarter was the performance of our OEM sales. And you remember that this is also an activity of QIAGEN, where we have always said, it's difficult sometimes to plan for growth on a quarterly basis because those are mainly bulk sales. So you have sometimes high quarters, lower quarter, the quarter after.

So overall, OEM for us is, on a yearly basis, roughly $80 million (inaudible) activities. But it performed very well in Q1.

So now, addressing your -- is this a stretch or is there a stretch on QIAcuity? For sure. We acknowledge that the capital sales environment, especially in research lab or academia, is not helping. But honestly, Jack, this solution, QIAcuity, is taking market share. It has been, probably, the fastest growing installed base ever in Diagnostics and Life Sciences.

We continue to grow in Consumables, as Roland said, as we said during this call. I will not judge the efficiency of that solution just on the year, let alone on a quarterly basis. We confirm what we told you. We are on our way to get above $200 million by 2028. This solution deserves to be the number 1 in the market on digital PCR. We confirm that ambition.

Dan Brennan, TD Cowen.

Maybe one for Roland and then, for Thierry.

Roland, just back on the tariff math, if you could -- did you guys ever size what the gross impact is? Obviously, you're doing a terrific job offsetting it but I'd be interested to see just what that impact is on the growth side between cost actions and moving production and suppliers? Anything you can share on kind of how you're offsetting that? Just a little more detail since it is (inaudible) a topic.

And then, b, Thierry for you, on M&A and a prior question, did I hear you say something about the next couple of weeks? Like is there something -- can you just discuss what the pipeline looks like there?

And then just finally, what are you guys assuming for the rest of the year for QIAstat after the really strong quarter in the first quarter?

Roland, do you want to take the first part?

Yeah. Thank you, Dan. Yeah. To be honest, I wish I could because the reason why I think it's not as easy for us is we started actually already quite early last year with some of the mitigation actions. As I said, we changed quite of internal procedures. We really went up inventories. Therefore, it is not actually to set a baseline.

But I think what is fair to say that our assumption, right now, is probably that it would be probably a few cents EPS for the period. Nevertheless, as I said, there's clearly an area which we were able to offset, so far.

So I would say we feel comfortable that in that given environment, something that we can cover quite nicely. And then, we have to see what moves.

But I would say, so far, we feel quite comfortable. We're still looking into that, if there's other areas where we can improve. Again, a big impact for us is clearly also that we are actively working with our customers and explain to them the actual situation.

Thank you, Roland. And to follow up on the question on M&A, what I confirm is that it's clearly one of the top priorities of our capital allocation. As you know, we have a very healthy balance sheet. We have a very long lasting experience of M&A, especially bolt-on.

I just can tell you that our pipeline is very solid. We are engaged in every discussions that are coming to now, I hope, closing. But as you can imagine, it always takes two to tango. And as long as the signature is not done, I don't say anything. But yes, I confirm that in the coming weeks, we should be in a position to communicate on some of those. That's the first one.

On QIAstat, obviously, as you know, this winter has been another -- once again, quite strong respiratory season. We have been able to answer customer needs here. But our growth is not just regulatory, all the parameters, GI and meningitis.

So let me put it like this: it's a strong start and so we confirm our guidance for QIAstat. We believe that it will be double digit at the end of the year, once again.

Catherine Schulte, Baird.

Maybe, first, on China. I know it's small part of your business but seeing some decent declines there. What does that look like on the Diagnostics side versus Life Sciences? Would just be curious if there are any different trends between those two buckets?

And my second question would be on QDI. Can you just talk about what you're seeing there? I think you said you grew high single digits in the quarter and you're expecting 15% in that longer-term outlook at your Investor Day. So just curious if you're still confident on that side.

Thanks, Catherine, for the question. On China, I think there is no specific change to what we come saying in the last three years. China is too big of a market to be ignored. And at the same time, it's too specific and too complex of the market and too risky of the market those days to make it a priority. It's a very limited percentage of our sales.

Roland spoke about that. At the moment, it's at 4%. The market is very specific in the sense that they favor local manufacturing. They will always favor local manufacturers.

It does impact not only Life Sciences but also, Diagnostics solutions. But as far as QIAGEN is concerned, we continue to grow in QuantiFERON, every quarter. We have more difficulties and we are more impacted by that context that I described on Life Sciences and other activities. That's the way to see it.

Again, too large of a market to be ignored; too complex, too risky to make it a priority.

QDI, what we are pleased with in Q1 -- and we communicated that, if you remember, in the Deep Dive we organized in December: this leading position from QIAGEN, I remind you that at around $100 million, we are the leader on the market. Not only the leader but we are also a profitable leader.

Unlike competition, is evolving to a SaaS business model. And we said in December that it will take probably a year. We start to see that normalization already in Q1. What we were pleased with in Q1 is that both activities of QDI, as Roland said -- not only clinical but also discovery -- were doing better than Q4 and Q3 of last year. So this is encouraging.

Now, for the ambition for this year, I would put it as a high single digit. That's our objective. This is what we want to deliver.

I continue to believe that the full normalization and transition to that SaaS business model will happen throughout 2025.

Matt Sykes, Goldman Sachs.

I'll leave it to one. Just wanted to focus on Sample Tech. You guys have talked about a pretty clearly articulated strategy to improve growth in that area through the launching of the automated instruments and you've given us time line.

I guess my question is, given that time line and given sort of the CapEx constraints that are currently in the environment from the customer side, do you feel that the value proposition, the cost savings or higher throughput that you're offering to this automation will help penetrate through maybe a sustained weaker capital equipment environment so you could still see that acceleration in Sample Tech as we move through '26?

Well, Matt, we believe so. This is our assumption because none of those systems are [me too]. They all comes with innovation. This is visible to customers.

When I said about QIAsymphony and our customers in liquid biopsy, this is the feedback at the moment: I said that QIAsprint was already highly regarded by some major pharma -- potential partners.

This is encouraging. Why? Because they bring innovation in cost-saving, in time-to-result, in easy-to-use handling.

So we believe that this will help us, despite the constrained environment, to bring them to customers and get those contracts.

Obviously, if capital expense remains very low, we might see some delays around '25 and '26. But over the long run, our ambition for '28 remains unchanged because those are instruments that are bringing value and differentiation.

Casey Woodring, J.P. Morgan.

Great. Roland, you mentioned expecting to reach your 31% midterm margin goal well ahead of 2028. Does that well ahead in 2026 or '27? And I guess what are the variables that would get you there in '26 versus '27?

And then, on the companion diagnostics, you said that the partnership revenue there grew double digits in the quarter. Can you just give us a sense as to what you're expecting from a revenue perspective from companion diagnostics partnership revenue that's growing; and then, how to think about that opportunity moving forward?

Hi, Casey. I think we had so many news today that I want to keep something for probably later into the year. So again, we will update the number, as we said, at a given point, when we also feel that we are well on our way with our planning for '26.

Again, for me, there is no question that we are going to reach it. There is no question that's going to reach earlier. But we also want to give you the right magnitude because we probably have to update not only the '26 number but also, the '28 ambition.

So give us a bit of time. And as always, once we feel ready, we will go out.

And to your question on CDx, on companion diagnostic, we see a potential; and we have always disclosed the same, of double-digit. Those products are bringing value to pharma.

You know that we have probably the most extended network of pharma contracts in the market. We have more than 35 main contracts with pharma.

What is very interesting is that we keep adding solutions. Four years ago, five years ago, QIAGEN companion diagnostic was mainly PCR. And then, we added NGS capabilities. And then, more recently, we added digital PCR. And then, last year, as you have seen, we added syndrome capabilities.

So it's healthy. It's a very good window for our technology, as well.

As you know, also, we have signed a network of what we call day-one laboratory contract because what is the key of companion diagnostic, Casey, is that any time the drug is available, you need to make sure that the test is available at the same time.

So we have a network of partners, labs -- all over the world -- that make sure that as soon as the drug hits the market, we are ready to test the patient, as well. This is why we believe that the double-digit growth for this business is perfectly achievable.

Okay, Thierry and Roland, thank you very much. Thank you for all of you for joining our call.

Let me close it here. If you have any questions or comments, please don't hesitate to reach out to Domenica and me.

Thank you very much. Bye-bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for joining.

Have a pleasant day. Goodbye.