Life sciences company Bio-Techne (NASDAQ:TECH) announced better-than-expected revenue in Q2 CY2025, with sales up 3.5% year on year to $317 million. Its non-GAAP profit of $0.53 per share was 6.1% above analysts’ consensus estimates.
Is now the time to buy TECH? Find out in our full research report (it’s free).
Bio-Techne (TECH) Q2 CY2025 Highlights:
- Revenue: $317 million vs analyst estimates of $314.7 million (3.5% year-on-year growth, 0.7% beat)
- Adjusted EPS: $0.53 vs analyst estimates of $0.50 (6.1% beat)
- Adjusted EBITDA: $115.6 million vs analyst estimates of $110.2 million (36.5% margin, 4.9% beat)
- Operating Margin: -7.5%, down from 15% in the same quarter last year
- Organic Revenue rose 2.6% year on year (0.7% in the same quarter last year)
- Market Capitalization: $7.86 billion
StockStory’s Take
Bio-Techne’s second quarter results were met with a negative market reaction despite topping Wall Street’s revenue and profit expectations. Management attributed the performance to robust growth from large pharmaceutical customers, driven by continued demand for automated proteomic analytical instruments and cell therapy solutions. However, the company faced margin compression, which President and CEO Kim Kelderman linked to unfavorable product mix and ongoing challenges in the biotech and academic funding environments. The divestiture of the Exosome Diagnostics business was highlighted as a strategic step to streamline operations and focus on core growth pillars.
Looking ahead, Bio-Techne’s guidance is shaped by persistent uncertainty around U.S. policy changes affecting pharmaceutical tariffs, NIH (National Institutes of Health) funding, and drug pricing. CFO Jim Hippel cautioned that low single-digit organic growth is expected to continue until greater clarity emerges in these areas. Management’s forward strategy focuses on reinvesting resources from divested assets into cell therapy, proteomics, and spatial biology, with Hippel emphasizing ongoing investments in product innovation and productivity initiatives to balance growth and profitability.
Key Insights from Management’s Remarks
Management’s remarks centered on shifting end-market dynamics, margin headwinds, and the strategic repositioning of the business portfolio to drive long-term resilience.
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Large pharma demand remains strong: Bio-Techne’s growth was driven by large pharmaceutical companies, particularly through increased adoption of high-throughput proteomic instruments and cell therapy solutions. Management noted that these customers are increasingly using the company’s tools not only in early research but also in quality assurance and manufacturing.
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Biotech and academia headwinds: The company faced subdued demand from smaller biotech firms due to a constrained funding environment and more cautious spending. Academic segment revenue was pressured by uncertainty in NIH funding, with management estimating total exposure to NIH-funded research in the low single digits as a percentage of total company revenue.
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Geographic performance mixed: China delivered a positive surprise with low double-digit growth, partly attributed to customers accelerating purchases ahead of anticipated tariffs and local stimulus measures. Management does not expect this pace to continue, projecting stabilization and modest growth in the region going forward.
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Product portfolio enhancement: Several new product launches—including the Leo Simple Western instrument, ProPak GMP cytokine line, and AI-enabled designer proteins—bolstered demand in the Protein Sciences segment. Management highlighted strong uptake of cell therapy workflow solutions and noted over 550 customers for GMP reagents.
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Exosome Diagnostics divestiture: The divestiture of the Exosome Diagnostics business to MDxHealth was framed as a portfolio optimization move, expected to immediately improve operating margins and allow for reinvestment in higher-growth, higher-margin core businesses. Bio-Techne retains access to proprietary exosome-based technology for future diagnostic applications.
Drivers of Future Performance
Bio-Techne’s outlook remains cautious, with management pointing to policy-driven uncertainty and subdued funding as major themes shaping near-term performance.
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Policy and funding uncertainties: Management identified ongoing uncertainty around NIH funding, U.S. pharmaceutical tariffs, and drug pricing models as persistent headwinds. CFO Jim Hippel stated that low single-digit organic growth is likely until these issues are resolved, with academic customers displaying more conservative spending behavior than underlying funding changes might justify.
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Margin expansion efforts: The company expects to achieve operating margin expansion through the divestiture of lower-margin assets and ongoing productivity initiatives. Hippel noted that the Exosome Diagnostics sale will contribute roughly 100 basis points of margin improvement in the coming year, with further gains possible as investments are redirected to core platforms.
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Strategic reinvestment: Resources from divested businesses will be focused on advancing Bio-Techne’s core growth pillars, including next-generation automated proteomic and spatial biology platforms, expanded cell therapy applications, and AI-driven protein development. Management signaled an active approach to M&A, prioritizing high-margin, high-volume product lines aligned with the company’s strategic direction.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) the resolution of U.S. policy debates surrounding NIH funding and pharmaceutical tariffs, (2) the pace of recovery in academic and biotech spending as uncertainties settle, and (3) the impact of recent product launches and the Exosome Diagnostics divestiture on margin trends. Progress in China’s market stability and execution of targeted M&A will also be important indicators of Bio-Techne’s ability to deliver on its strategic objectives.
Bio-Techne currently trades at $50.15, down from $54.61 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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