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The call highlighted strong execution in high-value growth vectors (Spatial Biology/COMET, GMP proteins excl. timing impacts, Proteomic Analysis instruments, large pharma strength and four consecutive quarters of China growth), solid sequential margin improvement and robust cash generation. Offsetting these positives were a 2% organic revenue decline, continued weakness in emerging/early-stage biotech spending, timing headwinds from two fast-track cell therapy customers and an OEM order, and YoY mix-related margin pressure. Management expects near-term organic revenue to be roughly flat but positions the business for an inflection in fiscal 2027 as funding improvements translate to customer spending.
Bio‑Techne said it expects Q4 organic revenue to be approximately flat, with underlying growth across the rest of the portfolio running at low single digits once the company‑specific GMP/cell‑therapy timing headwind (which will moderate to ~150 basis points in Q4 and be fully lapped in FY‑2027) is excluded; management also reiterated that the prior quarter suffered a ~400‑bp timing headwind, that biotech funding has rebounded (+90% and +50% in recent fiscal Q2 and Q3) with a typical 2–3 quarter lag to spending, and that they intend to expand Q4 margins by roughly 100 basis points year‑over‑year (building on Q3 adjusted operating margin of 34.2%, a 310‑bp sequential improvement, and adjusted gross margin of 70.4%); longer term they said they would be disappointed if FY‑2027 did not deliver at least mid‑single‑digit growth as company‑specific headwinds roll off and funding translates to customer spend.
Spatial Biology delivered mid-teens growth overall with the COMET Multiomic Spatial Platform growing more than 65% in the quarter; company exited the quarter with a record COMET backlog and installed the first COMET system in China, positioning the platform for continued scaling.
GMP protein portfolio grew nearly 50% year-over-year when excluding the two fast-track cell therapy customers that created timing effects, underscoring strong demand from advancing cell therapy programs.
Proteomic Analysis instruments delivered mid-single-digit growth supported by favorable instrument placements and utilization; Ella platform showed strong adoption (3-year neurology assay portfolio CAGR of 50%) and achieved CE-IVD marking enabling clinical use in Europe.
Large pharmaceutical customers delivered their sixth consecutive quarter of double-digit growth; China achieved positive organic growth for the fourth consecutive quarter (low single-digit growth), with increasing demand from biopharma and CRO/CDMO customers focused on ADCs, cell therapy and autoimmune disorders.
Adjusted operating margin was 34.2% in Q3, representing a 310 basis point sequential improvement over fiscal Q2; adjusted gross margin improved sequentially by 190 basis points to 70.4%.
Generated $86.7 million in operating cash flow in Q3, with $9.1 million in net capital expenditures; ended the quarter with $209.8 million in cash and bank debt of $200 million, and total leverage below 1x EBITDA.
Adjusted EPS was $0.53 (down $0.03 year-over-year) while GAAP EPS improved to $0.32 from $0.14 in the prior year period, reflecting improved GAAP profitability despite some mix headwinds.
Announced strategic brand alignment consolidating 10 brands into 3 (R&D Systems, Bio-Techne Spatial Biology, Bio-Techne Diagnostics) to simplify customer engagement; investing AI internally to design novel proteins using five decades of proprietary data, and positioning Bio‑Techne as a data provider supporting AI-driven discovery.
Good morning, and welcome to the Bio-Techne Earnings Conference Call for the Third Quarter and Fiscal Year 2026. [Operator Instructions] I would now like to turn the call over to David Clair, Bio-Techne's Vice President, Investor Relations. Please go ahead.
Good morning, and thank you for joining us. On the call with me this morning are Kim Kelderman, President and Chief Executive Officer; and Jim Hippel, Chief Financial Officer of Bio-Techne. Before we begin, let me briefly cover our safe harbor statement. Some of the comments made during this conference call may be considered forward-looking statements, including beliefs and expectations about the company's future results. The company's 10-K for fiscal 2025 identifies certain factors that could cause the company's actual results to differ materially from those projected in the forward-looking statements made during this call. The company does not undertake to update any forward-looking statements because of any new information or future events or developments. The 10-K as well as the company's other SEC filings are available on the company's website within its Investor Relations section. During the call, non-GAAP financial measures may be used to provide information pertinent to ongoing business performance.
Tables reconciling these measures to most comparable GAAP measures are available in the company's press release issued earlier this morning on the Investor Relations section of our Bio-Techne Corporation website at www.bio-techne.com. Separately, in the coming weeks, we will be participating in the Bank of America an...