TECH Q4 Deep Dive: Margin Expansion and Flat Revenue Amid Mixed End Markets

Life sciences company Bio-Techne (NASDAQ:TECH) reported Q4 CY2025 results beating Wall Street’s revenue expectations, but sales were flat year on year at $295.9 million. Its non-GAAP profit of $0.46 per share was 5.8% above analysts’ consensus estimates.

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

StockStory’s Take

Bio-Techne’s fourth quarter was defined by flat revenue performance, yet the company exceeded Wall Street’s expectations on both top and bottom lines, prompting a positive market response. Management attributed this to continued strength from large pharmaceutical customers and sequential improvement in most product categories, offset by temporary headwinds in cell therapy orders due to recent FDA Fast Track designations. CEO Kim Kelderman highlighted that core reagents, proteomic analysis instruments, and diagnostic kits all showed modest sequential growth, while the company’s profitability benefited from disciplined productivity and cost management initiatives. Notably, operating margins expanded year over year, reflecting the company’s ongoing focus on efficiency.

Looking forward, Bio-Techne’s outlook is tied to stabilization in biotech and academic end markets, ongoing growth in Asia, and the gradual easing of cell therapy order timing headwinds. Management noted improved funding trends for biotech and constructive developments for U.S. academic research, which are expected to support revenue growth as the year progresses. CFO James Hippel stated, “We expect underlying growth for the remainder of our business to be mid-single digits,” and indicated that margin improvement would continue as product mix normalizes and customer sentiment recovers. The company remains committed to investing in strategic growth areas such as cell therapy, proteomic analysis, spatial biology, and precision diagnostics.

Key Insights from Management’s Remarks

Management attributed Q4 performance to strong execution in core product areas and resilience in large pharma, balanced against ongoing softness in biotech and academic markets and a temporary slowdown in cell therapy orders.

• Large pharma customer resilience: Revenue from large pharmaceutical customers increased by low double digits for the fourth consecutive quarter, providing a stable foundation amid weaker biotech and academic markets.
• Cell therapy headwinds: Two major cell therapy customers receiving FDA Fast Track designations led to a significant, but temporary, decline in related reagent orders, reducing cell therapy revenue by over 30%. Excluding these customers, cell therapy grew nearly 30%, highlighting underlying demand.
• Asia-Pacific growth acceleration: Bio-Techne achieved its third consecutive quarter of growth in China, supported by increased R&D spending from contract development and manufacturing organizations (CDMOs) and biotech clients. The broader Asia-Pacific region saw growth close to 20%.
• Product innovation and launches: The company introduced new ultra-sensitive assays for the Ella platform, enhancing detection capabilities for low-abundance biomarkers, and expanded the Simple Western system with fluorescence detection, broadening its applications in proteomics.
• Diagnostics and spatial biology momentum: The diagnostics business delivered high single-digit growth, while spatial biology’s Comet instrument saw nearly 40% growth in bookings. Adoption of spatial biology tools is increasing, particularly for oncology and neurology research.

Drivers of Future Performance

Bio-Techne’s future outlook hinges on recovering biotech and academic funding, normalization of cell therapy order patterns, and continued expansion of its strategic growth verticals.

• End market stabilization: Management expects improved biotech funding and supportive U.S. academic research budgets to gradually lift demand across its core and growth segments, contributing to mid-single-digit underlying growth as the year progresses.
• Cell therapy normalization: The temporary headwind from reduced orders by two major cell therapy customers is anticipated to ease over the next quarters, with cell therapy growth resuming as these headwinds abate and broader customer demand continues to rise.
• Margin recovery and mix improvement: CFO James Hippel outlined expectations for gross margin improvement in the back half of the year, driven by a more favorable product mix—particularly as higher-margin reagents and diagnostics increase their share of revenue alongside ongoing cost management.

Catalysts in Upcoming Quarters

In the coming quarters, our team will watch (1) the pace of recovery in biotech and academic research spending, (2) the return of normalized cell therapy reagent demand as the temporary order headwinds subside, and (3) continued momentum in the Asia-Pacific region, especially China. Positive developments in product adoption, margin expansion, and clarity on M&A activity will also be key milestones for tracking execution.

Bio-Techne currently trades at $68.69, up from $64.63 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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