Bio-Rad Laboratories (NYSE:BIO) executives said the company finished 2025 within revised guidance for revenue and operating margin, but acknowledged that gross margin performance fell short of internal expectations, particularly in the fourth quarter, as execution-related supply chain costs weighed on results. On the company’s fourth-quarter earnings call, management highlighted actions underway to strengthen operational rigor, improve planning and forecasting, and drive greater consistency across manufacturing, procurement, and logistics.
Fourth-quarter results: Diagnostics growth offsets Life Science softness
For the fourth quarter of 2025, Bio-Rad reported net sales of approximately $693 million, up 3.9% on a reported basis versus $668 million in the prior-year period. On a currency-neutral basis, sales rose 1.7% year over year, driven by the clinical diagnostics segment.
Clinical diagnostics sales were approximately $425 million, up 8.4% reported (up 5.6% currency neutral) from $393 million a year earlier. The increase was primarily driven by higher quality control and blood typing product sales, with currency-neutral growth in all three geographic regions.
Margins pressured by fourth-quarter execution issues and portfolio actions
Bio-Rad’s fourth-quarter GAAP gross margin was 49.8%, down from 51.2% in the fourth quarter of 2024. On a non-GAAP basis, gross margin was 52.5%, compared to 53.9% a year earlier. CFO Roop Lakkaraju said the quarter included $13 million in one-time inventory and other write-offs tied to product portfolio rationalization, in addition to restructuring and amortization of purchased intangible charges.
Management also pointed to elevated costs tied to an extended U.S. government shutdown that shifted sales later into the quarter. Lakkaraju said the company “had to do 90 days of work in 30 days,” driving higher expedited freight and service costs, including overtime, due to compressed timelines for instrument delivery and installation. He added the company saw slower-than-expected progress on procurement initiatives that were backloaded in the forecast.
SG&A expense for the quarter was $221 million (31.9% of sales), compared with $204 million (30.6% of sales) in the year-ago period. Non-GAAP SG&A was $215 million versus $200 million, with the increase primarily due to higher employee-related costs. R&D expense was $70 million (10.1% of sales), down from $80 million (11.9% of sales) in the fourth quarter of 2024; non-GAAP R&D was $66 million versus $68 million.
Bio-Rad posted a GAAP operating loss of approximately $119 million, compared with operating income of approximately $58 million in the fourth quarter of 2024. The company said the GAAP operating loss included $173 million of impairment charges for purchased intangibles and other items, stemming from its decision to discontinue and reprioritize certain R&D programs as part of ongoing portfolio rationalization. On a non-GAAP basis, fourth-quarter operating margin was 12%, down from 13.8% a year earlier.
Reported net income was $720 million, or $26.65 per diluted share, which management said was driven by an $800 million contribution from changes in the fair market value of equity security holdings and a loan receivable primarily related to Bio-Rad’s ownership of Sartorius AG shares. Non-GAAP net income, excluding the Sartorius-related equity value changes, was $68 million, or $2.51 per diluted share, compared with $81 million, or $2.90 per diluted share, in the year-ago quarter.
Full-year 2025: Flat sales, lower margins, stronger cash flow
For full-year 2025, Bio-Rad reported net sales of $2.583 billion, up 0.7% reported versus $2.567 billion in 2024 and “essentially flat” on a currency-neutral basis. Life science revenue was approximately $1.021 billion, down 0.7% reported (down 1.3% currency neutral). Diagnostics revenue was $1.562 billion, up 1.6% reported (up 0.8% currency neutral), driven primarily by quality control and blood typing products and partially offset by lower reimbursement rates for diabetes testing in China.
Non-GAAP gross margin for the year was 53.3%, down from 55% in 2024, with the decline driven mainly by reduced fixed manufacturing absorption and higher material costs. Non-GAAP operating margin was 12.1% versus 12.9% in 2024. Non-GAAP net income was $271 million ($9.92 per diluted share), down from $291 million ($10.31 per diluted share) in 2024.
Bio-Rad generated $532 million in operating cash flow in 2025, up from $455 million in 2024, which management attributed to improved working capital efficiency. Free cash flow rose to approximately $375 million from $290 million, and the company said this represented a free cash flow to non-GAAP net income conversion ratio of 138% for 2025.
On capital allocation, Bio-Rad said it repurchased 1.2 million shares during 2025 for approximately $296 million and did not repurchase shares in the fourth quarter. Since the first quarter of 2024, the company said it has spent $494 million to repurchase 1.9 million shares at an average price of about $261, reducing share count by 6.6%. Cash and short-term investments ended the year at $1.541 billion, down from $1.665 billion at the end of 2024.
Business trends: ddPCR momentum, process chromatography volatility, and diagnostics mix
Management emphasized early traction from the Stilla acquisition and the launch of the QX700 droplet digital PCR (ddPCR) family, citing “meaningful acceleration” in QX700 instrument sales in the fourth quarter and an expanding order funnel entering 2026. Bio-Rad said adoption has been driven by both qPCR conversions and competitive wins.
In response to analyst questions, COO Jon DiVincenzo said fourth-quarter ddPCR growth was “dominated by the QX700,” and that the revenue mix shifted compared with softer periods, moving to about two-thirds assays and roughly one-third instruments. He said the large installed base means consumables and assays remain the biggest part of the ddPCR portfolio and a key reason the company is guiding mid-single-digit growth for ddPCR in 2026.
Bio-Rad’s process chromatography business grew over 20% in 2025, but Lakkaraju said it declined in the fourth quarter due to the timing of customer orders. Looking ahead, the company projected process chromatography revenue to decline by approximately the mid-teens in 2026, reflecting changes to government regulations on certain therapeutics, usage and vaccines, as well as customers’ improved production efficiencies. DiVincenzo said demand changes for a “family of vaccines” altered customer manufacturing strategy and drove the 2026 planning impact. Management characterized the business as currently concentrated among a select number of commercial therapeutics and vaccines, contributing to quarter-to-quarter lumpiness, and said it expects volatility to lessen as the portfolio broadens.
On diagnostics, Bio-Rad said the segment returned to growth in the quarter, helped by fulfillment of large quality control orders planned for the fourth quarter and the annualization of a diabetes testing reimbursement change in China. DiVincenzo added that while the company is not currently seeing portfolio-specific reimbursement or volume-based procurement (VBP) headwinds in China, management remains cautious and continues to monitor policy developments. In discussing the 2026 diagnostics growth outlook of 1% to 2% currency neutral, DiVincenzo cited the strength of quality controls alongside other platforms and geographies that are not as strong, including areas that rely on China.
2026 outlook: Modest growth and margin improvement targets
Bio-Rad guided to full-year 2026 currency-neutral revenue growth of 0.5% to 1.5%, with the first quarter expected to be down low single digits year over year and sequential improvement expected in each subsequent quarter. Segment expectations include:
- Life science: 0% to 0.5% currency-neutral growth; nearly 4% growth for core life science excluding process chromatography; ddPCR expected to grow mid-single digits; process chromatography projected to decline approximately mid-teens.
- Diagnostics: 1% to 2% currency-neutral growth; quality controls expected to grow mid-single digits; remaining diagnostics portfolio expected to grow in the low single digits.
For profitability, Bio-Rad projected non-GAAP gross margin of 54% to 54.5% for 2026 and said first-quarter gross margin should step up about 100 basis points from the fourth quarter of 2025 as elevated freight and service costs do not recur, partially offset by lower first-quarter revenues. Non-GAAP operating margin is expected to be 12% to 12.5%, with management noting a roughly 50 basis point headwind from reduced process chromatography sales. The company also guided to a non-GAAP tax rate of approximately 23% and free cash flow of about $375 million to $395 million.
CEO Norman Schwartz said Bio-Rad is seeing early signs of stabilization in core markets, citing NIH and related funding “set,” steady improvements in biopharma funding, and stronger demand for quality control reagents in diagnostics. He added that the company intends to continue investing in innovation across its portfolio and is “looking for additional assets” to help accelerate top-line growth and margin expansion, while emphasizing ongoing efforts around operational rigor, simplification, and prioritization. The company also said it is deferring its investor day to a later date as it continues its business transformation and product portfolio assessment.
About Bio-Rad Laboratories (NYSE:BIO)
Bio-Rad Laboratories, Inc is a global provider of life science research and clinical diagnostic products. The company operates through two primary business segments: Life Science and Clinical Diagnostics. Within the Life Science segment, Bio-Rad offers instruments, reagents and consumables for protein analysis, cell biology, gene expression and other molecular biology applications. The Clinical Diagnostics segment supplies quality control products, blood-typing reagents and instruments, and molecular diagnostic assays used in blood screening, infectious disease testing and routine clinical laboratories.
Founded in 1952 by David and Alice Schwartz and headquartered in Hercules, California, Bio-Rad has grown its footprint across the Americas, Europe, Asia-Pacific and other regions.
