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Operator: Ladies and gentlemen, thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to Bio-Rad’s First Quarter 2026 Results Conference Call and Webcast. [Operator Instructions] I would now like to turn the conference over to Ruben Argueta, Bio-Rad’s Head of Investor Relations. You may begin.

Ruben Argueta: Thank you, Regina. Good afternoon, everyone, and thank you for joining us. My name is Ruben Argueta, Bio-Rad’s new Head of IR. It’s a pleasure to join the team and be with you here. Today, we will review the financial results for the first quarter ended March 31, 2026, and provide an update on key business trends for Bio-Rad. With me on the call today are Norman Schwartz, our Chief Executive Officer; Jonathan DiVincenzo, President and Chief Operating Officer; and Roop Lakkaraju, Executive Vice President and Chief Financial Officer. Before we begin our review, I would like to remind everyone that we will be making forward-looking statements about management’s goals, plans and expectations, our future financial performance and other matters.

These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Our actual results may differ materially from these plans, goals and expectations. You should not place undue reliance on these forward-looking statements, and I encourage you to review our filings with the SEC, where we discuss in detail the risk factors in our business. The company does not intend to update any forward-looking statements made during the call today. Finally, our remarks today will include references to non-GAAP financials, including net income and diluted earnings per share, which are financial measures that are not defined generally — under generally accepted accounting principles. In addition to excluding certain atypical and nonrecurring items, our non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG in order to provide investors with a better understanding of Bio-Rad’s underlying operational performance.

Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release. We have also posted a supplemental earnings presentation in the Investor Relations section of our website for your reference. With that, I will now turn the call over to our Chief Operating Officer, John DeVicezo.

Jonathan DiVincenzo: Thanks, Ruben, and welcome to the team. Good to have you here, and good afternoon, everyone. Thank you for joining us. In the first quarter, our teams executed within a dynamic operating environment. We reported Q1 results within our revenue guidance as we navigated several external pressures, most notably associated with the ongoing conflict in the Middle East. This region has been one of Bio-Rad’s fastest-growing markets for several years. We haven’t highlighted this in the past, but in 2025, the region represented over 9% of our Diagnostics segment, primarily driven by our blood typing franchise. The conflict substantially reduced our first quarter 2026 revenues and depending upon the timing of resolution, will be a significant headwind for revenue and margin for full year 2026.

Despite the macroeconomic headwinds, our teams remained focused on executing our strategic initiatives, accelerating innovation and driving further efficiencies across the organization to increase competitiveness. In Life Science, reported net sales were flat, reflecting mixed end market conditions. Academic demand remained constrained, particularly in the Americas, where our customers’ budgets have been significantly impacted by changes in funding. While NIH funding increased modestly year-over-year, our voice of customer pulse surveys indicate that behind the scenes, there continues to be considerable disruption, and we continue to see a lag between funding approvals and purchasing activity. In biopharma, we are seeing early signs of stabilization.

Early-stage biotech remains cautious. However, activity among later-stage companies is more robust, and we expect gradual improvement through the year. On the commercial side, ensuring that we capture our fair share of demand in a constrained market requires our sales organization to work differently. We have sharpened the focus of our commercial teams on segment level prioritization, directing coverage towards customers with active funding, accelerating conversions from our existing installed base and competing aggressively where competitive displacement opportunities exist. Our digital PCR product area continues to be a strategic differentiator. In the quarter, ddPCR instrument revenue grew 24% over prior year. This is an encouraging leading indicator since new customers typically drive consumable pull-through within 6 to 12 months of purchase and installation.

The new QX700 platform is driving both competitive wins and conversion from qPCR, supported by an extensive assay menu and expanding publication base. And ahead of schedule, the team now has enabled over 99% of our digital PCR assays to be available on the new QX700 series, which is driving instrument growth. Looking ahead, we continue to expect a measured recovery in Life Science led by biopharma. In Clinical Diagnostics, we delivered modest reported growth of just under 2%. As I mentioned earlier, performance in the culture — quarter was impacted by geopolitical disruption in the Middle East, which affected both demand and logistics. While this creates near-term challenges, we expect eventual market normalization once the conflict is resolved.

Outside of this region, the segment performed as planned. In particular, demand for our quality systems and immunohematology franchises showed signs of strength. From a margin standpoint, Diagnostics was adversely affected by a disproportionate share of supply chain cost pressures. And in light of these continuing supply chain challenges, we understand the need to rationalize manufacturing capacity and network. We are also addressing these challenges through focused actions in procurement and manufacturing. Turning to our operational priorities. We are executing against a clear agenda focused on improving agility, resiliency and efficiency across the company. In our efforts to become more agile, we are increasing flexibility in our manufacturing footprint.

During the quarter, we began manufacture of select life science instruments in China for China, improving responsiveness to local market demand and allowing us to feed in tenders while minimizing tariff exposure. This initiative is indicative of how we are using efficient capital deployment to build operational capabilities for long-term business continuity. In R&D, we have reengineered our innovation engine to deliver improved return on investment. Following our portfolio prioritization decisions, we are concentrating investment in areas with the strongest commercial potential. As I mentioned earlier, one example of this prioritization is the fact that 99% of our digital assays are now supported on the new QX700 platform, again, ahead of plan.

As we prioritize our projects, we — our focus areas are expanding into high-growth clinical applications, leveraging our ddPCR technology, advancing our digital PCR portfolio, including our next-gen system and oncology assays and embedding AI capabilities to accelerate development and enhance platform performance. While it is early, this focus allows us to deliver more consistent, higher-quality growth over time. So in closing, we are executing with discipline in a challenging environment. We are making progress on the operational actions within our control, improving supply chain capability, strengthening execution and focusing investment where it matters most. We remain confident these actions will translate into improved financial performance over time.

And with that, I’ll turn the call over to Roop.

Roop Lakkaraju: Thank you, John, and good afternoon. I’d like to start with a review of the first quarter 2026 results. Net sales for the first quarter of 2026 were approximately $592 million, which represents a 1.1% increase on a reported basis versus $585 million in Q1 of 2025. On a currency-neutral basis, this represents a 4.2% year-over-year decrease and was driven by lower sales in both Life Science and Clinical Diagnostics segments. Sales of the Life Science segment in the first quarter of 2026 were $229 million, essentially flat compared to Q1 of 2025 on a reported basis and a 4.3% decrease on a currency-neutral basis, primarily driven by ongoing challenges in the academic research market, particularly in the Americas.

Currency-neutral sales decreased in the Americas and EMEA, partially offset by increased sales in Asia Pacific. Our ddPCR portfolio was essentially flat in Q1 due to softer biopharma consumables as customers shift their R&D priorities despite the instrument growth. The year-over-year instrument growth that John noted, we believe is a strong indicator of our market share gains, especially considering the current market conditions. Finally, the Stilla acquisition is on track to be accretive by midyear. More importantly, the QX700 is contributing to both revenue growth and margin expansion. Life Science ex process chromatography revenue increased 1% year-over-year and decreased 3.1% on a currency-neutral basis. Consumables revenue in academic and biopharma research was down 3.9%, reflecting the challenging academic research funding environment.

Our process chromatography business, as expected, experienced a year-over-year currency-neutral decline of 13%. Sales of the Clinical Diagnostics segment in the first quarter of 2026 were approximately $364 million compared to $357 million in Q1 of 2025, an increase of 1.9% on a reported basis, a decrease of 4.1% on a currency-neutral basis, primarily driven by revenue declines from our EMEA region as a result of the regional conflicts in the Middle East. The regional conflict affected demand and execution of logistics for our diagnostics products, resulting in an $11 million impact to the business in the quarter. As a result of the ongoing challenges within the Middle East, this will have a continued effect on our business for the remainder of 2026.

Consolidated gross margin was 52.3% for both the first quarter of 2026 and 2025. On a non-GAAP basis, first quarter gross margin was 53.1% versus 53.8% in the year ago period. The lower Q1 gross margin was due to several factors, including unfavorable manufacturing absorption as a result of the decreased Middle East revenue, which contributed to margin pressure by 40 basis points, higher instruments versus consumables mix, which adversely affected margin by 30 basis points, higher freight fuel surcharges by 20 basis points and FX by 20 basis points. SG&A expense for the first quarter of 2026 was $212 million or 35.9% of sales compared to $209 million or 35.7% in Q1 of 2025. First quarter non-GAAP SG&A spend was $211 million versus $192 million in the year ago period.

The increase in SG&A expense was primarily due to foreign exchange impacting — impact resulting from a weaker U.S. dollar on our international cost base, partially offset by lower restructuring costs. Research and development expense in the first quarter of 2026 was $63 million or 10.6% of sales compared to $74 million or 12.6% of sales in Q1 of 2025. First quarter non-GAAP R&D spend was $65 million versus $60 million in the year ago period. Q1 operating income was approximately $34 million compared to operating income of approximately $24 million in Q1 of 2025. On a non-GAAP basis, first quarter operating margin was 6.6% compared to 10.8% in Q1 of 2025, reflecting the lower gross margin year-over-year. The change in fair market value of equity security holdings and loan receivable primarily related to the ownership of Sartorius AG shares contributed $562 million to our reported net loss of $527 million or $19.55 per diluted share.

Non-GAAP net income, which excludes the impact of the change in equity value of the Sartorius shares was $51 million or $1.89 diluted earnings per share for the first quarter of 2026 versus $71 million or $2.54 diluted earnings per share for Q1 of 2025. Moving on to the balance sheet and cash flow. Total cash and short-term investments at the end of Q1 were $1.565 billion compared to $1.541 billion at the end of 2025. Inventory at the end of Q1 was $771 million, up from $741 million at the end of 2025. For the first quarter of 2026, net cash generated from operating activities was $108 million compared to $130 million for Q1 2025. Net capital expenditures for the first quarter of 2026 were approximately $30 million. Depreciation and amortization for the first quarter was $41 million.

Free cash flow for the first quarter was $78 million, which compares to $96 million in Q1 of 2025 and represents a free cash flow to non-GAAP net income conversion ratio of 153% for the first quarter of 2026. During the first quarter of 2026, we repurchased 176,000 shares through our buyback program at a total cost of approximately $48 million. Since Q1 of 2024, we’ve spent $542 million to repurchase 2.1 million shares at an average price per share of approximately $261. Moving on to our non-GAAP guidance for 2026. We have decided to adjust our 2026 guidance. As John mentioned in his comments, the Middle East, which represented the fastest-growing region for us over the past few years, was again expected to contribute growth in 2026. As a result of the ongoing conflict in the region, we are seeing continued demand softness, challenges getting product to our channel partners and into end customers.

Once the conflict resolves, we believe that infrastructure rebuild will be prioritized. And ultimately, when the region is stable, the Middle East will return to a double-digit growth area for us. Our updated guidance is currency-neutral revenue growth for the full year to be between minus 3% and plus 0.5%. The Life Science segment year-over-year currency-neutral revenue growth is expected to be between minus 3% and minus 1% due to continued challenges in academic funding with an adverse impact from the Middle East conflict in the high single-digit millions. We are still modeling a modest biopharma recovery. For the Diagnostics segment, we estimate currency-neutral revenue growth to be between minus 3% and plus 1%. We project mid-single-digit growth for our quality controls business.

We are assuming that the remaining Diagnostics portfolio ex quality controls is expected to decline between negative mid- to low single digit. Full year non-GAAP gross margin is projected to be between 53% and 54% due to the lower revenue, which is reducing our fixed cost absorption and higher freight rates. Full year non-GAAP operating margin is projected to be between 10% and 12%. We estimate the non-GAAP full year tax rate to be approximately 22%. As a result of the lower revenue and operating profit, we’ve updated our 2026 full year free cash flow estimate to be in the range of approximately $290 million to $340 million. Regarding share repurchases, we will continue to be opportunistic. And as of March 31, we have approximately $237 million available for additional buybacks under the current Board authorized program.

I’ll now turn the call over to Norman.

Norman Schwartz: Great. Thank you, Roop. As you’ve heard from John and Roop, we are operating in a challenged and challenging environment. However, underlying the market noise, I think we continue to make progress on many fronts. In the last 24 months, for example, we’ve strengthened our management team and how we operate as a company. To me, this is a team with deep operational experience. And I think it is reflected in the rigor, the discipline and consistency in current decision-making and in implementation. We see that in our portfolio decisions where we’re focusing investment and making the choices necessary to bring quality products to market more quickly and to improve returns. We see that in our operating model, building capabilities like our In China, For China initiative to improve responsiveness to local demand and allowing us to participate in local tenders in a cost-effective manner.

And you see it in our M&A with a focus on disciplined strategic opportunities where we can create value for our customers, the company and shareholders. So we do see M&A as a key lever for us in our longer-term strategy to accelerate top line growth and margin expansion. And I would say here, our focus has shifted from early-stage opportunities to companies with demonstrated revenue and margin profiles, businesses where we can leverage our capabilities and scale to accelerate growth in attractive markets. I think here still is a good example of this approach, strengthening a core platform with a scalable, commercially proven business. In terms of size, today, our target acquisition is companies within the $100 million to $500 million revenue range with complementarity to our current business.

We’re not, at the moment, focused on anything transformative. In short, I think we see our strategy as disciplined, targeted and accretive. And finally, we always get the question on Sartorius. And so I thought maybe I’d just take a moment to reiterate our position. Fundamentally, we continue to be thoughtful, disciplined stewards of the asset. The Sartorius position is monetizable and provides us with optionality, which we evaluate with the same rigor we apply to every capital decision we make. That said, our focus is really running, growing and positioning Bio-Rad for market leadership and maximizing long-term shareholder value. And every capital allocation decision, including Sartorius, comes from that vantage point. Overall, if I think about where we are today, our end markets in Life Science and Diagnostics, although challenged in the near term, are durable and resilient.

And I think we’re well positioned as a market leader in a number of segments. In the meantime, we continue building on the operational discipline required to deliver consistent revenue growth and mid-teens operating margin in the near term. So that’s all from me. Operator, now I think we’ll open up the line for questions.

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Operator: Our first question will come from the line of Jack Meehan with Nephron Research.

Jack Meehan: I wanted to start just to get a little bit more color on the Middle East. This has come up on a few of the earnings that have been reported so far, but it seems like the impact was a little bit more prominent for Bio-Rad. I was wondering if you could just share like why that might be the case either in terms of the exposure to the region or how that might have impacted your logistics? Just color on like exactly how it played out would be helpful.

Jonathan DiVincenzo: Yes, Jack, it’s John. Thanks for joining us. As we said on the call, the fact that it’s been a fast-growing region for us, we’ve been very successful in our Diagnostics business, winning a number of tenders across the countries in the region in the last number of years. It gets to a scale where it’s 9% of the Diagnostics business, mid-single digit for the company and whole. So I think the exposure we had maybe a little different than some of our peers based on our strength and our wins there. And just as things kind of emerged, the channel kind of certainly slowed down. I mean we obviously still had revenue there, but we did not meet the revenue numbers that we had. We expected solid high double-digit growth in that region.

So it was just kind of a bit of a break there for us. And I think as we project forward, it’d be great if the conflict was resolved here soon, but it will take some time for the region to recover, and that was kind of the thinking behind the new guide that we’ve expressed.

Jack Meehan: Got it. And yes, obviously, unfortunate situation. I did hear kind of reiterated kind of the ambition to get up to the mid-teens operating margins in the near term. Can you just talk about like the cost actions that you’re planning to take to kind of draw a line under earnings and get — obviously, there’s things that are out of your control, but what can you do to protect and grow earnings in this environment?

Roop Lakkaraju: Yes. Jack, I appreciate it. This is Roop. I’ll maybe start on that question. I think there’s a number of things that we have under evaluation. We’ve already begun to tamp down discretionary spend and these sort of things. But I think more broadly, if this sort of impact continues, then obviously, it’s going to be a more meaningful impact, which is reflected in our guide and therefore, more significant actions. I think the other piece of this that Norman mentioned about reaching that mid-teens. Part of what we’re evaluating is just overall, considering the continued challenges that seem to be arising, whether that’s tariffs last year and now Middle East conflict, which arguably can’t be predicted to this magnitude.

There are some structural things that maybe we need to be thinking about and how we run the business. And so those are the types of things we’re looking at without getting into too many specifics at this time, which I think is a little bit early. But it’s kind of all functional areas in how we operate and how we execute, so we can be more efficient and effective and being more nimble in this environment.

Jack Meehan: Got it. And maybe one final one is unrelated, but just on the China diagnostics business, there was an update during the quarter from the NHSA around not VBP, but new strategies around cost containment. Any color on how you see that playing out? Any updates on the region there?

Roop Lakkaraju: Yes. Maybe I’ll start again. And to date, we’re not seeing anything impacting us in terms of what our folks on the ground are seeing from China. Obviously, it’s something we’ll continue to monitor and evaluate, but nothing currently that we’re anticipating.

Operator: Our next question will come from the line of Brandon Couillard with Wells Fargo.

Brandon Couillard: It’d be helpful if you could just maybe share any color on 2Q, 3Q revenue phasing. You do lap a tougher comp in the second quarter. And are you kind of assuming that a fairly normal sequential seasonality for the business off of the 1Q base from here?

Roop Lakkaraju: Yes. I appreciate the question, Brandon. So let me talk about the phasing from a Q1 to Q2. Obviously, Q1 is typically our low quarter. That will be the case here in 2026. From a phasing standpoint, we see about a 5% lift from Q1 to Q2, and then it lifts a little bit from there just slightly into Q3, which has not been the case. Q2, Q3 has been relatively flat in the last couple of years that I’ve been here. And then Q4 is expected to jump up again from that Q4 tending to be our seasonally strongest quarter. In terms of the drivers of those, obviously, the Middle East, we pulled out specific revenue or most of the revenue associated with certain countries that are affected directly by the conflict. Obviously, Middle East is more broad than that in terms of additional countries that we’ve left unaffected.

The other piece of it, though, more specifically to the Q2, Q3, Q4 increase in revenue over time, it’s through other areas of our business and other regions. So specifically quality controls based on batch releases are going to be strong in Q3 and Q4 this coming year. Our blood typing business in other regions has some uptick in Q3 and Q4. So there are some very specific drivers that allow us to get to that kind of phased increase of revenue as we get through the year based on other parts of our business.

Brandon Couillard: Okay. That’s really helpful. One on the ddPCR business. So if I’m doing my math right, were consumables down something like low double digits in the quarter? It wasn’t really clear what was driving that. And last quarter, you talked about the QX700 maybe driving some share gain versus your main competitor there. And for qPCR, has there been any acceleration in the cannibalization of qPCR because your main competitor still seems to be growing pretty nicely in that market?

Jonathan DiVincenzo: Yes. So Brandon, it’s John. We are pretty pleased with the kind of the results of the instrument sales, both for QX700, but also for our legacy 200 systems — QX200 systems as well. So — the consumables, which is the majority of overall the business was soft in the quarter, a combination of academic and even some on the biopharma side. So to answer your question, that’s just a matter of what projects are going forward and when. We did have pretty strong growth in the first half of last year in consumables and probably just absorbing some of that growth this year. But the equation here is growing our installed base. And we feel like we’re growing our installed base, both by taking share within qPCR as well as competitively holding our own as we look at our win-loss analysis, et cetera.

So I think if anything, it is the healthiest we’ve been in our ddPCR portfolio in quite some time, both because of the portfolio itself and the breadth of the offering that we have as well as the increase in both the assays that we’re developing and the number of publications, which seems to be on an accelerating trajectory. So we feel really strong that we’re certainly holding our own. And in many cases, we are taking share from qPCR. And competitively, I think our team feels pretty good, and our pipeline is larger today than it’s been since I’ve been here.

Roop Lakkaraju: I’ll just add one additional piece, Brandon, to your specific question on the change, and you’re spot on in terms of low double digits.

Brandon Couillard: Okay. Great. And last one for Norman. You guys did help but notice, I felt like your comments around M&A priorities there towards the end of your prepared remarks, a little bit more detail than I think you’ve kind of shared in the past. Should we interpret that is an indication that the pipeline is full and maybe there’s something more actionable over the relative near term?

Norman Schwartz: No, I think for me, it’s just explaining that part of the strategy. I think that the focus is on continuing to develop the business, growing the organic business. And this is another piece of the puzzle, which is M&A. So it’s just diving a little bit in on a piece of the strategy.

Operator: Our next question comes from the line of Tycho Peterson with Jefferies.

Tycho Peterson: Maybe just starting on R&D. You are spending 12%, which is relatively high versus peers. Can you maybe just help us think about — you’ve talked about bringing products to market faster, getting better ROI on those dollars. Just talk a little bit about what we can expect from that? Any metrics you can put around that? And is R&D a source of leverage over time as well for you guys?

Jonathan DiVincenzo: Certainly is. And if anything, it’s kind of a foundational growth opportunity for us. And whether it was through COVID or some pretty large bets we were making in diagnostics side, we’ve reset the bar on the projects that we’re working on. We’ve kind of redirected some of our resources. But maybe more importantly, Tycho, a disciplined approach to the life cycle of our existing portfolio, looking at ways to really make an impact, as I said, applying AI into some of the imaging and other platforms we have and a couple of bets that are kind of new to the world bets. And I think it’s just a comprehensive management and governance of that investment. As you said, it’s a pretty high investment. If anything, we have even more in life sciences rather than diagnostics compared to some of our peers, and we need a better return.

And I think over time, maybe we’ve become more efficient and we’re not investing at that level. But today, it’s kind of all hands on deck to get a very, very robust innovation pipeline going and to really see the fruits of that labor.

Tycho Peterson: Okay. Follow-up on 2Q, Roop, I’m hoping you can kind of clarify. I think there’s been a little bit of confusion. Are you seeing kind of down mid-single-digit core? Is that what you’re implying here given the sequential comments you made?

Roop Lakkaraju: I apologize. I missed the first part in what area?

Tycho Peterson: I am asking for clarification on your 2Q comments. I think people are getting to kind of down 5%, down 6% organic. Is that the right number?

Roop Lakkaraju: Yes, that’s not an unreasonable number. We’re going to see and revenue will pick up a little bit. Gross margin, we’ll see that tick down just a tad in Q2. And quite honestly, it’s specific to freight because we had effectively 1 month of freight due to the Middle East conflict. Now we’ve got 3 months of freight. We’ve got mitigating actions that we’re working through, but not sure that they’re going to have the level of impact starting in Q2. It will have some. But in Q3, Q4, we’ll see a bit more of that. But Q2 is a revenue increase, slight dip in gross margin and then that flows through.

Tycho Peterson: Okay. And then I guess just on the actions, how much of this is a wait and see on the backdrop here if things get better? I mean, overall, you’re back to 2018 levels on operating margins. Can you maybe just talk about your commitment to actually driving those higher? And how much of this is timing related watching the backdrop here in the near term?

Roop Lakkaraju: Maybe I’ll start, and I’ll have Norman jump in. I’ll just speak to — obviously, there’s near-term actions that we’re taking. As Norman talked about more broadly, and I’ll turn it over to him. I think we are factoring the Middle East conflict to be transitory, not permanent. I think it’s hard to predict exactly when that ends. And so we wanted to give that color from that standpoint, knowing that we then need to evaluate the broader business.

Norman Schwartz: Yes. So I think that certainly, we are — we’ve been working on making the business more agile in these kinds of environments. And I think that’s — our focus really is we can’t control the — kind of what’s going on in these environments that we just have to kind of work on what we can control, which is improving our kind of operations and our capabilities. And when the markets return, I think we’ll be in very good shape.

Roop Lakkaraju: And maybe the last thing to add, the fact that Norman was explicit in that manner, you can be assured that it’s a focus for us in terms of driving that operating margin expansion in the near term, as he said.

Operator: Our next question comes from the line of Patrick Donnelly with Citi.

Patrick Donnelly: Maybe more on the process chrom business. Can you just talk about performance and visibility there? We’ve heard some noise from some of that more concentrated vaccine exposure, some customers lowering ordering patterns down the line. Are you seeing any changes in process chrom? What’s the right way to think about the pacing of that as we go through this year and the recovery path?

Roop Lakkaraju: Yes. So Patrick, from a process chrom standpoint, it’s actually played out. Q1 played out as expected. We are mindful of kind of staying close to our customers as part of understanding order patterns, demand patterns, these sort of things. We’re not necessarily seeing any change in inflection for the rest of the year at this point in time. But that is something that we’re keeping a pulse on, if you will. And I think in the last call, Norman kind of mentioned — yes, go ahead, John.

Jonathan DiVincenzo: Sorry, just the fact that certainly, there is a little bit of concentration today in our revenues. However, we have several hundred projects we’re working on from early-stage clinical trials to later stage and preparing for commercialization. So we’re projecting forward how do we bring a little more stability by broadening out the revenue sources across. And some of that is with existing customers that have been successful and they have new molecules coming to market and now there are new customers. But there’s quite a bit of transparency in where we’re building out process method development and participating in molecules that could be pretty exciting in the future. But time will tell. These are things that don’t happen in weeks, months or quarters over a period of years, but we feel good that we’re bringing some balance and spreading, if you will, out the revenues to various molecules that come to market.

Patrick Donnelly: Yes. That’s helpful. And then I think it was last quarter, Norman had mentioned the path back to mid-single-digit growth for process chrom maybe next year is still a little subdued in the low single. Is that still the right way to think about it? Just any updated thoughts on the path to recovery there?

Roop Lakkaraju: Patrick, really apologize. You’re a bit muffled. So would you mind repeating that?

Patrick Donnelly: Yes, sure. It was just on the path back to recovery of process chrom. I think last quarter, Norman mentioned maybe it’s a low single-digit number next year on the path back to mid-single. Is that still the right way to think about it and just the visibility you guys have?

Roop Lakkaraju: I think that’s still the right answer. Yes.

Patrick Donnelly: Okay. Great. And last one on the PCR, digital PCR side in particular. Are you seeing any changes competitively in the market? Just an updated thoughts on growth outlook for that business would be helpful.

Jonathan DiVincenzo: I think as I mentioned earlier, Patrick, we feel really confident. Our commercial team is working quite strongly with our marketing teams. We have a number of new assays that are being built out to our portfolio as we transition to this broader portfolio. I think that the teams have — they’re in a position today where they feel like they have a broad set of solutions, the right solution for the right customers and customers are, I think, receiving the new portfolio very well. So we still have more R&D projects to work on to expand what we have today. And I think that compared to a year ago, we are in a much better position maybe than we were starting 2025.

Operator: Our next question will come from the line of Dan Leonard with RBC.

Daniel Leonard: I have a follow-up question on the guidance, and I think this — it touches a thread that we’ve been speaking to earlier in the call. But the reduction in the margin forecast suggests that the decremental margins on lower revenue are pretty severe. So can you clarify whether there’s any offsetting actions you’re taking today? Or are any potential offsets something we should stay tuned for in the future?

Roop Lakkaraju: Dan, great to have you on the call and chat with us. So we’ve got near-term actions that we are in process of having put in place and evaluating further. I think in terms of broader evaluation of things, stay tuned for that as we continue to work through the different aspects.

Jonathan DiVincenzo: Yes. I think there are things like increased fuel costs and logistics costs, which we’ve absorbed at this point in time, which you really see the impact. And we have to decide whether there are appropriate surcharges or ways to mitigate some of the additional costs we have. So it’s a pretty comprehensive board that we have of things we can do to improve our margins in light of the conflict and overall challenges.

Daniel Leonard: Okay. That’s helpful. And then my follow-up question. Can you elaborate a bit more on your assumptions for the biopharma end market? It sounded like you were more optimistic in that market.

Jonathan DiVincenzo: Yes. Again, we think of biopharma kind of in 3 different segments. Obviously, the large pharmaceutical, biopharmaceutical companies that are, I think, in pretty good shape and our portfolio looks good there. When you get to the smaller biotechs, but they have molecules in Phase III clinical trials, they’re doing pretty well. There’s still some softness in the early-stage biotechs. I think as we tried to elucidate in our comments that there’s still some concern there that even though they may or may not be funded, they’re still quite conservative in their spending. So it’s — across that spectrum, there’s good strength and other areas where it’s softer than we’d like it to be.

Operator: And there are no further questions at this time. I will now turn the call back over to Ruben Argueta any closing comments.

Ruben Argueta: Thank you for joining today’s call. As always, we appreciate your interest and look forward to connecting with you soon. Thank you.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

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