Bio-Techne (NASDAQ:TECH) reported second-quarter fiscal 2026 results that management said were largely in line with internal expectations, as strength from large pharmaceutical customers was offset by softness in emerging biotech and U.S. academia, along with temporary order timing headwinds tied to two large cell therapy customers.
Quarterly performance shaped by end-market mix and cell therapy timing
President and CEO Kim Kelderman said organic revenue was flat in the quarter, reflecting “continued strength from our large pharma customers” that was offset by “a soft, yet improving biotech end market” and a “soft but stable U.S. academic end market.” She also pointed to expected order timing impacts after two of Bio-Techne’s largest cell therapy customers received FDA Fast Track designations, creating a near-term pause in GMP reagent purchases.
Margins and earnings: EPS up, gross margin pressured by mix
Adjusted EPS was $0.46, up 10% year over year, including a favorable $0.04 impact from foreign exchange. GAAP EPS was $0.24, compared with $0.22 a year earlier.
Total revenue was $295.9 million, flat year over year on both a reported and organic basis. Foreign exchange provided a 2% tailwind, while businesses held for sale created a 2% headwind.
Profitability improved despite gross margin pressure. Adjusted operating margin expanded about 100 basis points year over year to 31.1%. Hipple said the margin performance reflected productivity gains and the impact of the Exosome Diagnostics divestiture, partially offset by unfavorable product and customer mix.
Adjusted gross margin was 68.5%, down from 70.5% in the prior-year period. Management attributed the decline to mix, including strength in ProteinSimple instrumentation (lower margin than reagents), spatial biology underperforming higher-margin diagnostics within the Diagnostics and Spatial Biology segment, and a quarter-specific mix shift among diagnostic OEM customers. Hipple said the company expects mix to “gradually improve” through the second half.
Segment results: Protein Sciences slightly lower organically; Diagnostics & Spatial Biology grows organically
Protein Sciences reported sales of $215.1 million, up 2% year over year. Organic revenue declined 1% (including a 3% FX benefit). Excluding the cell therapy timing impacts from the two largest customers, organic growth in the segment was 4%.
Kelderman said the cell therapy business declined over 30%, including a 50% drop in GMP reagents, due to the Fast Track-related purchasing pause. However, she emphasized that excluding those two customers, GMP reagents grew nearly 30%.
Within Protein Sciences, management cited several areas of strength:
- Proteomic analytical instrument sales grew upper single digits, supported by strength across all three major platforms despite a challenging capital environment.
- Simple Western demand remained strong for the Leo system, with new fluorescence detection enabling multiplexing workflows.
- Core reagents and assays grew low double digits, supported by stabilization in U.S. academia and biotech and ongoing strength in pharma.
Protein Sciences operating margin was 39.3%, down 190 basis points year over year, driven primarily by product mix.
Diagnostics and Spatial Biology posted Q2 sales of $81.2 million, down 4% year over year on a reported basis. Hipple said the Exosome Diagnostics divestiture reduced reported growth by 8%, while FX added 1%, resulting in 3% organic growth. Segment operating margin improved to 10.4% from 3.9% a year ago, again driven largely by the divestiture and productivity initiatives.
In spatial biology, RNAscope generated low single-digit growth, while adoption in diagnostic settings through platform partners grew more than 20% for both the quarter and the first half, according to Kelderman. COMET bookings grew nearly 40%, marking the second consecutive quarter of strong booking activity. Diagnostics grew high single digits, with management pointing to strength in clinical controls and molecular diagnostic kits, including increased interest in an ESR1 exosome-based mutation kit and the AmplideX Carrier Screening Plus kit.
Geographic and end-market trends: China and broader APAC strength
By geography, Kelderman said China grew mid-single digits for a third consecutive quarter, and the broader APAC region posted growth approaching 20%. Hipple added that APAC excluding China grew almost 20%. Management attributed China’s improvement to increased R&D investment and activity among CDMO, CRO, and biotech customers working on advanced therapies.
In contrast, the Americas declined high single digits, though management said that adjusting for the cell therapy order timing headwinds, the region grew low single digits. EMEA was flat against a strong double-digit comparison in the prior year, with diagnostics strength offset by order timing dynamics.
By end market, management described an ongoing split between large pharma and emerging biotech. Kelderman said large pharma revenue increased low double digits for a fourth consecutive quarter, while emerging biotech declined mid-single digits, though the company noted sequential improvement. In academia, the company reported a low single-digit decline overall, with Europe stable to modestly growing and the U.S. modestly lower. Kelderman highlighted what she described as constructive developments in U.S. federal funding proposals, including a roughly 1% budget increase and maintaining indirect funding rates, though reconciliation remains pending.
Outlook: Q3 growth expected to mirror Q2; underlying trends improving
Hipple said Bio-Techne expects Q3 organic growth to be consistent with Q2, reflecting two company-specific headwinds:
- Cell therapy timing impacts expected to reduce growth by about 300 basis points year over year in Q3, moderating further in Q4 and fully lapping in fiscal 2027.
- A 100-basis-point headwind in Q3 tied to the OEM commercial supply order that shifted into Q2.
Excluding those items, Hipple said the company expects underlying growth to be mid-single digits for the remainder of the business, consistent with improving end-market sentiment. Management reiterated it remains on track for 100 basis points of operating margin expansion for the full fiscal year, with sequential improvement expected in the back half as mix normalizes and revenue increases seasonally.
On cash flow, Hipple said Q2 operating cash flow was strong and comparable to last year, while first-half cash flow was impacted by Q1 timing related to incentive compensation payouts and tax payments.
During the Q&A, Kelderman discussed several strategic themes, including organoids—citing a roughly $50 million run-rate business—and described Wilson Wolf, in which Bio-Techne owns 20% and plans to fully acquire by the end of calendar 2027 or sooner based on milestones. Management said Wilson Wolf delivered 20% organic revenue growth in the quarter.
Closing the call, Kelderman said the company’s “durable core portfolio” and investments in cell therapy, proteomic analysis instruments, spatial biology, and precision diagnostic tools position Bio-Techne for what it expects to be gradual end-market improvement as biotech funding recovers and U.S. academic budgets become clearer.
About Bio-Techne (NASDAQ:TECH)
Bio-Techne Corporation (NASDAQ:TECH) is a global life sciences company that develops, manufactures and sells high-quality reagents, instruments and services for the research, diagnostic and bioprocessing markets. Its core product offerings include recombinant proteins, antibodies, immunoassays, nucleic acid probes and kits, single-cell analysis solutions and automated protein analysis systems. Flagship brands such as R&D Systems, Novus Biologicals, ProteinSimple and Advanced Cell Diagnostics provide researchers and clinicians with reliable tools for cell biology, immunology, proteomics and genomics applications.
Headquartered in Minneapolis, Minnesota, Bio-Techne serves customers across North America, Europe and the Asia-Pacific region through a combination of direct sales, distributors and strategic partnerships.
Recommended Stories
- Five stocks we like better than Bio-Techne
- This $15 Stock Could Go Down as the #1 Stock of 2026
- “Fed Proof” Your Bank Account with THESE 4 Simple Steps
- What a Former CIA Agent Knows About the Coming Collapse
- Your Bank Account Is No Longer Safe
- URGENT: Trump Just Triggered AI’s Biggest Disruption Yet
