Bio-Rad Laboratories, Inc.

Bio-Rad Laboratories, Inc. develops and sells laboratory instruments, reagents and related products. Its Life Science business serves research customers; Clinical Diagnostics supplies medical-testing laboratories. Its principal Class A shares trade on the New York Stock Exchange under BIO, with Class B shares under BIO.B. The fiscal year ends December 31.

Latest quarterly results

Reported sales rose 0.5%, or 0.7% excluding currency changes. Clinical Diagnostics sales were $401.8 million, up 2.8% currency-neutral. Life Science sales were $254.6 million, down 2.4% on that basis. The comparable Q2 currency-neutral rates were 0.3% growth for diagnostics and a 5.1% decline for Life Science.

Academic research and process chromatography remained weak. Excluding process chromatography, Life Science grew 2.5% currency-neutral. Droplet digital PCR revenue rose 7%, with instrument sales growing more than 20%, both currency-neutral.

The reported operating loss includes $77.2 million of total restructuring expense and a $49.8 million Celsee technology impairment. Adjusted operating income also removes purchased-intangible amortization, acquisition-related costs and specified European diagnostic-regulation costs. Adjusted R&D fell to $60 million from $70.2 million, while adjusted selling and administrative costs rose to $214.1 million from $202.2 million.

Net income includes $588.2 million of fair-value gains on equity securities and a loan receivable, mainly the Sartorius investment. Adjusted net income was $71.5 million, versus $60.8 million. The adjusted effective tax rate fell to 21.4% from 26.7%, helping the EPS increase.

Annual outlook and earlier expectations

The November outlook preserves August's 2026 targets: currency-neutral sales between a 3% decline and 0.5% growth; adjusted gross margin of 53% to 54%; adjusted operating margin of 10% to 12%; and free cash flow of $290 million to $340 million. By segment, currency-neutral Life Science sales are expected to decline 1% to 3%, while Clinical Diagnostics ranges from a 3% decline to 1% growth.

The Q3 return to positive currency-neutral group growth follows a 1.9% year-over-year decline in Q2. It has not led to an increase in the annual targets.

Cash, debt and capital allocation

Nine-month operating cash flow was $303.2 million, versus $367.3 million. Free cash flow was $210 million, versus $255.5 million, after $93.2 million of net capital spending in 2026. The annual target requires $80 million to $130 million of fourth-quarter free cash flow.

Cash and short-term investments totaled $1.66 billion at September 30, up from $1.54 billion at year-end. The $6.27 billion carrying value of other investments, including Sartorius, is separate. Cash share repurchases were $79.3 million over the first nine months, versus $295.5 million a year earlier, with about $206 million of authorization remaining at September 30.

Debt and other borrowing-related obligations had a $1.204 billion carrying value, including $9.6 million of finance leases and other debt. The senior notes have $400 million of principal due in March 2027 and $800 million due in March 2032. The $200 million revolving facility was undrawn, with $6 million used for letters of credit, leaving $194 million available.

Acquisitions and restructuring

Bio-Rad acquired Stilla Technologies on June 30, 2025. Final consideration was $257.7 million including the estimated value of contingent payments. Up to $50 million can be paid upon technology-development and sales milestones; none had triggered payment by September 30, 2026. Stilla is a separate acquisition from Celsee.

Bio-Rad recorded a $49.8 million impairment in July 2026, reducing the remaining carrying value of Celsee's developed technology to zero. It is reducing associated research, development and marketing and closing the related facility.

The global restructuring initiated July 31 and announced in August is expected to cost $80 million to $90 million and be substantially complete by the end of 2027. Annual operating-expense savings are expected at $30 million to $35 million after full implementation. The new plan incurred $77.6 million of Q3 charges, including $72.7 million of employee-termination expense; $8.6 million of those termination costs had been paid. The quarter's $77.2 million total restructuring expense also includes adjustments relating to earlier plans.

Total restructuring liabilities were $69 million at September 30, including $53.5 million classified as current. The main developments to follow are diagnostics demand, research-market conditions, the effect of lower R&D spending, and cash generation as the reorganization progresses.