QuidelOrtho's 2025 Q2 Earnings Call: Key Contradictions in COVID Revenue, Tariffs, and China Growth

COVID Revenue Expectations, Tariff Impact Mitigation, China Growth Confidence, 2025 China Revenue Growth Expectations, and Free Cash Flow Conversion Targets are the key contradictions discussed in QuidelOrtho Corporation's latest 2025Q2 earnings call.



Revenue Performance and COVID Impact:
- QuidelOrtho's total revenue for the second quarter of 2025 was $614 million, showing 1% growth excluding COVID and the Donor Screening business.
- The company's COVID revenue is expected to be between $70 million to $100 million for the full year, revised down from $110 million to $140 million due to lower emergency room visits and hospitalizations.
- The revised COVID revenue expectations are due to less severe strains of the virus, which typically result in less testing.

China Market and Tariff Holds:
- QuidelOrtho experienced 2% growth in China despite tariff-related shipment holds in April.
- The company maintains a low market penetration in China, particularly in immunoassays, which presents a long-term expansion opportunity.
- The tariff-related shipment holds have been resolved, and no significant volume-based procurement impacts are expected for the remainder of 2025.

Profitability and Cost Management:
- QuidelOrtho's adjusted EBITDA margin improved by 330 basis points to 17%, aligning with their guidance and exceeding consensus expectations.
- The improvement was driven by disciplined expense control and favorable product mix, supported by significant cost savings actions and restructuring efforts.

Molecular Strategy and LEX Diagnostics Acquisition:
- QuidelOrtho's Molecular revenue grew by 24%, although off a smaller base, as they continue to support their customers through a transition plan.
- The company announced intent to acquire LEX Diagnostics upon FDA clearance, highlighting an incremental growth opportunity in the molecular space.
- The acquisition is expected to expand the test menu beyond respiratory applications, with plans to move quickly on placements if successful in achieving clearance by the end of 2025.