QuidelOrtho (QDEL) Q2 Earnings call transcript Jul 31, 2024

QuidelOrtho, a leading diagnostics company, held its second quarter 2024 financial results conference call, revealing a solid performance across all geographies. The company reported a total revenue of $637 million and an adjusted EBITDA of $90 million, in line with expectations. In the call, executives shared insights into the company's strategic initiatives and financial outlook.

Strategic Focus and Priorities

Brian Blaser, the newly appointed CEO, shared his perspective on the company's performance and outlined key strategic priorities. He emphasized the need to improve efficiency and productivity, particularly in areas like R&D and operations. Blaser highlighted the importance of maintaining a customer-focused approach while driving cost savings. He also discussed the company's focus on product portfolio expansion, specifically in the respiratory and point-of-care segments.

Financial Performance and Outlook

Joseph Busky, CFO, presented the financial details, highlighting the company's strong performance in the second quarter. Revenue growth, excluding COVID-19 and U.S. Donor Screening, was 5% in constant currency. The company achieved a solid performance in its nonrespiratory business, with Labs, Transfusion Medicine, and Point-of-Care growing by 2%. Despite a decline in Labs Instrument revenue due to the significant backlog from the previous year, Labs recurring revenue grew by 4%.

The company is actively working on improving its cost structure to support long-term growth. It has executed on $100 million in annualized cost savings measures, primarily through staffing reductions, and expects to realize savings of approximately $50 million in the second half of 2024.

Product Development and Strategic Initiatives

QuidelOrtho is focusing on product development, with a particular emphasis on its Savanna platform. The company is working to expand the platform's menu and has several assays under development, including RVP4 for molecular testing. The goal is to provide a differentiated set of assays that cater to various markets and improve competitive differentiation.

Looking Ahead

Looking forward, QuidelOrtho is focused on executing its strategic initiatives, improving operational efficiency, and achieving its adjusted EBITDA margin expansion goal in the mid- to high 20% range over the next 2 to 3 years. The company is confident in its ability to maintain financial stability while investing in future growth opportunities.

Despite facing challenges in certain areas, QuidelOrtho remains optimistic about its future. The company's strategic focus on product development, cost savings, and operational efficiency positions it well for long-term success. As QuidelOrtho continues to navigate market dynamics and address its internal challenges, investors and stakeholders will closely watch its progress in the coming quarters.