Repligen's Q3 2025 Earnings Call: Contradictions Emerge on Market Growth, Tariff Impact, New Modalities, and CDMO Recovery

Date of Call: October 28, 2025

Financials Results

• Revenue: $189.0M, up 22% YOY (18% organic excluding acquisitions & currency; ~2 pts from acquisitions, ~2 pts FX tailwind)
• EPS: $0.46 adjusted fully diluted, vs $0.43 in Q3 2024
• Gross Margin: 53.3% adjusted gross margin, +260 bps YOY and +210 bps sequentially; YTD 52.7% (+230 bps YOY)
• Operating Margin: 14.2% adjusted operating margin; adjusted income from operations $27M, up 16% YOY; margins down ~70 bps YOY largely due to M&A; company expects ~13.5% operating margin (adjusted income from operations $98–100M) for full year

Guidance:

• Revenue guidance raised to $729–$737M for 2025 (midpoint +$8M).
• Organic non‑COVID growth 14.0–15.5% (organizational organic 12.0–13.5%); ~1 ppt FX tailwind assumed.
• Franchise outlook: Filtration ≈10% reported (~13.5% ex‑COVID), Chromatography ≈25%, Proteins 15–20%, Analytics >30% (includes 908 Devices assets).
• Adjusted gross margin expected 52–53%; Q4 margin to be lower due to mix.
• Adjusted operating income $98–100M (~13.5% op margin); adjusted other income ≈$21M; tax rate 21–22%.
• Adjusted EPS $1.65–1.68; CapEx expected down ~20–25% vs 2024; tariffs a slight headwind.

Business Commentary:

* Revenue Growth and Organic Performance: - Repligen Corporation reported revenue of $189 million for the third quarter of 2025, a 22% year-over-year increase, with 18% organic growth excluding acquisitions and currency impact. - The growth was driven by strong performance across all franchisees, with particular strength in Process Analytics, Filtration, and Capital Equipment.

• Process Analytics and Filtration Growth:
• The Process Analytics franchise experienced over 50% growth in revenues, with 30% growth at CTech, while Filtration grew over 20%.

• Growth was driven by the launch of new products like SoloVPE® Plus and strong demand for consumables, equipment, and services.

• Geographical and Customer Performance:

• Asia Pacific region grew nearly 50% year-over-year driven by Filtration and Fluid Management, analytics, and ATF.

• The company saw 20% growth in the Americas and low double-digit growth in EMEA, with strong customer growth across pharma and CDMO accounts.

• Strategic Investments and Initiatives:

• Repligen is expanding its presence in Asia with strategic investments, including opening new offices in Singapore and Japan.
• The company's Strategic Account Strategy initiative has led to increased customer engagement, with many strategic accounts being accretive to growth.

Sentiment Analysis:

Overall Tone: Positive

• Management: "another outstanding quarter... 18% organic growth" and "every franchise grew double digits"; CFO: "third quarter revenue of $189 million... adjusted gross margin of 53.3% increased 260 basis points year‑over‑year"; company also raised the midpoint of revenue guidance and emphasized continued investment and margin expansion.

Q&A:

• Question from Dan Arias (Stifel): Can you talk about the cadence of order momentum across the quarter and out of the quarter, and to what extent does the midpoint bump capture what you’re seeing given China is a bit of an offset?
  Response: Orders grew >20% with six straight quarters of sequential order growth and consistent month‑to‑month cadence; China sales are returning but orders were softer, and the guidance midpoint bump reflects broad portfolio strength with an expected China recovery in 2026.

• Question from Dan Leonard (UBS): How should we reconcile the sales guidance increase with narrowing EBIT margin guidance, and what’s the right level of operating margin expansion for a high‑teens revenue growth rate?
  Response: Gross margin is expanding but operating margin is tempered by ~$2M of one‑time charges, FX pressure and continued strategic investments; company is prioritizing reinvestment for future growth while pursuing medium‑term margin expansion.

• Question from Matt LaRue (William Blair): What do you make of onshoring activity and Repligen’s ability today to participate in larger scale projects relative to prior cycles?
  Response: Repligen is now a broader hardware player receiving RFPs for large onshoring projects, expects initial orders in H2 2026 and revenue from those projects in 2027–2028, and anticipates playing a significant role.

• Question from Doug Schinkel (Wolfe Research): Your guidance implies less seasonality into Q4 than historical averages; is that conservatism and can you delineate filtration/ATF vs non‑ATF dynamics and resin trends?
  Response: This year shows reduced seasonality driven by an unusually strong Q3 and a ~3% headwind from a gene‑therapy customer; Q4 organic growth guidance (8–13%) reflects tougher comps and delivered ATF hardware late in Q3 that influences timing and mix.

• Question from Puneet Sudha (Lee Rink Partners): Given current momentum, is ~13% organic growth for 2026 reasonable and how should we think about the gene‑therapy headwind next year?
  Response: 2026 guidance will be provided on the Q4 call; company aims to outpace industry by ~5% medium‑term but expects ~200 bps headwind from that specific gene‑therapy customer in 2026, with diversification (mAbs, cell therapy, ADCs) mitigating exposure.

• Question from Mac (Stephens Inc.): Asia Pacific grew ~50% this quarter—what investments are driving that and will you add more resources?
  Response: Asia Pacific is underpenetrated (~15% of sales); management is investing in leadership, field presence and infrastructure (new offices in Singapore and Japan) with differentiated China vs rest‑of‑Asia strategies and plans for continued investment.

• Question from Casey Woodring (J.P. Morgan): You delivered hardware for a second ATF blockbuster late in 3Q—should we expect revenue to fall in 4Q or 1Q26 for that project, and can you expand on emerging biotech trends and orders?
  Response: Timing of consumable pull‑through is uncertain; hardware was delivered late Q3 and meaningful consumable revenue may appear mid‑2026; emerging biotech rebounded (highest in ~3 years), remains <10% of sales but benefitting from renewed funding and M&A activity.

• Question from Daniel Markowitz (Evercore ISI): Is equipment strength explained mainly by ATF placements or is it broader, and what was the revenue contribution from those placements and expected consumable pull‑through?
  Response: Equipment strength was driven by ATF and analytics but is broad‑based across product lines; the specific blockbuster ATF project was a small component of overall growth and management declined to quantify project revenue while noting consumable pull‑through should materialize over time.

• Question from Brendan Smith (TD Cowen): Can you provide color and timing on integrating 908 Devices' Maverick into ATF and how that plays into franchise growth?
  Response: Integration is on plan: sales organizations merged, R&D work to combine ATF and Maverick is progressing well, and management expects to provide more detail in about a quarter with outcomes looking promising.

• Question from Anna Snapkowski (KeyBanc): Any update on mid‑sized CDMO activity versus large CDMOs, and how have recent protein resin launches performed?
  Response: Large‑scale CDMOs drove >20% CDMO growth this quarter; mid‑sized CDMO activity wasn't specifically detailed; protein outperformance was driven by chromatography resins and custom ligands, with 2–3 new resins planned before year‑end and more launches in 2026.

• Question from Tom DeBorcey (Niffron Research): What trends are you seeing at the 20 Strategic Accounts and how do they differ from the broader portfolio?
  Response: Strategic Accounts have been accretive—driving cross‑sell, multiple product purchases, increased equipment RFPs and closer customer engagement, giving the company broader access to decision makers and accelerating multi‑product adoption.

• Question from Luke Surgot (Barclays): How are orders splitting between new modalities and mAbs heading into next year, and what margin expansion should we expect given investments and headwinds?
  Response: New modalities were muted in Q3 (YTD new modalities ≈17% of revenue) with a specific gene‑therapy headwind; management expects continued gross margin expansion and operating leverage but will balance that with targeted investments—more granularity to follow with Q4 guidance.

• Question from Brandon Coulard (Wells Fargo): What pricing is embedded in the guide and can you quantify tariffs/surcharges and their recurrence into 2026?
  Response: Net pricing is low single‑digit and expected to persist; tariffs/surcharges are a modest impact (~a couple million in 2025) and represent a marginal profit dilution that management currently expects to remain a limited but ongoing headwind while they monitor developments.

Contradiction Point 1

Market Growth and Order Momentum

It involves differing perspectives on market growth and order momentum, which directly impacts the company's growth outlook and investor confidence.

Could you explain the order growth pace during the quarter and the trend following it? - Dan Arias(Stifel)

2025Q3: Orders grew more than 20% in Q3, marking the second consecutive quarter with such growth. - Olivier Loeillot(CEO)

How do you assess market growth and how does it impact your growth outlook? - Douglas Anthony Schenkel(Wolfe Research)

2025Q2: We estimate bioprocessing market growth from 8% to 12%. We aim to grow 5% above this range, driven by innovation and differentiated products across modalities and customers. - Olivier Loeillot(CEO)

Contradiction Point 2

Impact of Tariffs and Trade Uncertainties

It involves the impact of tariffs and trade uncertainties on the company's operations and financial performance, which are crucial for strategic planning and investor confidence.

How do you view onshoring activity and shifts in customer conversations tied to recent tariffs? - Matt LaRue(William Blair)

2025Q3: Repligen now receives RFPs for large hardware investments, indicating significant growth opportunities. - Olivier Loeillot(CEO)

How are global trade uncertainties affecting equipment orders? - Rachel Marie Vatnsdal Olson(J.P. Morgan)

2025Q2: We have not observed any significant pause in equipment orders due to tariffs. - Olivier Loeillot(CEO)

Contradiction Point 3

Growth and Contributions from New Modalities

It involves the growth and contributions from new modalities, which are critical for the company's long-term growth strategy and investor expectations.

How do new modalities compare to mAbs in orders, and what's the margin expansion outlook for next year? - Luke Surgot(Barclays)

2025Q3: New modalities saw muted demand, with headwinds from a gene therapy project. - Olivier Loeillot(CEO)

Can you explain the outlook for new modalities, the 1% headwind, and overall expectations? - Daniel Anthony Arias(Stifel)

2025Q2: The 1% headwind is specific to a gene therapy platform. Portfolio strength compensates, with double-digit growth in other new modalities like cell therapy and ADC. - Olivier Loeillot(CEO)

Contradiction Point 4

CDMO Recovery and Order Trends

It involves differing perspectives on the recovery of CDMOs and the sustainability of order trends, which are critical for understanding business momentum and growth prospects.

Can you discuss the order momentum trends during the quarter and at the end of the quarter? How does this position the company for next year based on current expectations? - Dan Arias(Stifel)

2025Q3: Market conditions are improving, with pharma and CDMOs showing strong recovery and small biotech returning to growth. - Olivier Loeillot(CEO)

How have conditions changed since last quarter, particularly regarding CDMOs and China? What are the key factors now? - Daniel Arias(Stifel)

2024Q4: The health of the bioprocessing ecosystem is reflected in CDMO performance... Orders are up quarter-by-quarter, and the funnel has grown significantly. - Olivier Loeillot(CEO)

Contradiction Point 5

Impact of Tariffs on Revenue and Growth

It highlights contrasting views on the impact of tariffs on revenue and growth, which are important factors for financial forecasting and strategic planning.

How will tariffs and surcharges impact 2025 results and 2026 expectations? - Brandon Coulard (Wells Fargo)

2025Q3: Tariffs have a minimal impact in 2025, with slight dilution at the profit level. Expectations for 2026 remain similar. - Jacob Johnson(CFO)

Can you break down the different categories of revenue offsets related to tariffs and how much is incremental pricing pass-through? - Rachel Vatnsdal (JPMorgan)

2025Q1: We think there's around 1% sales increase due to surcharges to pass through costs and mitigate inflation impacts on raw materials. - Jason Garland(CFO)