Repligen Corporation Aktie

Good morning, everyone. Thanks for joining us for the Repligen management presentation. My name is Matt Larew. I cover Repligen here at Blair. Very pleased to be joined this morning by Olivier Loeillot who is the CEO of Repligen. Before we get to the presentation, 2 quick things. First, the Richardson room upstairs is where the breakout session will be. And second, for a complete list of research disclosures or potential conflicts of interest, please visit williamblair.com. So again, very pleased to have Repligen here today, and I'll turn it over to Olivier.

Very good. Well, welcome to the Repligen Presentation. You got used to my French accent in the meantime. So that's great. You don't need a translator anymore. So we are going to go through a deck that's going to tell you about the beautiful story of our company. And I think some of you -- most of you know the company already pretty well. But for those who don't know us, we are headquartered in Waltham, Massachusetts. We are a pure bioprocessing play.

Sometimes I hesitate a little bit when we say that because we do have a business on the analytical side. Yes, we do have a little play on the analytical side, but we are really a pure bioprocessing player, about 2,000 people overall. And we've got -- for the vast majority of our manufacturing of our product portfolio, we've got dual-manufacturing siting.

Last year, we did USD 738 million. This year, at midpoint of our guidance, we're going to be in the USD 800-plus million range this year. The word that you will hear me mentioning 20 times today, probably, is innovation. I mean it's really our DNA. I mean we've been growing, thanks to our innovation. We are still very heavy on innovation. And then we love what we have launched.

We love what we're going to be launching over the next several years. So just a few key takeaways. I know sometimes you like the takeaways at the end. I like them at the beginning, so that at least you know what I'm going to be talking to you about today and what I really want you to remember, innovation is really what has given us the right to win and will give us the right to win over the next decade or so.

But we have a very diversified portfolio of products as well. I mean, I remember a year ago, I mean, I had to explain many of you and all of our analysts, we are just not only ATF and OPUS. Interestingly enough, ATF is probably the business that has had the highest amount of headwind in the last 1 year. We've still been managing to grow 16% last year, and we're going to be outpacing market growth again this year.

So we have a really very diversified portfolio of product. But also from a modality point of view, we are just not a new modality. I know last year, oh, you are just a new modality company. No, we are not and we had a big headwind on gene therapy. We still grew 16% last year. We've got a lot of levers to keep on outpacing industry growth. And I mean, even with some of the headwinds we have had, we're still outpacing industry.

So can you imagine how much we would be outpacing if we wouldn't have had all of this headwind we just talked about. And I mean, just to mention a few of the reasons why we can outpace really market growth. The first one is really like we are bringing breakthrough solutions. About 80% of our portfolio, we don't really have competitors. So we are really creating new market segments that didn't exist before.

I mean ATF is a great example, but PAT is another great example where whatever happened with the market, we are still growing because we are creating just new market segments. And we have obviously a commercial-clinical mix that is very different than the other guy. I mean, where the other guys are typically around 75%, 80% of their sales going to commercial drug, it's only 40% of it going into commercial drug. It's increasing. I mean a year ago, it was about 35%, probably 3 years ago, it was about 30%.

And as we are winning more and more design in commercial drugs with both ATF, but more recently with Protein as well, I would imagine that the share of commercial is going to keep on growing significantly over the next few years. The last one I would mention is Asia. I mean, -- we're a little bit supply in Asia. I mean, we did about 17% of our sales in Asia last year.

Most of our competitors are 20% plus. I mean it's a great problem to have probably for somebody like me because I spent a lot of my time in Asia in my career. I think I know that region pretty well. So we are really doubling down in Asia right now to make sure we grow faster. And with the right strategy in each of the country in Asia down there.

Finally, we are obviously working on expanding margin. I mean, you've heard us mentioning several times, we have to get fit for growth and both are linked to each other. And getting fit for growth for me is how do I make sure like we've got the right leadership. We have the right infrastructure, the right software, the right tool to be able to run a business that's going to be $1.5 billion in a few years from now and probably 3,000, 3,500 people or so.

So we spend a lot of time on that, but we're making sure we combine it with improving our margin, which we have. I mean you've seen it happening last year. You've seen it very, very importantly in quarter 1. We are going to really make sure like we are balancing well top line growth versus improving margin. I'm confident we can do both. I mean, which is why we've put in place a transformation office that I'll talk to you a little bit about later on, where really we know that's going to both accelerate top line growth, but at the same time, improve our margin further.

And finally, we are really working on specific strategic priorities. I mean, I already mentioned the transformation office. We signed a very important OEM deal in China. I mean, about a year ago, I want to say, I started to tell some of you, I think the China market will start rebounding really, really fast. I mean it happened even faster than I would have thought, to be honest with you, but we all recognize this market is just booming completely now, and it was really very important for us to articulate a really good strategy down there.

So moving to the next slide, let's focus a little bit on this innovative technologies that are giving us the right to win and defeat competition. So I won't go through the entire portfolio of products we have. But what you're going to see in the next couple of slides, we have a really broad portfolio of products. And when I joined the company about 3 years ago, I was delighted to see that because when I joined what was GE Healthcare Life Sciences in 2010, my task was to build that A-to-Z offering that Cytiva has been really benefiting from a lot in the past several years and so on.

So we have already a very broad portfolio of products. I mean when I show you the workflow later on, I want to say that when you compare to the 4 big guys, we have probably a broader portfolio than 2 of the 4 big guys. There are 2 and one of them is the one I'm coming from, which has got more or less everything and another one probably that has got a bit more than we do, but we have a really broad portfolio of products, meaning the capabilities we have, the opportunities we have to grow are absolutely massive by getting our product really embedded by big, big accounts.

So without entering into too many detailed innovation, we talked about the breadth of the portfolio as well. The one I want to just mention here is really agility with care because the reason why big accounts love us and want to do more with us than with the big guys is because we are more flexible, we are faster. We are obviously very innovative. And that is something we really want to make sure we keep. So in our leadership meeting, we constantly remind ourselves, we are all coming from 1 of the 4 big guys for one reason, which is we don't want to do exactly the way they do business, meaning we want to stay flexible, agile, fast, customer focused and so on, and that's really something we are particularly focused on a daily basis.

Last but not least, I mean, everybody talks about digitization. We do it. I mean we really -- it's not only words. I mean we've got -- we are the only company that has got now 5 PAT technologies. And you've heard me -- some of you have heard me saying, I feel like we're almost like where Google was in 1985 or something like that, where we have the ability now to grab a lot of data from process development, from manufacturing.

We just need now to convince customers to share those data with us and then give them further tool beyond just grabbing the data via PAT technology with digital twin and later on with AI software so that they can develop their processes much faster, but also they can run their manufacturing in a much more efficient manner. So we think we are by far the leader in the field. We are really doubling down right now on PAT so that our customers can collect the data. We're going to try to do our best to make sure we get access to those data as well and then we can help our customers in their digitization journey.

Growth. I mean, you all know we've been growing very nicely. So I know why 2019 to 2025, just because in between, there was a little event called COVID that like screwed up everything. So we kind of realized like instead of explaining without COVID, with COVID that, let's look at where we were before COVID and where we are now because somehow COVID noise is out now because there is no more COVID today, and there was not in 2019. So we really had an 18% CAGR in the last 6 years.

And what's probably more important is look at the right side of that slide where our total addressable market has grown tremendously over the last several years. I mean we have now about USD 13 billion of addressable market, where the total market, I know there are a lot of numbers flowing around is probably around $22 billion, $24 billion. So we've got a big, big play into those markets. And with our sales currently, we probably have about 5% market share. So as you can imagine, we've got massive opportunity to grow on that very big market here.

So what about our broad diversified offering? I mean, this slide, I think, is important to show you what we've been achieving over the last 10 years. I mean, 10 years ago or so, our top 3 customers were 2/3 of our business. So talking about what was a real risky business, I mean, look at where we were 10 years ago. I mean, last year, our top 10 were only 1/3. And in fact, our bigger account last year was only 7% of our total sales. So we have a very diversified customer base.

But probably even more important, look at the franchise column here, where we were just a protein business back 10 years ago. So -- and when I say protein, it was not really protein. I mean, we were just an OEM partner supplying ligands to the 2 big guys in the field, namely GE Healthcare Life Sciences Core Cytiva now and Merck Millipore. We've diversified that product portfolio completely over the last several years.

And look at where we are now where filtration last year was about 55% of our business, but we have 3 more businesses like chromatography, protein, and analytical that are doing very well, growing very, very strongly, particularly during the last several quarters where they've been like skyrocketing each of them and which is great because I would imagine that we will balance our portfolio even more probably over the next 4 to 5 years.

From a modality point of view, we are obviously pretty present on the new modality side. I mean I would have thought we would be higher than 16%. I mean, imagine we wouldn't have had all of the headwind we had on that side and a year ago, particularly on that specific gene therapy program and so on. I mean, everything was well aligned that new modality would be above 20% for us probably in '25 and this year for sure.

I mean I'm still very bullish about it. I mean we just have to bend down a little bit more. I mean -- but think about the fact most Big Pharma funnel today, more than 50% of their funnel is in new modality. So it's just a question of time. I mean, whether it's in the year, whether it's a little bit longer, it's going to come back. We started to see some really positive signal on the gene therapy side.

I mean you've probably seen like there was 2 FDA approval in quarter 1, but no later than yesterday, the FDA has issued a guidance to potentially accelerate new modality -- sorry, gene therapy drug approval, which we hope is going to bring back a lot of optimism on that side. So you'll hear me talking about new modalities for the next several years because we are still absolutely convinced about it.

Talking about the breadth of the portfolio, I mean, you've seen that one probably already. I mean, we are really, really broad. I mean, we've got 3 main gaps, cell culture media, bioreactors and viral filters. We've got to play in more or less anything else. And we obviously want to keep on broadening that portfolio of products and looking at different opportunities, whether organic or inorganic to make sure we've got a bigger play across the board here. So we talked quite a bit about how we're going to outpace. It's a bit of a different setup here.

So I want to start with the first one, which is really we are creating solutions. I mean, when you compete with 4 big guys who are all like anywhere between 4x and 10x bigger than you are, I mean, you have to be differentiated. I mean you can't just come with me-too products and so on. We will have 0 chance. I mean the guys who have tried to do that, they are not particularly successful. So we're just trying to really make sure like we are creating new solutions. We are fixing problems for customers.

ATF again, is a perfect example. Right now, I mean, everybody is looking at downstream continuous manufacturing. That's probably an area where we want to help customers in the future because that's really a new solution that everybody has been hoping to get something to deal with, which has never happened so far. Digitization is another great example, as I talked about earlier. But at the same time, we're trying to increase our position. So let's talk about onshoring. I mean we do have a seat at the table.

Now thanks to this portfolio, we've really broadened over the last several years. Now we have a seat at the table. I mean, quarter 4 of last year, we received several RFPs that we never ever received before. I mean we started to win some. I mean, decision-making takes time. I mean you all know that. That's a CapEx spending tap that we can't wait to see opening. But I mean, we're starting winning. I mean -- and the opportunity for us is actually massive. I mean I won't do the math that I've done.

But for us, I when you really take haircut on what has been announced and so on and so on and our market share, I think we have probably a USD 500 million hardware opportunity around the corner, when I say around the corner for the next probably 3 to 5 years, which at our scale, it's a massive opportunity, obviously. And beyond that, obviously, we're trying to gain market share on the flat sheet cassettes, which we are, and we're trying to gain market share on fleet management where it has been more difficult, but we are doing everything possible to be successful here as well.

And finally, we talked about clinical versus commercial. We talked about Asia as well. We've got something that I think nobody else has got, which is our Key Account Management team, which is really built with people who have been in the industry for the last 20 years, 30 years, who know each of these customers personally, multiple contacts and so on. This has been a great tailwind for us for the last several quarters and so on. And I think we're still at the beginning of the story.

We said earlier, we are selling 2.5x more of our products today than we were 5 years ago with those key accounts. I think on the scale from 1 to 10 with those big accounts, I think we're just between 2 and 3. So we've got a massive opportunity to further grow with those guys in the next several years here. So we talked about the 80% differentiated, so I won't repeat that again. Maybe the New Product Introduction, and that's a metric that we are tracking very specifically.

And having been in that industry for the last 30 years, I can tell you we are like far better than anybody else on that side, meaning last year, about 9% to 10% of our sales came from products we launched in the last 3 years. That's very unique. And I can guarantee you, I mean, we're spending about 6.5% of our sales in R&D every year. I mean, it's significant, much more than others. But considering the size of others, you would imagine they should be able to generate much more innovation than they do.

We're launching typically about 10 new products every year. I personally think it's almost too many. So we are trying to figuring out how maybe we reduce it a little bit so that our sales team can refocus on a smaller number, but that's a real track record for us here. So digitization, let's spend a few minutes here because that's really close to my heart. And I kind of alluded a bit to it already. But with PAT, you're grabbing the information.

But then you need to make sure you're integrating PAT inline with systems so that not only you're grabbing the information at-line because at-line is great, but at-line is not really helping you as much as inline. Inline is enabling you to increase your yield tremendously because you know exactly when you're going to have to stop your batch, but also you avoid all of the risk of cross-contamination because you don't have to take sample every 5 hours.

So combining PAT technology with systems is going to enable customers to be much more efficient. But indeed, the next step is really integrating digital twin capability like the Novasign one, which we are including in the next TFF system we are launching at the end of this year, beginning of next year so that people can really understand their processes much better than they do right now. Then the future vision, it's AI, obviously. I mean, we all hear about that on a daily basis.

Unfortunately, many people talk about it without having a clue what they're talking about. I can guarantee you this is going to happen. It's not going to happen next year, probably. It's probably going to be another couple of years before we are at the stage where we can sit with the OpenAI, the Anthropic of this world and telling them, Hey, guys, we are the leading company in bioprocessing to enable the biopharma industry to be more efficient. We need to partner together because we have access or our customers at least have access to the data.

How do we make sure now together, we can develop the tool that will enable them to be much more efficient. So it's on our radar screen. I think we are far ahead of anybody else. It's going to probably still take a couple of years, but we are very excited about that for sure. I think I mentioned that, so I'll skip it Asia as well. So let's maybe look at China because I think some of you heard me saying a year ago, I think China is going to start to rebound and look at where we are today.

I mean it's -- if there is one thing that has changed completely over the last 1 year, it's really China. And you've seen all of these licensing deals that are happening between U.S. company and Chinese company just in the last 1 week. I mean, you've got BMS first, I think $15 billion Pfizer over the weekend, I think $10 billion. I mean, the total investment is massive. So what does it mean? It means 2 things.

It means, first of all, like U.S. and starting to miss a little bit of innovation coming from those small biotechs that had a little bit of a headache getting funding in the last 3 to 5 years. But beyond that, it means like China, which had to really switch from being a biosimilar type of industry has become now really one of the most innovative, partly on the antibody-drug conjugate, but also on the bispecific antibody side.

It means like this market is becoming now a real big engine of growth for bioprocessing company, which is why we've been very focused on it. We just signed an OEM deal with a partner a few months ago or so. We are working on several options to be able to regrab the growth that we think is going to come, and it's going to be massive over the next several years in that specific country here. The commercial mix, I think we talked about as well as the new modalities, so I'll skip this one.

I think this one is a new one, and I mentioned a little bit of it already. We have a really very diversified portfolio of products. I mean think about it last year with the new modality headwind we had and then with a few other stuff that happened, we still managed to grow 16%. And this year, Q1 for me is a showcase. I mean -- and unfortunately, Filtration was not doing as well as we would have hoped because one of a couple of our big accounts informed us like they were managing a little bit of their inventory this year. Look at the other guys, I mean, analytics grew more than 50%, in fact, in quarter 1.

We say we're going to grow probably more than 20% in the full year, but we grew more than 50% organic, more than 40% in quarter 1. Chromatography, it's about 4 or 5 quarters in a row like we've been growing double digit, if not even above 20%. And Protein, think about it like 2 years, 3 years ago was like the nightmare scenario where our 2 big OEM partners tell us at the same time, we are not going to work with you anymore.

Not only we've managed to recover from it, but we are generating growth, 15% growth, mid-teens growth in quarter 1 on a very tough comp because quarter 1 of last year was very high. So we have a really broad portfolio of products. I mean if there is one key takeaway for you today, imagine we wouldn't have the headwind we have right now. I mean, the growth would be absolutely massive. I mean, so that's really something I just want you to understand today.

Capital equipment, obviously, something we are very, very focused on because we did have a pretty good year, partly during quarter 2, quarter 3 of last year, and then we started to see a little bit of a slowdown. We are still doing okay because analytics is booming, but also our Metenova stainless steel mixer business has been benefiting from the very high growth, both in China and in India as well. But the rest has been definitely a little bit slower than we would have liked. That is a massive potential tailwind for the future. I mean you heard me about the number.

Our funnel of opportunity for hardware right now is more than 20% higher than a year ago. We're just waiting for customers to make a decision. And once the tap is going to open, that's going to be, for sure, a massive opportunity for all of us, by the way. I mean I don't want you to think it's only represent -- it's only a few numbers of company having those hardware to offer. I think it's going to become very soon a big seller market, and most companies are going to benefit from that very grandly. So with this, are we confident that we can outpace market?

Absolutely. I mean think about it last year, 16% organic non-COVID growth. We definitely outpaced market by more than 5 points last year. This year, obviously, with the headwind we have on gene therapy, we're going to be a little bit less than 5%, but we are absolutely above market, but we're absolutely very convinced that we're going to be able to outpace in the near term, which is why we said we're going to double the size of the company in the next 2 years. And we're going to make sure, at the same time, we are improving margin as well, which is why we said we are going to target 30% EBITDA margin by 2030 as well.

So we're on the right pace. I mean, here, you've seen, I mean, a really great start of the year, good year last year, great start of the year. We also decided to put in place that transformation office, not just to enable us to accelerate that EBITDA margin because it will, but it's not the primary target. The primary target was really to make sure we accelerate the -- getting Fit for growth, meaning improving the way we operate the company from every angle, IT, AI implementation, but also site consolidation and so on and so on.

But with volume plus price plus the Transformation Office and the OpEx leverage, we're absolutely extremely confident about our ability to move towards the 30% EBITDA margin. So just a couple, I think I mentioned quite a bit of that already on Transformation Office, ITI I did. One thing maybe because it's also helping us to accelerate further top line growth, that Transformation Office. Think about it. We are still considered to be somewhat a bit of a newcomer, particularly for hardware.

So the first thing you need is to make sure like once you start to get wins and you deliver to those customers, you're not letting them down. I mean that's the most important ever. Imagine you decide to switch your IT supplier at home and so on, your net supplier and then suddenly they let you down after a month, you're going to go back to the previous one right away. I think here, that's something we are really focused on to make sure like we are supporting our customers partly from a service point of view.

I mean, I've mentioned when I joined the company 2.5 years ago, so it was taking us 4 months, 4 months between the time we were delivering an equipment to a customer and we're installing it. Can you imagine you buy a big piece of hardware at home and then your suppliers tell you see you in 4 months, you don't like that, right? So now we're down to 1.5 weeks. I mean that's just an example of getting fit for growth and making sure we bring the right level of service to our customers so that they want to keep on doing more and more with us.

Site rationalization, we have far too many sites. I mean, for a company of our size, I mean, we've got 17 manufacturing sites. I mean, so we are working every year on how do we consolidate that so that -- and then what we've done is we have 8 to 10 of our sites that we know are the site for the future. And any decision we're making of investment has to be on one of these 8 to 10 sites.

And at the same time, we are trying to shut down the other one so that we've got much lower number of sites in a few years from now. Okay. So just looking at time. So delivering on strategic priorities. So we've delivered last year across the board, and I was really happy, obviously, above-market growth, 16% organic non-COVID. Sorry about the non-COVID. I got that question several times.

The reason why we are the only one probably that still had to talk about non-COVID last year is because we had a restatement in 2024, where there was a big chunk of sales happening on COVID. That's the only reason why I promise you -- well, I can't promise you because maybe COVID comes back, but I hope we don't have to mention COVID anymore in the future. Anyway, expand margin, expanded operating margin by 90 basis points.

I mean, in fact, it was 240 basis points organically, but we really -- what we reported out was 90 because of the acquisition of 908 -- we continue to innovate. I mean, we had several very important launches last year, SoloVPE PLUS. I mean just spending maybe a minute on that. When I joined the company and having been in a different world before, I couldn't believe like we never ever launched a second version of any hardware we launched in the last 10, 15 years.

I mean, there is huge opportunity for replacement upgrade market for any hardware you're selling on the market. And particularly when you've got installed base like Solo, where you've got more than 2,500 units and same with the little sister, which is our small-scale TFF. I mean, the first thing I told the team, we really have to develop new version of our installed base.

Look at one of the reasons why we have this huge tailwind, and it's just at the beginning of it with the C Tech business, is because we are generating that replacement upgrade market that is coming on top of the organic growth of this type of business. We are doing the same. We're going to launch a small version, small TFF version of a similar installed base of several thousand of units beginning of next year. That should be a huge tailwind for filtration next year.

M&A, very important. I mean the last acquisition was a year ago. We've been really upgrading very much the way of working of that team. I'll be honest with you, was a small shop. So they needed to get really fit for growth, probably much more than we do ourselves. So we spent a lot of time on that. We have improved the funnel tremendously, and we think that's going to be a very nice big growth for us over the next 5 to 10 years here.

And finally, again, to hire. I mean you hear me talking about people. I mean, when you look at the organization we have today, I mean, we have an incredibly strong team of leaders. I mean -- and with all the credit I give to Tony for what he has built and an incredible franchise, we really needed to move from a couple of people making decision for the entire company to have now a team of people that is really capable to absorb and empower their own team to move faster and so on because that's going to be absolutely critical for us over the next 5 to 10 years when we become a multibillion U.S. dollar company.

And this year, they are pretty much the same, to be honest. I mean if you think about it, the above-market growth is still obviously line of sight for us. We are partly focusing on key accounts and on APAC as well. I mean I talk a lot about China, but a country like Korea for us is a massive opportunity. I mean we've done a really good job over the last couple of years to get traction at some of the big actors in that region as well.

Expand margin, we are accelerating it right now and with the transformation office, we said we probably can accelerate by 100 basis points as early as next year, which we are very happy about. R&D, we have multiple launch happening this year. I mean, parting on the protein side, I mean, we don't talk too much about it because protein probably takes a little bit more time. But when I look at between the catalog product we've launched and the multiple custom projects we are working on very often for what are commercial drugs that have been on the market for several years using resins that were not productive enough and so on.

I mean it's going to be a bit lumpy in the next couple of years, but we've got massive opportunity coming out of that over the next several years. System, we are still developing a lot of new features. We just launched a new version of RS10 at high pressure, which has got a lot of traction, and we are going to add some more PAT technologies on each of our system over the next couple of years. M&A remains really our top priority #1 in terms of capital allocation. I mean I get the question asked very often, hey, what about buying some of your share back and so on.

We still believe at this stage, we can do much better with our money, which is why we're still looking at a lot of opportunities on that side. And then finally, still very focused on getting further fit for growth. This year, most -- biggest area of focus is really on the IT side. I think that's it, 17 seconds, not too bad, right? Maybe some time for you, Yes. Thank you.

Yes. Thanks very much, Olivier. Maybe I'll just ask one question before we go, if that's okay, which is you talked on the quarter 1 call about a meaningful pickup of orders in March that went into April. I feel like maybe there was some confusion at a recent investor conference. So just curious if you could talk about maybe the strength into the second quarter and your perspective on how the business is going.

Yes. No, thanks for the question, Matt. I mean, as you know, we typically don't talk too much about the current quarter, but I think for once, I'll make an exception here. But maybe let me take a quick step back first. We had a massive order intake in quarter 4. And when I say massive, unfortunately, I make a lot of bad decisions. Sometimes I decided to stop talking about orders in quarter 3. We had the highest order ever in the company in quarter 4, which is why we entered into 2026 in a very strong manner.

What was somewhat a little bit disappointed is the first 6 weeks of '26 were a little bit slower. So we will wonder well, probably because quarter 4 was so strong. But then we started to see a really nice acceleration in the second half of quarter 1, and this has kept on going very strongly so far in quarter 2. So we are really very confident. I mean if you think about the fact we delivered midpoint of our guidance in Q1, we already said we're absolutely very confident we're going to be at least at midpoint of our guidance in Q2 as well.

We are probably one of the very few that is in that situation right now. I mean if you look at many others, I mean, they have to see a real acceleration between quarter 1 and the rest of the year or even first half and the second half. I mean, for us, I mean, we wouldn't need to see any improvement of the current situation to be able to deliver midpoint. I mean, in fact, we would need to see degradation to be at the lower end of our bracket. So from that point of view, we are pretty confident about the year.

All right. Message received. Thanks very much, everyone, for joining us, Olivier. Thank you very much. And for those who want to join us, it's in the Richardson room upstairs. Thank you.

Thank you.

We're excited to host Repligen for our next fireside chat. I joined by Jason Garland, Chief Financial Officer; and Jacob Johnson, IR. And with that, we'll kick things off. We're going to do just a fireside chat. If you've got questions, throw up your hand, and we'll try to call on you when we can.

Maybe just to kick things off, you guys recently reported 1Q just a couple of weeks ago. Maybe give us a high-level rundown of how the quarter played out relative to expectations, sort of what was a little bit better, what was a little bit surprising? Any key takeaways there?

Yes. Look, we started the year in a view -- in our view, executing exactly what we set out to do, right? So we had a strong first quarter, better than expectations, certainly on a top line basis as well as earnings. It was right down in the middle of the fairway for our overall total year guide on organic growth. So it started strong on the top line and enough confidence in our margin profile that we actually raised EPS guidance for the year. So financially, a great start.

Second, I'd say that we -- it helped build that confidence in our total year guide as well. We look at, again, first quarter, 11%. We've shared that second quarter is going to be around the same. That's right in line with our total year guide and which means the second half doesn't require an acceleration in growth, right? So again, we kind of keep executing what we're doing. So we've increased our confidence.

The other thing is that we've delivered that margin expansion, but we also shared, I think, some tangible actions that we're taking to make margin expansion, I'll say, number one, more sustainable; and two, accelerating a little bit beyond what we've shared before. So we launched and announced a transformation office, both focused on our Fit for Growth journey in terms of the capabilities we have to continue to grow and scale as well as some very specific projects that will help deliver margin expansion. And we shared that by the end of next year, 2027 on a run rate basis, we'll see about a point of margin expansion as a benefit.

And so again, we're building, I'll say, a structure, a framework, bringing in the right resources to execute that. We also announced a small sale of our Polymem segment, small $7 million-ish of sales last year, but losing money. And so again, cleaning that up as well as a part of our transformation.

And the other thing that we were really excited to share was the signing of an OEM partnership in China. So we've talked a lot about finding ways to be, I'll say, more [Audio Gap].

Using their local manufacturing cost structure, local supply base that gives us to get access to [indiscernible]. So we couldn't have been happier with the start of the year with the financial -- finances we put up the trends and all the great strategic priorities that [indiscernible].

Sure. All right. That's a good overview. Maybe we'll dive into a little bit deeper performances in the quarter. Can you sort of talk through filtration, chromatography, proteins segment or subsegment one by one [indiscernible].

Yes. So proteins grew very strong. We saw both strength on the ligand side, but then also some of the other pieces that we have within our custom and resins. We -- filtration, again, kind of mid-single digits with overall growth. We talked about some dynamics there with ATF and happy to share some more of that a bit later.

Chromatography, again, really great growth in the quarter as well as our Analytics segment. And we've seen a lot of continued traction on particularly our upgrade cycle on the SoloVPE PLUS within our analytics business. So in fact, they helped really lead the charge on our overall equipment performance as well in the quarter. So it was great as we saw great growth across all the franchises. Again, a good testament to the kind of the breadth that we have and the diverse nature of the portfolio.

Okay. I mean since you touched on ATF, maybe we'll dive into that a little bit deeper. You had some customer-specific timing, some inventory dynamics. You have a little bit of a more moderated outlook for that for 2026. Sort of what gives you confidence that you've got strong visibility there and sort of talk about the rebound beyond that?

Yes, absolutely. So I think maybe first point is ATF grew in the first quarter for both consumables and capital equipment. As you mentioned, Mike, we called out a headwind on ATF that moderate our expectations for ATF for the balance of the year kind of as part of our updated outlook for the filtration franchise as well. In terms of what's going on there, it really relates to 2 customers who are managing inventories. We don't think that's totally uncommon for kind of a novel technology like ATF when it's early in its life cycle.

As a result, we think it's really kind of a transitory headwind that we're facing this year. And we expect those customers to kind of order again next year. And that's what gives us confidence in ATF returning to robust growth next year. I think the other important point is both those customers use ATF beyond the commercial drugs -- or yes, commercial drugs we're referencing there. And so we think it's really kind of specific to inventory management. It doesn't relate to anything else. I think as you think about ATF this year and beyond, we continue to win new customers. We continue to expand with existing customers, and we have a really strong pipeline of opportunities.

And I think to the prior point Jason made is even with that headwind, we still have the same organic growth outlook for the year, which highlights what we've been emphasizing for some time, which is we have a broad diversified portfolio of offerings and growth opportunities across all our franchises.

One of those customers actually platformed ATF across a lot of their lines. And so again, this is a very specific inventory dynamic demand.

Is that like a 3-, 6-month drawdown? Or just like how long until you're past this headwind?

We see it as kind of a '26 item, right? And whether that changes towards the end of the year, we'll continue to connect with them. But we're -- our outlook and assumptions is that really that there's nothing that comes through [indiscernible].

And maybe the other important point I should note is outside of kind of the dynamics in ATF, we see healthy demand for consumables in the rest of the portfolio. So again, I think this is very much kind of an ATF customer-specific headwind that we've called out.

And I'm sure you've done this work. Outside of those 2 customers, what are inventory levels like? Is there a concern that someone else 3, 6 months from now down the road will have the same process? Or is there something that these guys have more elevated inventory to begin with?

I think as of now, we see it really confined to these 2 customers. And I think it's a testament to how close we are with these customers that we kind of were able to identify this and call it out as it became apparent. But I don't think we're seeing the impact elsewhere within ATF on any other customers.

We still have a good mix of commercial versus clinical as well business. So this type of order of magnitude of inventory is going to be more on the commercial side as well. So again, that's the breadth of what we're offering helps in that.

Okay. All right. And then maybe more broadly in the portfolio, the strength you're seeing in the first quarter, the strength you're projecting for the rest of the year. Anything you can point to in terms of product type or drug class that's driving that? Is it more mAbs, biosimilars, cell and gene therapy, just sort of dive into sort of where you're seeing the best opportunity?

Yes. I'll start on the kind of modality side of things, and then I'll let Jason maybe chime in on products. But yes, look, I think it's very much mAb-driven. In the first quarter, new modalities were dilutive as expected. We've talked about or cited this gene therapy headwind. As a result, I think we'll continue to view new modalities as dilutive for the year as well. With that said, if you look under the hood, we saw strength in cell therapy, which we've now seen for several quarters now. I think that's really encouraging, and we're seeing a lot of opportunities there.

And then if you look at gene therapy, ex that particular headwind, we actually saw growth in the quarter. So I think that's encouraging along with the fact that there's been 2 gene therapy approvals this year. So I think you put all that together, we continue to view new modalities as a strategic end market for us, and we are seeing opportunities in cell therapy. And ADCs aren't in that count, but I think we think about them similarly.

And from a product perspective, again, they cut across both mAbs and new modalities. So that's what's great as we serve both of those kind of equally across the portfolio. Again, talked already about the analytics growth. That's certainly going to be one of the things that we continue to lean on this year. In chromatography as well, a lot of good demand, a lot of good conversion of new customers. So again, this is that type of product where we're not very frequently competing with a similar. It's more about convincing customers that they can outsource what they most often do internally and the service and the value that we can bring for that, and we continue to see good conversion on that. So those are 2 areas in particular that we're really excited about. And proteins as well we should continue to have a strong year.

You talked about dilutive growth from new modalities and some of the effects there. Is that specifically 2026 dynamic? Is that a little bit longer? I mean it's still early in the year, but like how much visibility do you have into next year and beyond when that could turn to be growth accretive again?

I mean -- so again, we're still hurt this year by this -- by the gene therapy change. So that -- and like Jacob said, outside of that in the gene therapy space, we're actually growing. So we see it as kind of let's get through the anniversary of that headwind and overall, still very bullish on new modalities in total and particularly gene therapy.

And to be blunter there for people who aren't familiar, that relates to a specific customer, and we're assuming 0 in revenue from them this year. So I think hopeful that we won't have that headwind again next year.

You can't get worse than 0.

Yes, it's an easy comp, too, right?

There you go. Maybe one of the other lens that investors look at when I think about the business and the market is equipment versus consumables. You've had really good strength in consumables for a while. Equipment, a lot of focus on orders, lead times there, sort of a leading indicator. You talked about some improving equipment order trends later in the quarter. Just help frame the magnitude of that, how strong of a single data point that is being like week-to-week on equipment orders and book-to-bill and things like that. But how much should we be reading into that or not reading into that?

Yes. So I mean -- so if you take a step back, the guide assumes equal growth, right, low double digit for both of those segments through the year. So again, I think good equal contribution overall to our growth story. Consumables, again, has been great strength and will continue. The equipment, I think, is a bit of a tale of 2 cities. We've got -- and again, I've already referenced a couple of times now. So equipment [indiscernible] is absolutely being helped by the analytics side. So again, that upgrade cycle is a big piece of that.

We saw analytics up 50% in the quarter and 40% was organic, right, because we still have some inorganic from the 908 portfolio that we purchased from them. But so that's really been a leader. And then the other piece on the equipment side that's been a growth driver for us is mixers. So this stems from an acquisition we did at the end of 2023. We launched new products and really starting to see some good pickup on the mixing side as well. That's another place that just had some good luck in China too so those have been really the growth.

When you look at the, I'll say, the more traditional downstream filtration systems, that's where we're seeing more of a flat dynamic. This is where your question about kind of customer dynamics where we continue to see a good pipeline of -- in our funnel, right, of opportunities, but we're picking our analogy, but waiting for the tap to open or the dam to break, pick and choose what you like, but that we're still waiting for customers to start taking some decisions because we don't see it as a, oh, we're bringing in opportunities and we're losing them.

It's the decisions aren't being made and there's -- whether that's MFN digestion or kind of just some of the overall uncertainty in the overall pharma space. We see some of those decisions being delayed. And that's -- we talked about that in February, and that dynamic continues. But again, back to Jacob's point, with a broad and balanced portfolio, we're able to offset some of those lower points with other fast-growing products.

Why has analytics been so strong? Is this a comp dynamic? I think about portfolio refresh, new technologies? What's driving the extra investment there from your customers?

Yes. So it really is that portfolio refresh. I mean we launched a new generation of our -- this is our At-line device. So it's the SoloVPE PLUS that we just launched with upgraded features and technologies. And frankly, this is one of those areas where when Olivier came in, it was, well, what do you mean we haven't upgraded or launched a new gen of this after -- was it 10 years or 6 to 10 years old. So it's been a while. So we took that on, became a priority, and we're seeing some great traction.

So again, it's -- we all love new technology, right, our new next-gen of phone, et cetera. But again, it brings enough good capabilities, functionality that has been a real good success. There's a fair number of units out in the installed base that we've been the capture. We kind of see this as a tailwind for us probably over the next 18 to 24 months. And then also expect with that to be able to capture some new growth as well. So not just the upgrade and replacement cycle, but actually get new customers. And it's a broad customer base that we sell that to, right?

It tends to kind of -- the At-Line tends to be a little bit more on the TD side, but it's not -- it's big pharma, CDMOs, biotech, et cetera. So we've got a lot of good [indiscernible].

And you mentioned some of the larger, more traditional filtration systems still being a little bit touch and go. I mean what are we waiting there? Is this a capacity issue where there was a lot of investment there in prior years and you just don't need the extra capacity. Is this a reshoring dynamic? Sort of like what's the next step there?

Yes. I mean, look, we would -- we've characterized it as this MFN digestion, just kind of the pharma ensuring and understanding what are the priorities, some of the things that changes that we've seen with the administration and priorities as well and how to respond to those. I think our view is that the capacity will be needed, right? The end therapies and drugs that are ultimately being produced will continue to grow, and they'll need more capacity. And then it's just kind of deciding when and where, right? And I do think there's that everyone has talked about the opportunity with onshoring and that it makes sense to either expand or build out within the U.S. Again, the timing on that still seems to be somewhat of a question.

But that in the end of the day, even if a small percentage of the overall -- the onshoring opportunity is very big numbers. And so even if you got a small amount of that, we still think there's an opportunity for all players in the space. So I think it's just the timing that we're waiting for to see kind of what -- our funnel of opportunities continues to grow. And so now again, it's kind of when does the tap turn on.

Okay. And on a couple of other points you briefly touched on earlier from sort of like a customer segment perspective. Emerging biotech grew nicely in the quarter, but still sort of below historical levels. It's gotten really mixed data points on how biotech is playing out across the industry. What are you seeing there? And what's it going to take for that to fully come back?

Yes. So I mean, I think, first off, because we get asked a lot about this, right? Like clearly, funding was really good in the fourth quarter last year, I think really good in the first quarter, and it seems like April was really good. So I think that's certainly an encouraging kind of KPI, and I get why people ask about it. The reality is that they get the money, we then needed to get out the door, right? And so I think for us, we've had 4 straight quarters of growth from that customer base, which means one, the comps start to get tougher. But I think that suggests we're seeing stabilization.

With that said, if you look at whether it's dollars or our mix from that customer base, it was probably 8% or 9% of our revenues right now. Not that long ago, it was 10% of our business, if not a bit higher, right? And so that's where our view is. It's certainly encouraging trends there. Certainly I think there's an opportunity in front of us given the funding trends. But I think we'd like to see kind of more tangible evidence of that money being spent before we kind of declare that it's back. But certainly, we're under-indexed there versus where we were not that long ago.

I think for us, the question always becomes, as funding picked up, what's the timing, right? Does that translate to orders and sales? I know you've always kind of talked 6 to 9 months, maybe in today's environment that ends up on the longer end of that range. So that's what we're waiting for as well. But overall, we still feel like that segment will be a tailwind for us, but the timing and how that flushes through is, I guess, still to be.

Okay. And then you also touched on China in your opening comments, including the OEM partnership just to get a little bit more of a local presence. China seems to be rebounding strongly overall. Where are you seeing better performance there? If you could break it into what are the pockets of growth? And then I would just love to hear more about the OEM agreement and maybe next steps beyond that?

Yes. I mean, so number one, we firmly believe that biopharma in China is going to be a key leader, right, globally and will be a huge source of growth. And so really, I'd say we've been employing 2 elements of our strategy. Number one is we brought in new leadership, new team in many cases in our existing China country structure. And we're already starting to see, I think, some of the benefits for that. We've had our best quarter in the last 2 years in China on a very low base, mind you, and coming off of some share loss. But I think, again, we've got now a a much stronger team that's able to capitalize on the opportunities that we have.

And that cuts across a lot of pieces of the portfolio. So that's the kind of go execute and run what we got, right, and with the team we have, and we're starting to see some good momentum there. The second piece is now back more to our longer-term strategy, which is the OEM partnership. So again, our view is that to really be able to support and take advantage of the overall biopharma growth in country is to be more localized, right? And as I said, I don't -- our view wasn't let's go plant a flag, build a greenfield. It's how do we find the right partner to grow with. And so we've started -- they'll start manufacturing our products. We'll sell that, but it could evolve into a broader relationship, building more products. And certainly, we'll be able to to maybe leverage some of the local relationships that they have otherwise and be able to grow in different ways.

So we -- the question always becomes, okay, you bring in a partner. Is there a risk of technology IP loss? And our view is that we certainly took the time and vetted to find the right partner. We haven't announced the company, but we know the leaders. Our leadership and team have worked with them in the past. So they're trusted, known leaders in the industry. And our view is that there will always be a risk of IP loss, but you either sit out and watch and not take advantage of any growth in China or you participate and you manage those risks, and that's what really in our approach. And so we're really excited about what this translates to. And and allows us to play in a more localized way and take advantage of what we see is, again, is going to be a big biopharma growth in the region.

Is this one move -- you talked about local presence and having sort of that flag. Is this one move enough? Or do you need to do more? Does this get you everywhere you need to...

Well, I think for us, it's a step. Our view, again, depending on how it goes, would be to continue to expand with this partner in different ways. And so we see it as a first step of multiphases, which could be more products. It could be different relationships. It could be at some point, is there -- within Asia, there's other countries and regions that are amenable to trying to build products that you expand out. So there's a lot of different ways we could get there. So we kind of see this as a step one with that path to be defined.

Okay. Maybe along a similar line, let's talk about cash use, M&A portfolio evolution. You've got almost $800 million of cash in the books now. You've got a focus on capacity expansion, analytics, innovation. How are you thinking about M&A opportunities going forward? Any gaps you'd like to fill? Any opportunities should be up there from a valuation perspective?

Yes. So I mean, M&A remains a high priority for us. We still think that's the best use of our capital and the cash that we have available. We, again, are focused on finding technologies that are differentiated. We don't want to go down a me-too path. We -- there's gaps to be filled in our portfolio. We've shared those a lot, both on the mAb side, but then also opportunities to support new modality workflows. And so a lot of opportunity, very active in the space. We've also gone down the path of minority interest as well as investments.

So we announced Novasign earlier last year. So this allows us access to partnerships to new technologies, frankly, without sort of needing to deal with some of the short-term dilution that might come with earlier-stage companies. So we're really excited about what Novasign can bring, and we're open to that type of investment as well. So a lot of activity, a lot of opportunity. You got to -- it's all got to line up. They got to want to sell and we want to buy and all the pieces that come with it, but very active right now.

Okay. We got about 5 minutes left, if there's any questions from the audience if we can. All right. We'll keep going. Let's talk a little bit about margin progression and margin story from here. When you introduced the transformation office targeting some incremental margin. What are the biggest levers you have? And can you talk us through sort of what that ramp could look like over the next couple of years, the trajectory would be?

Yes. So again, I kind of made the point earlier that the transformation office is a way to formalize and I'll say, assign and dedicate the right resources to a lot of different priorities that we've been either working through or planning and it puts the structured framework around in a way to bring in, again, not only dedicate some of our internal resources, but also bring in some external experts to help us. We see it as a path for acceleration. So we've shared probably over the last year or more, this target to get to about a 30% EBITDA within 5 years.

But I also had shared often that we felt like '26, '27 were still more of investment years, and we would see, I'll say, an acceleration of that margin expansion in the latter part of that period. I think the transformation office and some of the benefits it can deliver for us is a way of accelerating that and pulling some -- I won't say it's linear, but making it less of a sort of a ramp-up at the end and put the framework. It's going to be focused on products in our portfolio. For example, we've talked about fluid management is one of the elements of the portfolio that is below average, right, for our product margins. And so that's one of the focal points which could be a design changes, material, it could be manufacturing, adding more automation, et cetera. And so outlining all those different opportunities that can drive it. And there's other things in terms of supplier, working with them. And then we also talked about beyond the margin expansion, the transformation office would help us on our Fit for Growth journey.

The big one in there is our IT modernization, right, making sure that we take more advantage of the systems we have today and then also rationalize some -- I mean, for our size company, we have way too many apps, way too many vendors, right? So how do we rationalize those? How do we start to align on common platforms. And then all of that as well as a push on our data management and infrastructure will be the foundation for us to build more AI from an internal benefit as well as how do we incorporate that into our products as well.

So that's why that's a really important one because it's the fit for growth, it's modernization. But frankly, I might get some savings as well when it comes to some of the rationalization on vendors. So really excited about this. I think, again, we said that we see about a point of margin expansion by the -- on a run rate basis by the end of '27. So we'll see some of those benefits. And then on a go-forward basis, we'll kind of see that full point from '28 and beyond.

Okay. Maybe one last big picture question for me. Just thinking about the markets and where we sit today and how we feel about bioprocessing market going forward. It's been really volatile the last couple of years. We talked about some of the moving pieces with some of the individual customer contracts and maybe some modalities. But you did 11% in the first quarter. You're guiding to 9% to 13% for the year. Taking a step back, everything that's gone on emerging biotech, pharma, [indiscernible] reshoring in China, has it changed your views on bioprocess long-term algorithm, long-term growth demand drivers?

Absolutely not. I mean this is -- this has an incredible tailwind behind it. Again, we see this year still kind of this digestion happening. And like I said, the pipeline and the opportunities continue to build up. We think we're well positioned to capture those opportunities in a different way than we ever have before with our broader and deeper portfolio as well as the relationships that we build. We've already -- we talked a lot about starting to actually have some swings at that for RFPs. We actually won recently. And so that's going to be the start of it. So we're thrilled. We're excited about the year and even more excited about the future beyond 2026 and the opportunities that we have.

Okay. All right. Well, with that, we'll have to leave there. Thanks, everybody for joining. Jason and Jacob, thank you.

Appreciate it.

And we'll provide financial guidance for the full year 2026. Join us on the call today are Repligen's President and Chief Executive Officer, Olivier Leo; and our Chief Financial Officer, Jason Garland. As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning risks related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K, our current reports, including the Form 8-K that we are filing today and other filings that we make with the Securities and Exchange Commission. Today's comments reflect management's current views, which could change as a result of new information, future events or otherwise. The company does not oblig or commit itself to update forward-looking statements, except as required by law.

During this call, we are providing non-GAAP financial results and guidance, unless otherwise noted. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Repligen's website and on sec.gov. Adjusted non-GAAP figures in today's report include the following: organic revenue and/or revenue growth, cost of goods sold, gross profit and gross margin; operating expenses, including R&D and SG&A, income from operations and operating margin, other income or expense, tax rate on pretax income, net income, diluted earnings per share, EBITDA, adjusted EBITDA and adjusted EBITDA margin. These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to best reflect the performance of our ongoing operations.

With that, I'll turn the call over to Olivier.

Thank you, Jacob. Good morning, everyone, and welcome to our 2026 first quarter call. We are delighted to share our first quarter 2026 results. Great execution once again by our team enabled us to deliver 15% reported revenue growth or 11% organic and 160 basis points of adjusted

operating margin expansion. Mid-teens top line growth, coupled with disciplined cost management resulted in margins outperforming expectations. In addition to our strong financial performance in the quarter, we advanced several key strategic priorities. This includes the launch of our transformation office, the associated sale of the polymer business and a new partnership in China. This OEM relationship advances our strategy in the country where we are seeing significant growth again.

I'll touch on each of these initiatives in more detail shortly. As I reflect on our end markets and company today, it's encouraging to see the strength we are seeing across all of our customer segments. The talented and experienced team we have assembled is executing fiercely on our differentiated strategy. This has resulted in a very rich high probability opportunity funnel that just needs to be coupled with faster customer decision-making. We did see encouraging signs in the first quarter, and remain convinced that capital equipment tap will open.

We delivered $194 million of first quarter revenue, driven by healthy demand across our broad portfolio and all geographies. Analytics led the way with 50% plus growth, but all of our franchises grew nicely again in the first quarter. Consumables, including protein, grew double digit which was coupled with solid capital equipment growth and services remained a standout with 30% plus growth.

Capital equipment demand benefited from strength in Analytics, mixers and easier comps. We also saw growth across our diversified customer base in all geographies. Order trends were solid in the first quarter with a significant pickup in March and included some conversion of our robust capital equipment funnel. Our first quarter results and these recent order trends reinforce our confidence in our full year revenue outlook. Jason will provide more details.

We are reiterating our expectation for 9% to 13% organic growth, while updating our reported revenue guidance to reflect the sale of our noncore and low-margin Polymem business. This reduces our full year revenue outlook by $7 million, but improved our margin outlook. In addition, given our strong first quarter performance, while increasing our adjusted earnings per share guidance for the full year. We remain excited about our differentiated product portfolio, the global team we paired and the strategy we're executing.

As we look ahead to the next several years, we see a number of opportunities across our portfolio that position us for robust growth and allow us to continue to outpace the market. Looking at our performance by end market, we saw widespread strength across our customer base. CDMO revenues grew mid-teens with similar growth across both Tier 1 and Tier 2.

Biopharma revenues also grew despite a very difficult comparison. We saw notable growth outside of large pharma, including 20%-plus growth from emerging biotechs. We continue to be encouraged by growth from this customer base, though demand remains below historical levels. OEM and integrated demand was very robust given growth in fleet management.

From a geographic point of view, we saw strength across all regions led by Asia Pacific. This included a near doubling of revenues in China with our best revenue quarter in the country in over 2 years. This is a testament to the team we've put in place. Asia Pacific remains a key strategic region and I will discuss the progress on our strategy in China shortly. As expected, new modalities were dilutive to growth given the gene therapy headwind we previously discussed. We continue to see healthy growth in cell therapy and also in gene therapy when excluding that specific headwind.

I wanted to update you on the following 3 strategic initiatives: First, as we have emphasized recently, we are committed to expanding margins, while banking the efforts needed to support future growth. In an effort to accelerate both of our Fit for Growth journey and our path to 30% adjusted EBITDA margin by 2030, we've formed a transformation office that will ensure with the right prioritization and resources focused on these critical initiatives.

Key focus areas under this program include a force to optimize our manufacturing footprint for increased cost efficiency, improving the profitability of certain product lines through targeted productivity and rationalization, continuously improving service to our customers and efforts to capture the value of our differentiated products; and finally, acceleration of our IT modernization and AI implementation across all functions. Jason will walk you through more details.

But in terms of financial impact, we estimate this effort should result in at least one point of annualized margin benefit by the end of 2027. We remain committed to our goal of doubling the business and expanding margins while further progressing our Fit for Growth capabilities. The transformation office will enable us to achieve and accelerate all of these. So most of these initiatives have just picked off, we're happy to share that as part of this effort on March 30, we divested the Polymem operation in France for nominal proceeds.

While this facility was a key contributor to Repligen's ability to supply product during the pandemic, the business has since reverted to noncore sales outside bioprocessing and has operated at a net loss. In 2025, Polymem generated $7 million of revenue and an adjusted operating loss. The new owner will offer synergies in the common market in which they operate.

Second, we remain more excited than ever by our growth opportunity in Asia. In fact, Jason and I recently returned from a week-long visit to the region where we met with both key customers and our Asia leadership team. We are building a great team and continuing to gain traction with key customers in the region. We are also thrilled to announce that while in the region, we signed a critical partnership to expand our capabilities and local presence in China. The partnership outlines an OEM relationship that will increase our competitiveness and access to local manufacturing beginning in 2027.

It will be a multiphase and multiproduct arrangements that we expect to expand over the coming years. After our trip, we have more conviction than ever that China will be a meaningful player in biopharma for years to come.

Finally, I want to comment on our IT investments and digitization journey. On our last call, we mentioned investment in our IT organization in 2026 as part of our Fit for Growth journey. We have made key additions to our team this year, including new data management and AI experts. We have implemented AI across a variety of functions including, but not limited to legal, commercial and supply chain. And as part of our transformation office, we are also working to further optimize our data infrastructure which will allow us to better implement AI in the coming years.

To support our customers, our analytics franchise is well positioned for an increasingly digital environment. Our PAT product portfolio allows for the collection of both upstream and downstream data in real time. We have integrated our FlowVPX into our downstream filtration system and are working to replicate this on the upstream side.

We announced a partnership with Novasign last year and are working to integrate their digital twin capabilities into our next-generation small-scale filtration systems. We see digitization as a multiyear journey, and it [indiscernible] a key strategic focus area for our company.

Before I turn the call over to Jason, I'll provide some more detail on our franchise level performance. Starting with situation. Revenue grew mid-single digits on a reported basis in the quarter, driven by Fluid Management, ATF and other consumables. Excluding the gene therapy headwind, this franchise would have delivered double-digit growth.

With the sale of Polymem, we now expect filtration growth to be roughly mid-single digits in 2026 on a reported basis. This also contemplates a moderated ATF outlook in 2026 due to customer-specific timing dynamics that are expected to be a tailwind in 2027. As a result, we see ATF returning to strong growth in 2027 and beyond, and we continue to see overall healthy consumable demand across our portfolio.

We remain extremely confident in our process identification leadership position. After over a decade of seeding our ATF technology, we have built a high amount of trust from the biopharma industry. We will continue to prioritize further innovation and advancements that will allow us to remain the industry's partner in process in densification.

Chromatography revenue increased over 25%, driven by growth in OPUS columns. We continue to win new customers globally as they appreciate the plug-and-play convenience of prepacked columns. Given the traction we are seeing in OPUS we now expect 20% plus growth in chromatography in 2026. With this outlook, we do expect a slightly higher mix of chromatography revenue versus our initial expectations.

It was a great quarter in proteins with mid-teens growth on top of a very strong prior year comparison. We saw healthy demand across our offerings, led by our ligands, reflecting the benefits of the strategy we put in place to control our own destiny in proteins. We expect protein growth of at least low double digits for the year. Our Analytics franchise had another phenomenal quarter with 50% plus growth. This was led by notable strength in our downstream analytics offering, which had a record quarter. This benefited from strong demand for our SoloVPE PLUS, including new placements and upgrades.

We continue to assume Analytics growth of 20% plus given momentum in downstream demand and a growing contribution throughout the year from our upstream Analytics offering. To wrap up, we are very pleased with our start to 2026. We delivered 11% organic growth in the first quarter, which is right in line with the midpoint of our full year guidance. This coupled with operating expense discipline has reinforced our confidence in our full year revenue outlook and enabled us to increase our adjusted earnings per share guidance. In addition, we made tangible progress on our strategic priorities, which positions us well to drive robust growth and margin expansion in coming years.

Now I'll turn the call over to Jason for the financial highlights.

Thank you, Olivier, and good morning, everyone. Today, we are reporting our financial results for the first quarter of 2026 and providing updated guidance for the full year 2026. Unless otherwise noted, all financial measures discussed reflect adjusted non-GAAP measures.

As shared in our press release this morning, we delivered first quarter revenue of $194 million, reported year-over-year increased 15%. This is an 11% organic growth, excluding the impact of acquisitions and foreign exchange. Foreign currency contributed 3 points of growth and we had 2 months of inorganic contribution from our upstream Analytics acquisition.

As Olivier offered details on our product franchise performance, I'll provide more color on our regional performance. Starting with quarterly revenue mix. North America represented approximately 46% of our total. EMEA represented 37% and Asia Pacific and the rest of the world represented approximately 17%. North America grew mid-single digits, driven by OPUS and Analytics. EMEA grew more than 20%, driven by proteins in OPUS. In Asia Pacific grew more than 25% driven by ATFs, mixers and Analytics. And as previously mentioned, we had very strong growth in China.

Transitioning to profit and margins. First quarter adjusted gross profit was $108 million and adjusted gross margin was 55.5%. This was 180 basis points of margin expansion versus last year. The year-over-year increase was driven primarily by volume leverage, pricing execution and favorable product mix, all of which more than offset inflation and tariffs. The favorable mix was driven by growth in our Analytics business and certain accretive filtration products.

In addition, first quarter gross margin also benefited from cost absorption timing associated with production levels required to support the sales ramp through the year. We expect this benefit to normalize over the remainder of 2026. Continuing through the P&L, our adjusted income from operations was $30 million in the first quarter, up 28% year-over-year on a reported and organic basis.

OpEx grew 11% on an organic basis. We remain thoughtful about balancing investments in the business while expanding margin. We expect some additional investment in the second quarter. This translated to an adjusted operating margin of 15.4% in the first quarter, which was an increase of 160 basis points year-over-year on a reported basis and 200 basis points of margin expansion, excluding M&A and the impact of foreign currency.

Adjusted EBITDA was $40 million in the quarter or just under 21% adjusted EBITDA margin. Moving to the bottom line. Adjusted net income was $27 million, a 22% year-over-year increase. Higher adjusted operating income was offset by slightly lower interest income on declining interest rates. Our first quarter adjusted effective tax rate was 22%, which starts the year on the low end of our full year guidance, which remains unchanged.

Adjusted fully diluted earnings per share for the first quarter was $0.48, compared to $0.39 in the same period in 2025 or an increase of 23%. Finally, our cash and marketable securities position at the end of the first quarter was $785 million, up $17 million sequentially from the fourth quarter. This was driven by $20 million of strong cash flow from operations, offset by $5 million of CapEx in the quarter. We remain focused on optimizing our working capital to drive improved cash flow conversion.

I will now speak to adjusted financial guidance. As Olivier mentioned, we are reiterating our organic growth guidance for full year 2026, while updating guidance for the sale of Polymem and our first quarter results. Our guidance also assumes a couple of million dollars tariff surcharges in 2026. We are now guiding $803 million to $833 million of revenue or 9% to 13% growth on both a reported and organic basis. Our updated guidance now reflects only one quarter of revenue from Polymem which removes approximately $7 million of revenue from the full year, previously included in guidance. This continues to assume just under one point of benefit from foreign currency, which we realized in the first quarter.

Our reported growth of 9% to 13% assumes the following: mid-single-digit growth in Filtration, greater than 20% growth in Chromatography, Proteins growth greater than low double digits and 20% plus growth in Analytics. We now expect 110 to 160 basis points of gross margin expansion for the year. This assumes a slight benefit from the divestiture, partially offset by higher Chromatography mix and limited impact from the conflict in the Middle East. With the strong Q1 performance, the sale of Polymem and judicious management of OpEx, we are raising our adjusted income guidance.

We now expect $124 million to $132 million of adjusted operating income. This implies 160 to 200 basis points of operating margin expansion which represents a 30 basis point increase at the midpoint versus our prior guidance. Continuing through the P&L, we now assume $90 million of adjusted other income and continue to assume a 22% to 23% adjusted effective tax rate. Putting this together, we expect adjusted fully diluted earnings per share to be between $1.97 and $2.05, this is up $0.26 to $0.34 versus 2025 or up 18% at the [indiscernible] and $0.04 higher than our prior guidance at both the low and high end of the range.

To assist with the quarterly cadence, we expect Q2 organic revenue growth to be similar to the first quarter. As a result, our guidance does not require a second half acceleration to achieve the midpoint of our full year outlook. We expect second quarter gross margin to be slightly below our full year guidance range and OpEx to pick up slightly sequentially following our disciplined OpEx control in the first quarter.

We expect second half OpEx to be similar to 2Q. As a result, we expect solid operating margin expansion in the second quarter, while the third quarter will likely represent the lowest margin quarter of the year. Our balance sheet remains strong as we ended the first quarter with $785 million of cash and marketable securities. We will remain prudent in our spending while maintaining substantial dry powder for potential acquisitions. We expect CapEx spend to be approximately 3% to 4% of 2026 revenue.

Before we wrap, I wanted to briefly follow up on the transformation office that Olivier shared earlier. We are thrilled to establish a team of both internal and external experts to drive focus improvements in areas that will drive our fit for growth capabilities and margin expansion. This is a change in mindset that reinforces the structured framework is required to drive margin expansion beyond volume leverage.

As Olivier shared, we expect to see meaningful benefits from the initiatives. We are still finalizing the detailed scopes and benefits, but expect to generate at least one point of annualized margin benefit by the end of next year and continue into 2028 and beyond. We will see benefits in both gross margin and at the EBIT and EBITDA level. We see this effort accelerating our path to our 2030 EBITDA target.

In other words, our path to reaching 30% adjusted EBITDA margins will be less weighted to the out years than previously communicated. We expect nonrecurring charges of approximately $5 million to $6 million through 2027 associated with this effort. These will be excluded from our adjusted non-GAAP results. Finally, Olivier and I would like to thank our Repligen teammates for delivering a strong start to 2026. We continue to be energized by the opportunities ahead, and we are focused on advancing our strategic efforts in 2026.

With that, I'll turn the call back to the operator to open the line for questions.

[Operator Instructions] Your first question comes from the line of Dan Arias with Stifel.

Jason, nice start to the year on the op margins there. Obviously, you went through some of the moving parts, but can you just maybe summarize what within the quarter was sort of incidental, I guess, you could call it mix elements, timing of cost items versus more of a reprioritization that sounds like maybe it's starting to be in play here? And then like along those lines, the transformation office impact, I know you said you're still working through the moving parts there, but is the right way to think about that, the normal 1 to 200 bps of annual op margin expansion that you've been talking about, plus the impact of transformation, is that like [ 100bps ] to fiscal '27? Or are you kind of run rating by the time you get to the year at the end of the year at 100 bps. I just want to make sure that we get the modeling element of that whole exercise right.

Olivier here. I'm just going to kick it off and then let Jason give you more details. I mean we're obviously extremely happy about how we delivered on margin expansion in quarter 1, but beyond quarter 1, obviously, being able also to have line of sight of further improvement towards the rest of the year as well. And yes, you're right, the transformation office is an initiative like we've been thinking about for a long period of time. Now that we have the right people on board, we said that's the right time to kick it off. And as you'll hear from Jason in a few seconds, it's really a mix of getting acceleration on the fit for growth side, but also accelerating margin improvement. But Jason, yes?

Yes. So Dan, great 3 questions, a lot of pieces, and there we'll go through it. So yes, I'm really happy with the first quarter gross margin and overall margin performance. I think to your question, the driver really was volume, volume leverage price. So continuing to execute that. And to your point, strong mix really from Analytics growth as well as a few of the, I'll say, product lines within our overall filtration franchise.

There was a timing element to your point on a little bit from timing of cost absorption that will unwind through the year. But overall, it sets us up for well and high confidence in our guide for expanding gross margin by about 110 to 160 bps for the year.

From a profile perspective, Yes, we do expect 2Q to be lower than 1Q. 3Q may step down slightly from that as well. And then fourth quarter back higher as we grow on volumes through the end of the year. Most of that change will be driven by the mix phasing. So here's what I'd say, though, on a total year versus -- a total year, a full year versus full year basis year-over-year, mix is still a neutral dynamic for us. But for the first quarter being positive, we'll see some mix headwinds in the second and third and then again, fourth quarter steps back up mostly on higher Chromatography sales.

And to your point, again, that cost absorption unwind. So again, a real great start and puts us right on track to our guide, lifted it up a little bit with Polymem. On the transformation office, yes, again, great questions as well. Look, I'll start by, it's really about creating the structure program where we allocate the right resources to our priorities. So there's a a real heavy fit-for-growth execution and developing the capabilities we need and then the margin expansion side. That one point of annualized margin expansion by end of '27, think of that as more in the run rate, we'll have various settlements and projects that will, I'll say, come into initiation over several months, right? We haven't assumed anything in 2026 yet but there may be some benefits that we'll share later in the year if they come in early, but we're really expecting a run rate to start by the end of '27 and then kind of seeing full benefits in '28.

To your point, that's going to be on top of our normal run rate. And that was the message that we tried to share and here as well. Again, we've talked a lot about this path to 30% EBITDA target by 2030, but that we would be more weighted towards the back end. We think this initiative helps us to be less weighted in those out years, which brings some incremental in the earlier. So I'm really excited about all this. Great start to the year.

Your next question comes from the line of Doug Schenkel with Wolf Research.

This is Madeline Mollman on for Doug. Just a question on equipment. You mentioned that there was a pickup in equipment in March. Where was the strength most notable? Was it by category and customer type? And did that help you in the quarter? Or was it more the order book? And then I think last quarter, you mentioned that there were some RFPs you were waiting on. Have you started to hear back on those? Or do you feel that pharma companies are still digesting some of the MFN deals?

Yes, good questions. I mean capital equipment increased year-on-year in quarter 1 on what was pretty easy comp to be very open. And that was mostly driven by strength in both Analytics and mixers as well. We've partly seen a nice pickup of mix of demand in China, which is one of the reasons why China did so well for us in quarter 1. And similar to peers as well, we've seen orders increasing in the quarter. I mean, after what was maybe a bit of a slower start in January up to mid of February, we've seen a real acceleration of order intake towards the second half of the quarter and partly on the capital equipment side. And we realize pharmacy taking their time, but it was good to see indeed finally some answers coming and positive answers. And to your last point on RFP wins, yes, we start to win some of the RFP. We answered two towards the end of last year, which is for us very encouraging. As I mentioned previously, we didn't really have seat at the table before.

So overall, very encouraging and we would like to see further acceleration of decision-making, but definitely going in the right direction right now.

Your next question comes from the line of Matt Larew with William Blair.

You called out 20% growth from emerging biotech, and that comes off a very -- 3 very strong quarters to end 2025. You did reference it's still below historical levels. We're now working off the back of two straight quarters of strong funding data. There's been some positive clinical updates. You're going to be escaping the one large customer headwind. So Olivier, just curious for your take on sort of what's remaining to get emerging biotech back to strength and how you feel about the momentum over the last couple of quarters?

Yes. obviously, very happy to see the fourth quarter in a row of very significant growth for that customer segments. I mean, I've said like we've seen in each of the segments coming back one after the other, and that was the last one. to be still fair. I mean, quarter 1 comps were pretty easy still. So I want to see quarter 2 still showing exactly the same growth. But overall, it sounds like this market segment is back to a much more normal type of behavior.

And you're right, the customer -- the biotech funding numbers also look very good. I mean, quarter 1 was almost double what it was last year. And April was very strong. I mean I think I've seen numbers around USD 10 billion funding in April. So the good news is we've seen really a nice rebound, we're still of the opinion that the money that has been injected has not reached yet all of these guys fully to the extent that they are spending much more money.

So to your point, yes, what we've seen should hopefully be very sustainable, and we're hoping to see a similar type of growth over the next few quarters for emerging biotech. But definitely something that we are very excited about fourth quarter in a row, very nice growth here.

Your next question comes from the line of Philip Song with Leerink Partners.

Two question. This is Philip on for Puneet. You mentioned China nearly doubled in Q1 [indiscernible] low base after just 2 quarters of growth in the second half. And I think, 2% to 3% revenue contribution. I was wondering if you could just unpack this some more just how much impact was from the OEM partnership kind of what's the composition between large pharma and CDMOs? And I guess, how would you characterize how much was order timing versus sort of genuine demand acceleration?

Yes. Philip. Absolutely delighted about the way quarter 1 played out for us in China. I mean you've heard me talking about it quite a lot over the last several quarters and it was actually also to almost see a doubling of our sales in China in quarter 1. You're right, it was on very low comp. What I'm even more excited about, to be honest, is our funnel looks really very strong. I mean Jason and I were in the region recently, we spent almost a week with the team down there, and we're seeing a funnel that looks really very strong across all of China right now, and that's very exciting.

By the way, talking about China, all of Asia did very well. I mean that was our fastest-growing market geographically in quarter 1. But obviously, to your question about the OEM partner, I mean this has no impact yet. I mean, we literally just signed the agreement a couple of weeks ago. So we're going to take transfer different part of our portfolio, particularly on the filtration consumable side, and we expect those guys, those partners to be up and running probably towards the beginning of next year. But it's never really black and white. And where you're somewhat probably clear asking the question is, it's a good strong signal we're giving to customers in China that we are back and that we're going to really reclaim our market in China with that partner, but also we really want to be part of that huge upcoming market growth we're seeing in China over the next several years.

So there might be already a little impact that people feel like, wow, Repligen is going to become really indeed a very strong actor in China for China. And that's why we're delighted about that agreement. It is just a first step, Philippe. I mean we are looking at expanding that collaboration and potentially with other partners as well in China over the next several years, but very excited to be back in China.

Your next question comes from the line of Casey Woodring with JPMorgan ahead.

So you had a one point organic beat in 1Q and expect similar growth in 2Q, but you kept the low end of the full year guide unchanged. Maybe just talk about how much of that is driven by the moderated view for ATF in the second half versus the rest of the business?

And then on ATF, could you provide more color on the customer timing dynamics that are driving that more moderated view in the second half. I think in the past, you had talked about a second half ramp in ATF consumables tied to one of the blockbusters you expect in 2. So is that really just a function of a customer commercial launch? And then what gives you confidence that things will pick up in '27?

Yes. So, first of all, I mean, we're obviously very happy we started quarter 1 at the midpoint of our full year guidance. As you heard us saying we estimate quarter 2 will probably be about the same. So obviously, it will set us up very well for the guidance we've given at the beginning of the year. And the midpoint would assume at this stage like there is no need for any acceleration towards the second half of this year, which is probably a little bit of a Repligen, specific situation that we are very happy to be in right now, it's a really high comfort zone for us from that point of view.

So we would be disappointed if we would land at the low end because that would somehow imply a softening of the market that we're actually not seeing today. So we are more hopefully looking at [indiscernible] the high end. And in order to reach the high hand, we would need some type of acceleration both of our Consumable business, and you mentioned ATF, I'll come back to that in 10 seconds.

But also said that some of these equipment orders we've been receiving now in the last couple of months, would also be potentially delivered this year, which is not a given yet because we need to hear about our customer site preparedness to be able to accommodate that or not. So that cannot really the way to look at the guidance for this year. We're quarter into the year with a very strong start with a couple of more calls, we'll know much more about how the year is going to play out by the end of July when we report out on quarter 2.

In terms of ATF, yes. I mean, we have always been very transparent. I mean, we were transparent last year about what happened with that specific gene therapy program, we said we're going to be transparent has got a huge runway for the next several years. I mean I can tell you, we are more bullish than ever. A couple of our customers came to us beginning of this year, explaining as they were managing inventory this year on a couple of commercial drugs that have been using ATF now for a few years. This is not something unusual for what is still a pretty new technology where at the beginning, people built a little bit more stock maybe than they will need finally. We know it's going to be a real tailwind for us from '27 onwards because these are 2 commercial drugs, that will require more because the drugs themselves are growing very nicely. So it's really just a temporary inventory management that we are facing.

What we think about those two customers is, in fact, they are implementing ATF across many more products than this specific commercial drug I was talking about, which is why we know next year, it's going to be a real tailwind for these customers for the commercial drugs themselves, but also across the new one, they are implementing ATF right now.

Your next question comes from the line of Daniel Markowitz with Evercore.

I wanted to follow up on emerging biotech. It's good to see 4 quarters in a row, if I heard correctly, of growth from this customer segment. And I wanted to talk about the benefit from biotech funding recovery, which seems like it could flow through to back half this year and help in back half in 2027. Can you help frame the potential timing of when this benefit might occur? Remind us your exposure to this customer set and help us understand what the contribution could look like once we start to see that benefit?

Yes. I think you nailed it already pretty well. I mean fourth quarter in a row of very significant growth. I mean, I would say, very significant growth in quarter 1 was above 20% of growth. This being said, the activity level still remains slightly below historical level. So that's why we're saying it's probably a little bit too soon to call it a trend. But maybe to be a bit more specific, we mentioned in previous call, like we some of the growth coming from some of the small biotech getting acquired. That was particularly the case in quarter 2, quarter 3 of last year. It's fair to assume that some of the funding that we started to improve towards quarter 3 of last year, has maybe started to reach some of these company toward the end of last year and probably a little bit more in quarter 1.

I do expect it to become real stronger tailwind from quarter 2, quarter 3 onwards to be confirmed, but that's what we could expect, we would expect looking at this much better biotech funding environment we've been experiencing. And to answer your specific question, I mean, it's still lower than 10% of our total sales. I won't say more into the 8% to 9% vicinity in quarter 1, but probably trending back to the 10% that we experienced in the past -- in the next few quarters, I would [indiscernible].

That's helpful. And then just a follow-up. Can you talk about the ATF opportunity more broadly? Like how penetrated is this market? And how would you frame the potential impact from competitive product introductions?

Yes. No. I mean, again, let me start by saying ATF grew in quarter 1, both, by the way, in capital and consumable as well. And we've just decided to moderate our expectation for 2026 because of this transitory headwind that we've been hearing from the 2 specific customers. But apart from that, I mean, we are still extremely bullish. I mean we were getting our products designing in multiple new products, multiple new modality as well. I mean we've talked about successes we've had on the cell therapy side, and that has become a very significant tailwind for us over the last several quarters.

We are also very heavy on innovation. And I tell you, I'm very, very confident about the fact that were going to be leading the process intensification for the next several years. I mean I have 0 doubt about that. And we've got a lot of innovation being worked out right now with several launches that we expect to happen probably towards one toward the beginning of next year and then 1 or 2 others towards mid or end of next year. So we are absolutely very bullish. And as the runway on ATF is still absolutely very strong.

Your next question comes from the line of Mac Etoch with Stephens.

Maybe just following up on some of the previous order related questions. Just looking at what you called out during March, can you just unpack what specifically changed in the order environment at that point? Was it tied to improving customer decision-making, budget releases, increased activity within certain [indiscernible] like maybe Analytics or upstream systems? And how is that exit rate carried in April at this point?

Well, it's a little bit of all of that, to be honest with you, but maybe let me take one step back. So you're right. I mean we had a little bit of -- well, taking two steps back a fantastic quarter 4 in terms of order intake. And then really when I say fantastic, I mean, it was like in [indiscernible], we have not seen like for probably the previous several years and so on. So it was somehow pretty expectable that the beginning of quarter 1 would be a little bit softer. But then towards mid of February, we started to see a really significant acceleration that has enabled us to deliver a very strong order intake for the full quarter 1 really in the right zip code in terms of book-to-bill like what we expect for the previous several quarters.

So really across the board, very healthy quarter 1, thanks to what happened in March. What's more important, honestly, than order because we said it can be somewhat a little bit lumpy. As you know, what's tracking our funnel. And I won't say we are really extraordinary discipline on the way we are tracking our funnel. And one part of the funnel, I'm looking at myself on a weekly basis what we call the high probability funnel, which is a probability that is above 50% closing orders within the next 2 to 3 quarters. And I mean, probably at the highest level ever. In fact, I just made the exercise a week or 2 ago, looking at how it looked versus what it looked like a year ago, and it's significantly higher than what we've seen a year ago.

So from that point of view, we are very confident about the way things are going to play out for the next several quarters. what we're not still controlling fully is decision-making. And that's maybe where indeed, I would still see a bit of a difference between consumables and equipment, both look really good for this year. I mean, in terms of guidance for the full year, we see like both grew double digits in sales. But obviously, most of the headwinds we've talked about are going into consumable, as you know, meaning the gene therapy program on one side and then these two ATF customers on the other side. So it means like consumables are still doing extremely well.

On capital equipment, it's fair to say like Analytics and mixers have been leading the pack. We would like to see a real acceleration of what we call the bigger type of CapEx equipment. We started to win some of these RFPs. As I mentioned earlier, if the tap of capital equipment really opens, this is going to be a massive opportunity for all of us. And I'd say Mac because the water is just waiting for the tap to open, and then it's going to become like a totally different story for tool provider.

So that's kind of really a long answer to a short question, but across the board how we're seeing order intake and how we're seeing a different part of the business between consumable and hardware.

Your next question comes from the line of Paul Knight with KeyBanc.

When you look at the China market right now, is this domestic demand or is it multinationals expanding their bioprocess capabilities in that market?

Paul, yes, I have to say at this stage, the vast majority, and I say last majority, at least what I have a good line of sight of is really China, local demand market that's coming back. And we've had a lot of successes. I mentioned mixers already a couple of times. But beyond mixers even on our filters, consumable and so on, we're seeing a lot of these customers coming back now. As you know very well, we are facing much more competition than we were before, which is why we've been pushing and now implementing that strategy that I think it's very different, very differentiating as well versus what others might have been doing, where we are really going to capitalize on local company to help us gaining our market back.

I've said several times, the China market today is totally different than it was 5, 5 years ago, even maybe 3 years ago, even to a certain extent, you want to subsidy in China, you have to appear to be much more really Chinese than you were before, and that the only way you're going to be able to defeat competition locally. We found a part that we like a lot because we know the management team pretty well, but also they are still in the early phase of growth. And I've seen so many of these companies being successful over the last several years that collaborating together, we feel we have got an incredible runway over the next several years. But the demand is really from Chinese company Chinese local demand, which we know is going to grow very significantly over the next several years now with all of the money that has been injected into the China ecosystem.

Your next question comes from the line of Brendan Smith with TD Cowen.

I wanted to actually ask just another one on the transformation office a bit. Any more granularity on what kinds of margin optimization efforts you really have going on there? I guess are you focused on certain segments more than others? I know you mentioned some AI process involvement. So I guess just wondering if there's any potential for some of the relative margins across your different segments and maybe close ranks a bit from some of the historical spread we've seen?

Yes, Brendan, good question. So we highlighted kind of 4 buckets. One is manufacturing footprint in terms of how to optimize that. So that, of course, will hit either different product lines or help us drive efficiencies across the overall network. The other piece, to your point is really this improving profitability on certain product lines. So that's examples of where do we look at our portfolio? What's dilutive to the overall average? And how can we look at design changes? How can we look at manufacturing efficiencies, to your point, how do we look at the the product SKUs that we have to try to raise that overall.

And then it's things like Polymem, again, where we saw that a noncore product, not even within bioprocessing and not only dilutive at the margin, but a loss at the bottom line. And so that's fairly unique, though. So just to caution you in terms of opportunities at that level, but it's absolutely about finding the below-margin products and then increasing those.

The other pieces is also around how do we serve our customers better, how do we get more value. So again, you might see that within the product lines. And then the other big bucket is this topic of IT modernization as well as AI. And we kind of keep them connected but also have a very different path on each of those. We've talked a lot about the need to to upgrade our IT infrastructure.

It's data, I'll say, optimization -- it's looking at the -- when you look at the number of applications and vendors we have for our size company, we can rationalize that. That's the type of thing that actually drives synergies and cost savings. But always bring, how do we leverage SAP, our ERP as well to to get more out of that. And then from an AI perspective, it's a balance of looking at the tools that are available, but then also going back into each process and function understanding the problems that we're solving and the use cases for those AI, I'll say, solutions. And so incredibly exciting for us.

Again, this is about allocating the right resources focusing internal experts as well as bringing external experts to help us accelerate that. And again, it's just another example of kind of the long game that we're playing on both margin expansion as well as being able to grow in scale.

Your next question comes from the line of Matt Stanton with Jefferies.

Maybe just one in the context of the order commentary and then the kind of high probability funnel that you laid out, Olivier. Can you just remind us in terms of your equipment portfolio and the order book there, how quickly you turn that? I think historically, you had kind of talked about earning 2/3 of the order book in 6 months or less. I think it would be helpful to kind of get an updated number on that given the evolution of the portfolio as it relates to about what could maybe show up in orders today and income and revenues in the back half of the year versus 27. It sounds like mixers, analytics, some of those are maybe shorter cycle type equipment than the larger projects you talked about late but would just be helpful to kind of level set the order book, how quickly you think you can turn that today and how that maybe has evolved from a couple of years ago.

Matt, I think you answered your question very well. So I'll try to add some more details here. But you're absolutely right, like we've got very different type of hardware in our portfolio. So the 2 you mentioned, you're right, both mixers on the one side and analytics on the other side, turnaround time is very short. I mean, in fact, for analytics, typically you can even turn around an order within a couple of weeks. So for mixers and here, I would differentiate what we call the stainless steel mixers, which is what we acquired when we 5 years ago from the single-use mixes, this time are slightly different.

For the stainless steel side, we are like below 3 months. for the single-use mix, we would probably be a little bit more than 3 months. And so there is a slight difference here. and then comes what we call well, even within the larger scale type of hardware, there is still a difference. For ATF, system very often we are capable to turn around delivery in 3 months or even less some time if we've got no customization to achieve for downstream system, whether TSF or Chrome system, it really depends again whether it's catalog type of product or whether it requires some customization.

If it's catalog, turnaround time can also be in the range of 3 months. also if it's custom probably more into the 5 to 6 months range. But what's becoming probably more important than our own lead time is really customer preparedness. And especially now that we start to enter into these onshoring projects more and more we will see probably very different cases where people already have brownfield or people need to build everything from scratch.

And then this is what we don't control fully where our lead time might be absolutely enabling us to recognize those revenues this year it might well be that those sides are only ready by mid of 27% or even maybe second half also.

And as you know, when I mentioned about the blockbuster, we had -- we won a couple of years ago now on ATF, I mean it's a specific example where the customer size is still just being finalized right now. So what we don't control fully is customer preparedness and especially with ensuring that, that's something we're all going to have to figuring out better in the upcoming few quarters here.

Your next question comes from the line of Matt Hewitt with Craig-Hallum Capital Group.

A great start to the year. Analytics is becoming a much bigger demand area for your customers, whether it's the CDMOs or the pharma companies. You're seeing increased demand. You're speaking to some of the growth that you're seeing there. From an investment standpoint, -- where do you see opportunities to invest in that area, whether it's real-time monitoring or taking some of the data that you're capturing and kind of helping your customers identify areas for improvement. Is this an area that you're investing internally is an area that you see from an M&A perspective, maybe augmenting some of your existing capabilities? Any discussion there?

Yes, Matthew, great question. I mean, obviously, as you mentioned, we're really excited about the traction we're seeing on process analytics. I mean, 50% growth in quarter 1, 40% organic credit, downstream analytics. I mean we've never seen that before. In fact, historically, quarter 1 was always a weaker from a seasonality point of view. So that was really obviously an incredible performance.

And you're asking absolutely the right question, what are we doing to make sure we capitalize on that and we even can double down on that over the next several years. So first of all, you know, we said that upgrade cycle is just still at the beginning. So going to be a tailwind for us for the next several quarters, if not probably several years. But beyond that, and I didn't talk so much about the PAT side, the PAT has got huge traction as well. I mean -- as you know, we launched our FlowVDX in-line protein concentration technology 1.5 years, 2 years ago, so which has got incredible traction while working on multiple other PA technologies product grade or product launches that will happen over the next 1 to 2 years.

So talking about investment and talking about organic investment, we're investing a huge amount of money on the R&D side to make sure we've got many more products on our shelves over the next several years. but both from an app line but also from an in-line point of view, and you will hear us tell talking about that massively over the next several quarters and years. And then, yes, in terms of M&A, absolutely.

I mean, as you know, capital spending top priority #1 for us is on the M&A side. I mean we ended quarter 1 with $785 million of dry powder. So we are looking at several opportunities, and it's the right Polymem on the Analytics side to complement our offering further so on, we would be very interested.

So the last piece I would mention and services are benefiting from that grandly as well. I mean our service business grew more than 3% in in quarter 1. And the good news is we've got a very nice attachment rate of service to our analytical equipment. So that's another area we're investing into quite a bit and then partially for that piece that is linked to the analytical business here.

Your next question comes from the line of Justin Bowers from NJ.

It's Deutsche Bank, but I'll squeeze a multiparter into one. So on the proteins, pretty strong quarter, especially against a tough comp. Can you talk about some of the drivers there? And then -- is that more of a shorter cycle business, i.e., how much visibility do you have into that? And then over the next 2 to 3 years, is that a franchise that you believe can continue to grow above Fluid average.

Justin, Happy to have a question on protein because that's another business. I'm so happy about the progress we're seeing here. So yes, you're right, I mean, meeting growth lapping on what was a very strong quarter 12025 was a really great positive surprise for us. And honestly, we got demand across all our offerings, but partially on the legal side. I mean I mentioned in the past we've really become closer and closer with Purolite. We work really very much hand-in-hand together they have fantastic traction, and we are very happy about the way we collaborate together. That has been one of the reasons why protein did so well.

So we are in the long-term type of business here because beyond that specific collaboration the fact also we have our date in our hands for all of the non monocular antibody side of the business is also very encouraging because we are winning multiple and we say multiple is really multiple designing. And it's a business that takes a little bit of time because where you first need to get designed in and then you start to deliver some first pilot quantities.

And then hopefully, some of these products are either making it to the market or if they are already on the market, people are -- our customers are going to put the trigger to switch from one supplier to us. But with all of the designing we've been working on, and we've got a dedicated team that is going on the market, getting fantastic response from the market because they've never seen a company capable to develop a new lean in 3 months and month.

I'm absolutely very bullish about that market for the next several years. I think the best is still to come here for sure.

We have reached the end of the Q&A session. I will now turn the call back to Olivier Loeillot for closing remarks.

Thank you all for joining our call today. We had a very great first quarter, and we're executing against the plan we've outlined which is outpacing market growth, delivering margin expansion, and Jason gave you a good number of details about what we're achieving on that side; and finally, making tangible progress on our strategy. I really want to thank all of our Repligen teammates. We have an incredible team, and we are delivering a fantastic start of the year and looking forward to talking to you again in a quarter from now. Thank you all.

This is Paul Knight, life science analyst at Repligen. And with us, we have Jacob Johnson, Head of Investor Relations; Jason, Chief Financial Officer; Olivier, CEO. We all very familiar with Repligen management. In fact, when I first met them at $3 a share, it was in the building I'm sitting in right now at 1301 Sixth Avenue.

So they've come a long way. And Olivier, you've been there -- you've not been there forever. What are your impressions now as the CEO a bit of how Repligen is positioned and how this market feels to you?

Yes. No, that's a great question, Paul. I mean I've been here for about 2.5 years now, CEO of the company for 1.5 years. I mean, I'm obviously more excited than ever. I mean we have a very unique and very broad offering at the same time. And with our very intense commercial strategy, I mean, we've been very successful over the last couple of years to really get more and more closer to those big companies and getting them understanding we have a very broad portfolio of products.

You know very well, like innovation has always been really at the core of our DNA, and we're still doubling down on innovation as well because we really want to make sure we are helping our customers to improve their yield, increase their -- sorry, improve their cost of manufacturing and so on. So we are really extremely well positioned and excited about what's coming for the next several years here.

We just mentioned innovation, which I think is like a cornerstone of what Repligen is. I think 80% of your portfolio is differentiated. Could you just touch on what makes your product so differentiated? You said yield improvement. So that's definitely important. But on the other 20%, is there ways you're trying to add, whether it's analytics or other technologies to differentiate those offerings?

Yes. No, good question. And so on the 80% where we are really differentiated, the reason is simple. I mean we've always make sure that our R&D team was focused on what doesn't exist and what customers are looking for. I'll pick up two examples here, which are two of the historical product line, ATF on one side, pre-packed column on the other side. ATF, people have been telling us for a decade now, we need a process intensification technology.

I mean we want to be able to get more out of the same footprint. So that's what we've developed. That's what we've launched. We're already at the second or third generation of that technology, working on the next one. That's a perfect example. Pre-packed column is another one. I mean back 15, 20 years ago or so, I mean, most companies were hiring people who would pack column for their entire life. Now they just don't find those people anymore because a young generation wants to pack column for 3 years and then do something else. So really working with a company that has got decade of experience doing that and packing thousands of columns is absolutely a big, big advantage for those companies.

So on the 80%, and you could mention PAT, you could mention the vast majority of our portfolio. Where we have more direct competition and the usual portfolio segment is obviously fluid management, we are still trying to differentiate ourselves. And here, you would think about differentiating yourself via better service. I mean, being more customer-centric, whether because you're offering better lead time or maybe also because you're really offering better customer service.

And it's fair to say even though fluid management, single-use technologies have been implemented now for more than a decade, there are still several challenges with that technology like extractable and leachable, leakages and so on. We are really trying to make sure our customer service team are closer to our customers so that we really differentiate ourselves on that side. So it's really, really whether we've got very differentiating products or for the 20 person making sure we are more customer-centric, making sure we offer better service than others.

Yes, that makes sense. I never thought about the 20% with the service side, just like being able to serve your customers maybe more closely than a bigger competitor. But it just seems like your portfolio, whether it's ATF pre-packed columns are really resonating with customers on the pharma side, on the CDMO side. Could you just walk us through some of those customer wins and what's really motivating these customers? Is it a product? Is it your sales forces they really know their products or cost-saving metric? I think that would be helpful to hear.

Yes. No, as I mentioned to Paul earlier, I joined about 2.5 years ago. And I can tell you the visibility we have with big pharma accounts and big CDMO as well today compared to what it was 2.5 years ago. It's almost day and night. I mean it's fair to say like 2.5 years ago or so, those big companies, they knew us for maybe a couple of our product line. Now they realize we probably have one of the broadest, I want to say, probably one of the top three broadest bioprocessing portfolio in the industry today.

And really, during the last 2.5 years or so, my focus with the commercial team and the product management team is to make sure those customers understand the breadth of the portfolio we have. And I think we mentioned a couple of months ago or so that in the last 5 years, the amount of product line we've been selling to those big accounts has multiplied by a factor of 2.5. So that's a great sign like people really, really understand that we have a much broader portfolio.

And we're at a point, in fact, where we are starting to even package all of our technologies together and then working on a full solution offering so that for some of the specific customer needs, but potentially some of these specific modalities now beyond pitching all of the different parts of the portfolio, now we come and say, we almost have a full workflow for you. And if for whatever reason, we might miss one or the other part of that workflow, potentially articulating how we can still support customers with that full workflow. So this has been a huge evolvement of our selling in the last 2.5 years or so.

But the good news, we are still at the beginning of that process. And I think we've got incredible tailwind for the next several years because people are just starting to understand the breadth of the portfolio we have today. Another good example here, a nice, we have now such a broader offering on the equipment side that where we were not getting a seat at the table up to probably 6 months ago. So now we're getting involved in probably 80%, 90% of any big RFPs that are coming out because think about it, 2 years ago, so we mostly had the ATF hardware offering. Then we added all of our downstream system, both TFF chrome system, and then we added now the mixers more recently. So we have almost 80% of whatever equipment are being needed when a company decides to build a new bioprocessing plant, and that's a fantastic opportunity for us as well here.

When you say equipment, Olivier, do you mean -- would that include ARTeSYN?

Absolutely. So ARTeSYN is what I call downstream equipment, which is both TFF and chromatography system. And we have had, as you know, really good traction on that side over the last couple of years here.

I was reading an old industry report that said it in the bioprocess industry, 40% of market was equipment, 40% is single use polymer bags and then the remaining would be media and other. Would you still be a good number?

I'm not sure, honestly, Paul. And I mean, obviously, there are so many different studies coming out and so on. So if you talk about a brand-new site where people need to build and buy all equipment and so on, yes, it's fair to assume like overall, at least for the first 1 year, procurement is going to have a big part of it coming from equipment and so on, absolutely.

But once the plant is up and running and so on, the part -- the percentage of the equipment is much lower than 40%. I mean -- and if you look at the four big guys, but even to a certain extent, ourselves, I mean, most of us have the vast majority of our sales on the consumable side, up to probably 75%, 80% of sales going on the consumable side. So where your number would potentially make sense for a site that is being built, and that's probably where the onshoring topics would be a good one to reflect on the number you just said. When you're more talking about a well-established operation and so on, consumable component is much bigger than hardware for sure.

Then Sartorius, as we were talking earlier, talk Tuesday about, I think, 9% to 12% growth this year themselves or market growth. You're similar. What's your overlap with Sartorius?

Yes. No. I mean we -- I'll start first where we collaborate together. And I mean, as you've seen and we've talked about several times, I mean, we're collaborating with Sartorius on the ATF side. We've been working -- our two teams have been working together now for several years, and we're, I think, very happy on both sides about the collaboration where we are learning from each other and what needs to be done to improve further this process intensification capabilities and so on.

Beyond that, obviously, yes, we are -- it's one of our, I call it, good competitor. I mean it's a very good, very high technological company and so on. We don't have that many overlaps, honestly, Paul. We have a little bit on the fluid management side, but they are much bigger than we are. I mean we're a very small actor in the field versus where Sartorius is. And then we have some overlap, but limited as well on some of the downstream system and so on. But overall, we've got very little overlap with Sartorius.

I wanted to talk about how some of the tailwinds that we're seeing that you've mentioned are translating to your top line and just momentum in general. I think in '25, correct me if I'm wrong, but I think you raised guidance twice and also beat the high end of that range. So sitting where we are today, what do you think played out differently versus what you originally expected? And then we can go into more of 2026, but would love your thoughts there.

Yes. No, absolutely. And I was about to go to '26 first because interestingly enough, our guidance for '26 is very similar to the guidance we had at the beginning of 2025. But we will come back to that for sure later on. I mean, one thing I've learned over the last 30 years being in that industry, Anna, is you need to have a very broad portfolio of products.

And beyond having a very broad portfolio of products, you need to have a very broad portfolio of opportunities with customers because, I mean, I would tell you, like in 30 years of working experience, I don't think I ever delivered the budget the way I thought I would on January 1 because you always have good and bad surprises. But in the vast majority of the case, you deliver your budget because you have all of these opportunities. And if for whatever reason, you get some headwind, you're going to be able to compensate or even more than compensate for it.

And the way 2025 played out was a perfect showcase example where when we enter into the year, we had no clue like we would get that new modality headwind that we had finally in the course of 2025. And we didn't know either that somehow our biggest modality, our biggest franchise, filtration would be the one suffering the most from that specific headwind, but that the other three franchises would be doing much, much better than we thought for multiple reasons.

So again, this is the beauty of having a really broad portfolio of products and having what I call the best-in-class sales organization because that's enabling you really to rebound and you've got so many opportunities that you're going to grab them. And you've heard me saying several times, the funnel management is critical as well, which is we're operating typically with 4 months of backlog. So it's good, but it's not huge. The only way you're sure you're going to deliver your years is because you've got a very strong funnel and then you need to just be able to succeed on translating that funnel into orders.

So last year, if I just have to pick up two, I mean, because three really performed very well, but I just pick up maybe two, which is protein on one side, incredible success story for us last year. I mean, you know like '24 was a horrible year for us because we almost lost -- well, we lost really two of our two historical OEM companies, customer and so on. And we had to reinvent our business completely. I would never have thought we would have so much traction so fast and be able to go back to the level we were before we lost those two OEM partners.

The good news today is we have our destiny in our hands and the best is still to come because now we are on a much broader range of customers on that side and which are end customers, meaning we don't have this type of intermediate situation that we had before. And then the second one is analytics, where when we launched a new SoloVPE PLUS, I'll tell you very honestly, I mean, I didn't realize how much traction we would really have. And I mean, it went beyond our expectation.

Again, good news here. We are just at the beginning of the cycle because we replaced less than 10% of the installed base. That's going to be another tailwind for the entire year. So again, being broad, brought from a customer point of view, from a product line point of view is what has enabled us to over deliver last year and what will enable us, among other stuff, to overdeliver versus market for the next several years as well.

Yes, that's great to hear. And the SoloVPE was definitely a good upgrade cycle and good to hear it should continue in the next coming years. But I just wanted to -- I have some more portfolio specific questions, but I thought maybe for Jason, if we could just hit on some of the margin targets taking a step back, not looking just at '26, but over the long term, where do you expect margins to trend? And just what are some of the levers to get there?

Yes. So we've been pretty clear and sharing often that our target is to get to, call it, a 30% EBITDA, and that's probably 25 plus or so at the EBIT level by 2030. And -- but we've also been sharing that when you look at that trajectory, it's probably a smaller step up over the next couple of years and then accelerate as we grow scale and able to just find or benefit from more, I'll say, leverage, right, on the structure we've got.

I think when you look at the path that we -- to get us there, we're certainly going to continue kind of think about the elements of the P&L. We're going to continue to be able to capture price, right, value-based selling in our markets. We'll certainly get volume leverage. That price will be able to effectively offset the inflation we have, right, and maybe a little bit more. And then we'll continue to deliver manufacturing productivity. And then the other piece that effectively would be a part of volume leverage, but it's worth calling out, it's really then the leverage we get from growing our operating expenses at a rate lower than our top line, right?

And really being focused over the next couple of years, in particular, on investing in our Fit for Growth journey, ensuring we've got the right people and processes and infrastructure to get there. And then as that builds out, again, we feel like the investment on that will require lower amounts as we get into, call it, '28, '29, et cetera, and '30. And so that's really the model that we're driving. We delivered I think really strong margin expansion in 2025.

If you take out the impact of M&A, and we expanded EBIT margin by 240 basis points. And so we've guided 150 for 2026. And I think we're going to be able to kind of demonstrate that continuous expansion here over the next few years.

That's great. It seems like in the short term, more investments, but it will drive top line growth as we look out to 2030, and that's good to hear. I thought maybe we could look at some of the product lines Olivier was talking about earlier. Maybe on chromatography, I know historically, CDMOs have been quicker to adopt the prepacked columns, but now we're starting to see some pharma customers. I think you had 2 pharma wins recently. So could you talk to us about the funnel on the prepacked column side? Are those mostly pharma companies? And how long does that usually take to convert those customers?

Yes. No, I mean, you phrased it right. And I mean, historically, the value prop was particularly attractive for CDMOs. I mean think about it, when you're a CDMO, you have to be agile, fast to react because you're not 100% sure what you're going to have to manufacture when you're entering into a new year.

So having prepacked column on the shelf is a great advantage because you are capable to react really fast if needs be. So -- and it's fair to say, really, we're still having a lot of traction on that side where some of the CDMOs who were maybe mostly using small-scale prepacked column in the past are moving towards using larger scale, which is one of the reasons why we've seen so much growth last year because they realize they really like the concept a lot.

But beyond CDMOs where we've had traction for several years, now it's really about making sure we convince pharma companies to switch. And for pharma, it's slightly different because if you run a pharma manufacturing plant, normally, you have a pretty good idea what your manufacturing plan is going to be during the year. So more than really having the agility, flexibility to move to another product faster, which is what we talked about for CDMOs, it's really more about having the expertise in-house.

And I alluded to the fact it's difficult now for those companies to find people who have got a decade of experience packing column. So when you think about the risk of contamination, the risk of losing a huge volume of resin, which is very expensive and so on. I mean, slowly but surely, a lot of these pharma companies start to realize it's probably very good to consider using pre-packed column to reduce all of those risks. So we had really good traction last year. It keeps on going this year, in fact.

And last year, we said we won two new customers. It keeps on going this year. I mean it's -- we have a product line where we know we've got still a lot of potential growth for the next several years, and we see new customers popping up quite regularly on that side still. So yes, they're very exciting. I think we've got a great runway. I mean, column packing is a real art. And I mean -- and bioprocessing is an art, but column packing in particular, is a real art and you can't like suddenly be as good as a company like ours with packing more than 3,000 columns every year. So we've got incredible knowledge on that side for sure.

That's really interesting. The fact that talent plays such a big part of why your share in the pre-packed column market is probably irreplaceable.

Can I jump in here on that topic of talent. I'm sure that when Repligen in the early days was acquiring companies, it was also the game direct salespeople. Now it seems -- I'm guessing you have the size that you can compete with any firm in the industry on recruiting talent. Is that a fair assumption?

No, it is, Paul. I mean -- and I have to say, I mean, we've had the chance to really hire more or less anybody we really wanted to hire over at least the last 2.5 years I've been here. I mean -- and then a lot of people who have got the decades of experience.

I mean, when we talk about getting fit for growth and investing in talent and so on, I mean that's definitely one big part of it. I mean, and really across all of our functions, I mean, obviously, I started mostly on the product management side and commercial side when I joined initially in October of 2023.

But in the meantime, we started to do the same in many parts of our organization from finance quality, including services, including IT more recently and so on. So we are really bringing talent that have been working in that industry for a long period of time because as you know very well, Paul, it's a bit of a unique industry where know-how is very important.

I mean whatever function you work for, I would even mention HR on that side, you're looking for very specific talent that ideally know exactly what is important for customers and so on. So -- and we've had the luxury to be a pretty attractive company for people who see the bandwidth we have and who sees like, yes, we are definitely smaller than some of the big guys, but this come alongside also potentially more opportunity for growth and then more opportunity to really focus on what people think is really important.

And just on proteins, I think that's another interesting area where strategy has kind of shifted in recent years. I think you're launching a bunch of resins, custom resins for customers. Could you talk about how the business is set up for 2026. Are there new resins launching? Are these new resins higher in margin? I know there was some difference in margins, but that would be helpful.

es. No, absolutely. And I mentioned earlier, I'm so proud about how fast and how successful we've been to pivot that business because, I mean, I don't think there are many, many examples where you're losing suddenly to such huge customer of your business and you're capable to rebound like that. And what we've done, we really work from different side here. And so first of all, it all started with the acquisition of Avitide, which was about 4, 5 years ago or so, which just gives us the opportunity, the ability to develop custom ligand in 3 months.

And I tell you, nobody else is capable to do that. I mean -- and in fact, what a lot of these big pharma and CDMOs have understood over the last couple of years is there is finally now a company that is capable, which is probably 5 to 10x faster than anybody else is capable to do it. But then obviously, if you really want to play a role on the full offering, which is resin, you need to have the bids as well, which is why we acquired Tantti in our year-end 3 months ago or so -- and not only the technology is beautiful, but for new modalities, I mean, it's giving us what I think is probably the best combination of the best ligands plus probably what is the base metrics for new modalities.

So that's why we have a combination of catalog product launches that have got great traction, but what people don't see is we work on multiple -- I say multiple, it's really a big number of custom projects for those big pharma and CDMOs where we also have incredible traction. And then the last piece I would mention and not to underestimate, I mean, we've been collaborating with Purolite, as you know, on the monoclonal antibody side. The collaboration is closer than ever, and we are absolutely delighted about the progress we are achieving together.

We will strengthen that collaboration over the years and that is also functioning extremely well. So very excited about protein. I mean, as you know, I'm always excited about my portfolio -- that's really one where I think we've got also incredible runway for the next several years here.

Yes, that's great to hear. And it's certainly been a cool transition to watch from the outside. And I want to talk about the process analytics portfolio. I think you recently merged the C Tech sales team and 908 devices. So now it's like a more unified portfolio of process analytics, both upstream, downstream. What would the time line look like for you to start pitching as to large pharma accounts, just a unified system level, upstream, downstream process analytics portfolio.

Yes. So we have merged the sales organization already. We did that in July of 2025. So we're about 7, 8 months into a merged sales organization. This has definitely benefited the funnel of 900 grandly because now, I mean, the sales team size is something like 5, 6x bigger than it was when it was independent. So obviously, this is helping us to generate massive improvement in terms of funnel for the 908 offering. So this is already happening.

Where I think your question is particularly accurate and now is we are just at the beginning of that digitization journey that we are talking about because now between the FlowVPX, we already had in our hands, plus the four technologies we added from 908 plus one or two extra one. One of them, as you know, is the one we acquired from Delight several years ago. So that has taken us a little bit of time to develop. But now thanks to the know-how of the 908 R&D team, we've progressed very fast over the last 12 months to develop that MIRA technology that will be launched probably towards the end of this year.

We have really 6 and probably very soon seven PAT technology. So now the question is how do we aggregate all of these together? And how do we make sure like beyond selling each of them one separately to the other and so on is how do we make sure that people -- our customers understand the real most advanced PAT provider in the industry is Repligen and how do we make sure we give them a chance now to aggregate all of the data they are collecting from our technologies and making sure and you see it coming, they can also use AI and type of software, software that will enable them to really develop their processes much faster on the one side, run their operation more efficiently on the other side.

So that is our path forward. We -- as you know, we took minority investment in an Austrian company called Novasign last year, which is somewhere between pure PAT and AI. It's really more what is called digital twin, which is somewhere in between. We're working on a couple of other opportunity here, but the idea is to be really leading the pack for our bioprocessing customers in terms of AI enablement so that they run their operation much better in the future. And so we're at the beginning of that journey right now.

Okay. Perfect. That was very helpful. I think maybe we could spend a moment just touching on 2026 guidance, visibility around that and also some of the assumptions. I think CapEx is something that's been muted for a lot of players. What are your assumptions around CapEx in '26? And are you seeing an improvement on that side?

Yes. So and I mentioned it earlier, it's interesting because when we work on our guidance for 2026, we look at all of the guidance we had in 2025, it's really towards the end where we realize, well, in fact, it's extremely close to the guidance we had a year ago with the result you know. But at the same time, we said it's probably the appropriate guidance for the time being. And remember, our framework has always been, say, plus 5%, at least plus 5% versus market. Last year, we did much more than plus 5%.

I'm not sure exactly what the market landed, but it's fair to say we need much more than plus 5%. This year, we said it's going to be plus 5%, minus 2% because of the headwind we have on that specific gene therapy program. So -- and then at least from what we heard so far, I mean, it looks like peer commentary at the beginning of February also was like we would be more towards the lower end of the market growth we've been talking about for 2026, which is probably more into the 7%, 8% growth for the market this year.

So if you make the math, I mean, in fact, our midpoint of the guidance is still a little bit above 5% above what some of the peers might have mentioned about market growth this year. So we think it's an appropriate guidance, and you pick up one of the good topic, which is the CapEx spending. I mean -- and as you know, we did probably much better than several others last year. I mean, our CapEx -- our hardware business was in 2025 versus 2024, where at least one of our direct competitor mentioned being down high teens in 2025.

So we definitely did better than others. But it's -- we agree with others that CapEx spending has not been back yet to the level we would like to see it. And that would be definitely something I think all of us, including ourselves, are hoping to see happening more this year accelerating because that will become a huge tailwind. So we're absolutely confident once the tap is open, it's going to become a huge tailwind for everybody. We would just like to see that happening a little bit faster.

But again, this year, we are absolutely confident we are going to have a very nice growth it's fair to say like from '27 onward, we think really growth will accelerate further again because of all of these tailwinds we are seeing. A couple of other topics are obviously a small biotech. I mean as you know, we've had three really good quarters in a row. I mean, of order intake growing really nicely. Interestingly, this came at the same time kind of toward the end of the year where funding became much bigger as well.

But we've always said normally, funding doesn't come to those companies in the first 6 months. So you would think that combining the rebound we already saw plus hopefully, in our money reaching those customers, that should be potentially another good tailwind for the industry as well. So we are watching all of this stuff. I mean, I mentioned about MFN, so-called MFN digestion and FDA approval. That's the last piece. I will just repeat again once more here, partly FDA approval. I mean, we are now, what, 18th of March, I mean, there have been almost no biologic drug approved this year. I mean that is something we want to see improving because where it might not have a huge impact in the very short term.

I mean, for the pharma ecosystem, it is important to see FDA approval. I mean, it's absolutely critical because this is restoring confidence from the entire ecosystem to invest further and then to push for more innovation across the board. So that is something we want to see improving as well and now, but we are still very confident for the future.

Olivier, Jason, Jacob, we really appreciate your time today. I guess the closing question I would have, Olivier is a lot of things were pretty negative last year, I guess, for pharma, discussions with the FDA or the new Head of FDA, et cetera. Tariff pricing. Is that -- was it as bad as that talking to pharma last year?

No. I mean, obviously, and I'd like to do a parallel between the rebound with seat Big Pharma about 2 years ago or so, then we saw CDMO rebounding a year ago. And now finally, we're seeing small biotech rebounding as well. So from a customer segment point of view, you want to say like everything is much, much better obviously than it was 2 years ago. Much better than a year ago. And then we're obviously very excited about all of that.

We want to see a little bit how those MFM deal plays out. I mean we know like a lot of things are going to happen. We still believe like we want to see people pulling the trigger now and saying, "Hey, do I really now push the onshoring button full speed and then we're going to be entering into what's going to be an incredible growth cycle for probably several years." And we just want this pattern to be pushed. And then I think everybody will feel like extremely bullish again.

That's the only thing I think everybody is waiting for at this stage, plus a bit more FDA approval as well, Paul. But yes, am I optimistic for the future of bioprocessing? Absolutely. And I think we're going to have several years of very nice growth in front of us here.

Thank you so much. Thank you, Jacob. Thank you, Jason.

Thank you, Paul.

All right. Great. Welcome, everyone. I'm Puneet Souda. I cover life science tools and diagnostics here at Leerink. And it's my pleasure to be hosting the Repligen team, CFO, Jason Garland; and also Head of Investor Relations, Jacob Johnson, joining us. Great to have you guys here in Miami.

Good morning.

Thanks for having us, Puneet.

Yes. Okay. Excellent. So maybe always exciting to talk about Repligen, a number of things you have ongoing for you in the markets, strong clinical stage presence that you have and in commercial as well. So maybe -- but let me kick off on the 2026 guide. You framed it as 9% to 13% organic growth rate. And then you pointed out the 500 bps outperformance framework relative to the bioprocessing end market, offset by 200 bps of headwinds from gene therapy. Maybe just give us a view on that sort of 9% to 13%. It was a bit wider than usual historically, but maybe could you walk us through the puts and takes? What takes you to higher end of that guide versus lower end? What was the thinking behind it?

Yes. No. So we had a really strong 2025. So the momentum continues into '26. We've got a great order book that we ended as well with fourth quarter. I think to your point, the midpoint of that guide is right within the framework that we've been talking a lot about. I'm not sure your history, but we look back the last 5 years, and we've always -- we've given 4 points of range kind of coming out of the gate every year. So we actually saw that then if you stick hover around that 11%, plus or minus 2% was a typical range that we've given on the organic side.

I think the -- to answer your question, if the pipeline of opportunities that we see continuing to grow is able to execute and convert within the year, that pushes us towards the higher end. And the things that I'd say we're watching are certainly pharma digesting MFN, what that really looks like, FDA and approvals and how that plays out. Those are the things that we're watching that maybe leads us towards the low end. But overall, we're really excited about the pipeline that we've got, the opportunities and again, well within this framework of being able to deliver above-market growth.

And a couple of macro factors that you referenced as well, MFN policy, I think Olivier mentioned that and pharma CapEx timing, FDA biologics approvals as variables that are obviously out of your control. But remind us, I mean, yes, pharma CapEx, I think CapEx is well understood. But generally speaking, biologics approvals are headed in somewhat of the right direction. MFN policy is somewhat behind. So just trying to understand sort of how much of those factors are still playing a role in this overall guide?

Yes. I mean for '26, the approvals, of course, probably have less of an impact or it's later in the year, right? I mean we're not banking on the view from where we are today with approvals. It's more of an indicator of that overall market activity. So I think it really becomes back to the CapEx timing, right? And does that continue to improve from where it is today. And that, again, helps us to do -- to go to that higher end of the range. But the approval side, again, takes a little bit longer to flow through.

Okay. Two things that are still external factors, you could say. One was a recent departure at CBER. And we're seeing -- obviously, some of the more new modality levered names and the therapeutics reacted to that yesterday. But just wondering if you had any sort of conversations, what this news means for you and your customers, at least in the new modality. And remind us what's that level of exposure that you have there?

Yes. So just in terms of new modality exposure in 2025, new modalities was about 16% of our revenue, and that's cell therapy where we saw strength last year. Gene therapy, which we do have a headwind in there that we've talked about. But I think outside of that held up relatively well last year. And then we did see some headwinds on the mRNA side of things. So that's that piece of it. The news you referenced, look, we're not in the business of drug development, and it's pretty recent. So I think it's really too soon to say other than I think anything that reduces uncertainty for our is probably a net positive for us.

Got it. And then another one that's obviously quite a few moving targets that we've been -- all of us have been dealing with. But with the conflict ongoing, there is a question of shipping in terms of cost of -- obviously, oil price and inflationary pressures as a result of it. How does that impact shipping of instrumentation, consumables? Maybe just talk to us about that because obviously, you're shipping globally as well.

Yes. So first, from an exposure within -- sales within the region, it's de minimis. And so again, that doesn't really come into a big play. When we are shipping product from Europe that we manufacture there into our customer base in Asia. That's what typically might go through that region. Obviously, we've spent the last several days, I guess -- yes, it's still been days now here. It seems like a long time, but finding routes around that. So you're right, there may be some inflationary pressure on it, but nothing that we feel like is going to be that meaningful that we need to call out. So the team is all over it in terms of meeting the customer delivery commitments and their requests as well as finding safe passage through to the region.

And in terms of just on the 1Q guide, you indicated 1Q revenue should be down only low single digits sequentially versus 4Q, and that implied about a 10% organic growth at the start of the year. Maybe just talk to us in terms of your level of confidence in the strength of the 1Q exit run rate relative to the typical seasonality. And with this conflict in mind, anything that we ought to consider in terms of shipping delays or booking of revenue sometimes as those products go out the door?

Yes. Look, we think we're in a great position in 1Q to then be able to deliver and establish a great step forward to meet our total year guidance. So we tried to indicate some of that on the call for earnings that the strong fourth quarter orders run rate translated to a steady I'll say, backlog, if you will, to execute in 1Q. We're executing that. Again, we're managing some of the puts and takes within the Middle East traffic. But overall, I think everyone should know that we're expecting to start within that framework and put a good foot forward for the year.

Got it. And since you mentioned orders, I mean, maybe can you talk a little bit about the order book? Any sort of recent feedback that you're getting from the field in terms of just sort of, again, orders first and foremost, I mean, in mind for investors, just given the...

Yes. And I guess I'm speaking out of both sides of my mouth because I've referenced orders even though I said we weren't going to be really quantifying that anymore as well as book-to-bill. But -- and again, we'll focus on revenue guidance as a way to indicate that performance. But by all measures, quarter-over-quarter, year-over-year book-to-bill, fourth quarter was a strong quarter for quarters.

Okay. When I look at the cadence this year, first half being weaker versus second half, is that just primarily Sarepta headwind being sort of front loaded? Or is there other considerations in that?

Yes. So I'd look at it, there's kind of 2 dynamics, Puneet. So there's -- we talked about kind of 48% in the first half, 52% in the second. And that's really just more seasonality, right, kind of very typical, we tend to have a stronger second half, particularly from the fourth quarter. So that's very much in line. It's the year-over-year growth rates that is more impacted by the gene therapy. So in other words, that's why we said the second half would be above the midpoint and the first half might be below. That is -- that's where the timing of the gene therapy comes in. That was much more front-end loaded in 2025, so the year-over-year. But on the order of magnitude of dollars, $48 to $52, that's seasonality that is not related to the gene therapy dynamic. Makes sense?

Yes. And I'm going back and forth to a bit, but just on the -- one of the comments, which was interesting to me is on the call, you called out highest probability conversion funnel since 2022 and obviously, strong order momentum there. It seems to imply -- obviously, it implies book-to-bill being at 1, but the question is, how sustainable is that? But maybe just talk to us a little bit about that conversion from -- what's -- is there -- is just normalization? Is there something more to this in terms of how the CDMOs are ordering, the timing and overall, maybe it's pharma. And I'm -- again, looping in another question, which is, is there any early indication of any facility onshoring or anything going on, on that front?

Yes. So overall, again, we've seen this really big -- the strong growth in the funnel. We're getting -- and we've talked about this as well. We're getting a lot more looks at RFPs for our downstream systems, for our fluid management portfolio. So we're continuing to be brought into a lot more opportunities, which again helps to build that funnel. I would say that we're having some onshoring dialogue, but in terms of it converting into opportunities or proposals that's still to come. But again, that overall strength that we're seeing in the funnel isn't only a certain product, it's really across the board.

I think, again, now the dynamic that we're all continuing to watch is how -- what's the timing on how those convert, right? So that's where we still might still be waiting for RFP feedback. We're not getting feedback to say that we've lost or they've moved on, but it's more of a kind of wait and see on some of the things. And so that's really, for us, the switch. It's the convert on this big pipeline, but again, what that timing will be.

Okay. Just a related question on the capital equipment. Obviously, capital equipment demand has remained soft in 2025. Analytics placements were holding up better. But maybe just talk to us assumptions that you're embedding in terms of overall capital equipment recovery. And a number of your products are I mean, in a consumable way, they're utilized over a couple of months or a couple of weeks versus purely capital equipment. So maybe just help us define how large is sort of capital equipment business for you? And what does that entail in terms of overall recovery this year?

Yes. So maybe first on capital, right? So go back to 2025, we wound up the year flat on capital equipment, and we think that was a pretty good outcome in the context of the industry, which at least from what we could see, I think peers were down on capital equipment for the full year, right? So as you think about what we're assuming for 2026, Olivier said, hey, we think low double-digit growth for capital equipment in 2026. But I think there's some nuance there, right? And so -- we talked about analytics growing -- that franchise growing 20% plus in 2026.

There's a piece of that, that's the SoloVPE PLUS upgrade cycle. So that's an opportunity that we think is still in front of us and will benefit us in 2026. And the other piece would be, we think, growing contribution from the upstream analytics portfolio we bought last year. So analytics, I think, is a big piece of the capital growth in '26. I'd tell you, there's also some other benefit from like we launched a new mixer last year. We talked about initial placements this year. So I think there's probably a little bit of benefit from that. I think outside of that, what we're looking for, for the balance of the capital equipment portfolio is, I would say, flat to kind of modest growth in 2026.

Got it. On the point of SoloVPE, I'm wondering if you can -- that's a unique innovative product. You have a unique position there. There is a broad applicability of such a product in the marketplace in bioprocessing. Maybe just give us a view into what -- how large is the installed base, timing of how the installs and how long could that take overall the adoption and replacement cycle?

Yes. I'd say there's, I think, 2,500 units installed base. I think 1,500 of those are maybe 5 years or older, I think, is the rough number. And so that's really what we'd be going after, right, those older units. And so we upgraded about a low single-digit percentage of those units in 2025. I think the goal is to probably do roughly double that, so call it, mid-single digits upgrading of that installed base in 2026.

I think the other exciting thing about this is it's also kind of refocused us on the broader portfolio to understand where are there other upgrade cycles and opportunities that we have. And so that's going to be a major part of sort of our thinking on new releases and certainly into our long-term strategic planning as well, like how do we make this more of a muscle for us.

Got it. Okay. Then maybe just shifting a bit to the end market. I mean you have CDMOs and biopharma versus emerging biotech. Wondering if you can maybe give us sort of the state of union right now that you're seeing across those 3 types of customer bases.

Yes. I mean I think we saw growth out all of them, at least in the back half of the year. And so I'd tell you, like pharma and CDMO performance were remarkably consistent for most of the year. Q4 is a little bit different because CDMOs were lapping, I think, a 40% plus comp. So a really difficult comp on the CDMO side of things last year, but good growth out of both those customer bases. And I think it speaks to what we talked about last year is just the broad-based strength we saw across our portfolio, end markets, customer base, et cetera.

I think as you look at emerging biotech, we saw growth for the last 3 quarters of the year, which is an encouraging development. Obviously, been really good funding trends in 4Q and I think year-to-date on the biotech funding side of things. I think with that said, if you look at the dollar value of those emerging biotech those revenues, we're still below where we were a couple of years ago. And so that's where we don't believe we've really seen the benefit from funding yet. And I think we'd like to see more concrete evidence of that before we say that customer base is completely back. Though to be clear, they still grew the last 3 quarters.

And there's going to be a natural lag in timing, right, between funding and when we might see an ordering converted to sales as well. So I think we're still well within that range. So it's a lot of really great signs and more momentum to come if that funding continues.

And what's the -- historically speaking, what's the -- I'm wondering if there's a time line in which the clinical funding, which was pretty significant in the second half for the clinical stage companies is still continuing? And how long does that take to trickle into equipment?

2 to 3 quarters on average.

For an order and then whether you can then convert it, whether it's in the same quarter or the one after. So you're kind of that 9 to 12 months.

Got it. Okay. Maybe just wanted to touch on China. It's a smaller piece of your revenue, but it's something that Olivier has talked about quite a bit, and you're investing in China. Maybe just give us the -- a little bit about the landscape there because I think after COVID, a number of local firms gained more prominence there, as you go back into it, how do you want to position into China? How do you take the share? And how do you win in those accounts?

Yes. It's an exciting market for us. And again, even though to your point, we've dropped as our total amount of sales. We now have guided and shared that in '26, we'll be back to growth, right? So that's at least that first pivot that we're making. To your point, we've recognized that how we operate and how we'll win in China is going to be very different than maybe what we've done in the past. And that's -- and we've talked very frequently about this opportunity to find local partners in one way. So again, our view isn't okay, we go in greenfield. It's how do we find the right local partners. We're still spending a lot of time betting that, making sure that we've got the right folks to help us both from a local, I'll say, manufacturing and supply chain capability as well as other market access. And so that will continue to be a focus for us.

To your point, we've added a lot of new leaders within the Asia Pac region as well as in China specifically. So we're even still getting some of that halo effect overall in the region. We still believe that we're under-indexed in Asia Pac as a total part of our sales percentage than we should be in the rest of the industry. So we'll continue to really put a big priority there. There are additional investments in '26 for Asia Pac. But again, I don't want to make it sound like we're out doubling the infrastructure, the resources. We're being selective and prioritized in that. And again, finding the right way to find partners. But it's much more than a China story as well, right? It's South Korea, it's Japan, it's India, Singapore. Those are the other regions that we'll continue to grow and focus on.

Got it. Yes. That's -- and makes a ton of sense, just given the prominence of bioprocessing...

Yes, absolutely...

Let me get to margins because, I mean, that's been quite a lot of discussions among investors on that. We fielded a lot of those questions as well. But maybe take a minute and tell us how we ought to think about the overall op margin expansion, not only this year, but more longer term. What are the levers you can pull? Obviously, there is a top line has to be strong and drive some of that, but pricing, maybe on productivity, what are some of the things that you can do? I mean, obviously, for fiscal year '26, I think you're implying 125 bps of gross margin, 150 bps of EBIT margin expansion. But wondering...

Yes. So number one, I just want to make it clear where this is a priority for Olivier and I and the team, right, margin expansion. And I'm hopeful that everybody recognizes that we hit that commitment in 2025 with strong margin expansion, right? I know -- from a reported basis, it was lower. But if you take out the impact of M&A, which, again, to us was a longer-term investment on the technology and the product portfolio that we've been building. You take that out and even take out the good guy from FX and on a "organic basis," we were up 240 basis points of margin expansion for EBIT.

So again, very much in line to what we're committed to and kind of helping the say-do ratio on this one. To your point, we've guided another 150 bps for 2026. I think you hit a lot of the pieces. I'll just add some color, right? At the gross margin level, there's some volume leverage, but the real volume leverage sits at the EBIT level, right? So we're able to grow that top line and certainly manage our overall costs under that same growth. So you get good volume leverage there.

Price, to your point, will always be one of our top profitability increases. Again, low single-digit price, but we all love that because it helps the top line grow and it falls through to the bottom line. So that will continue that play. But at the same time, that price has to more than offset the inflation that we have primarily in our compensation structure, right? Everyone comes in and we might have 3% to 4% higher overall comp. So you got to offset that inflation and you got -- and if there's some overall inflation as well with our suppliers. And so pricing has to be that lever to offset that completely and maybe even deliver some upside.

And then to your point, productivity comes in, right? And so the operating team has continued to build this muscle around day-to-day productivity. We call it our RPS system, but then also really thinking smartly and long term about how do we optimize our footprint, how do we optimize our resources. And so that all falls through. So -- and then we'll continue to just have incredible cost discipline and focus. I can tell you within my organization in finance, we're providing a lot more real-time visibility to spending across all the functions. And we're also built out, I'll say, a mindset and mechanisms to know, all right, to prevent us getting over our skis, meaning if we aren't growing at the high end or whatever the rate, how do we dial things back so that we still deliver the margin expansion we can -- and we have the mechanisms around that.

So I think the last piece of -- maybe the question is the framework over a longer period of time, right? So it's really those same dynamics every year. We expect that we'll see more volume leverage, I'll say, in kind of '28 and beyond, right? So the next -- this year and maybe into next year, there's, again, still strong volume leverage, but maybe we'll get more of that after we finish or I'll say, get more focused on our Fit for Growth investments in '26 and '27. We've talked a lot about it, but we recognize that for us to be able to scale and grow and be double the size business over the next several years that we need to do things in some way differently than we've done up to kind of life to date, if you will. And so that's infrastructure, that's having the right talent and organization, some of the IT systems, and that's where we're focused on investing over the next couple of years.

So maybe on that point of investments, I mean, maybe if I could take a bit of a leap here, a lot of these investments have to be done early on and the benefits are more longer term. So as you look at the current -- the investments in IT product, you talked about the executive team, Asia expansion, R&D. Maybe just walk us through sort of how are you prioritizing these? And how should we think about the investment sort of ramp? Does it increase into the back half of the year? And then the benefits, how should we think about those benefits coming back to you and layering that in 2027, just timing of those?

I mean, so we shared on the call that we would step up in first quarter on our operating expenses from 4Q and then be kind of flat to mild or modest growth through the year. So I mean that is the timing. We're trying to -- you walk in again with some immediate increases due to primarily compensation increases and some other things that have now hit in first quarter, that's what will hit. And then again, we're managing that step through the rest of the year in terms of how we effectively hire more resources and the timing of that.

The -- to your point, those have to yield benefits. I mean I'll say that, again, some things are about preventing things breaking at the scene, right? There's an infrastructure and an execution that is required to deliver at the higher scales. And so to me, the benefits come in our ability to gain volume leverage. But it's not a, oh, I add this $1 and I get $2 a year later. It's -- I add that $1 and it's now created a capacity for me to grow and grow, right? And I think, again, the good news is that the things we're doing now have a lot of legs and like runway in terms of the ability to scale beyond that. It's not, oh, every year, I need to do that again, right? And so that's where these investments come into play.

So I think, again, we'll start to see some of that in '27. But then even beyond that, I think we'll get more of that volume leverage. And so again, still maintaining this target of being kind of -- we said 30% EBITDA, call it, 25% EBIT sort of margin rate by the 2030 time frame. But again, it's not a linear path.

Yes. But despite the flat sequential that you talked about in terms of the modest -- I mean, Q-over-Q through the year in OpEx, these are commitments that you are still -- I mean, again, this is an investment year, so to speak, right? Benefits are still...

Absolutely. Absolutely. But again, an investment year that still delivers at the midpoint of 150 basis points of margin expansion, right? So this isn't one or the other. What we're doing is both at the same time.

Got it. Okay. Another question that we continue to get us with respect to ATF, it's been a very successful product for you, getting now spec-ed into commercial therapies. Maybe just wondering if there's any updates on the competitive front? And maybe just give us sort of how is the funnel looking there, the level of interest?

Look, we are the leader in perfusion technology, right? And we have been for years, a decade or more. We have a ton of experience. And when you look -- peel back the curtains on all the expertise we've got in resources. We have been competing with TFF as an alternative that entire time, right? And nothing that's been kind of recently discussed would suggest, it's not another version of a TFF sort of solution. By the way, we have our own TFF solution. So frankly, we're agnostic if our -- the customers that we're supporting are a TFF house, then we'll provide a solution for them as well. And in fact, we find that in most cases, we win those opportunities as well.

So I think the other good, I'll say, point on this is, in addition to that leadership we have, we continue to invest. So this isn't a, oh, we're going to stand on our laurels in terms of, hey, we've been able to beat competition. We're always going to be investing for that next gen and staying steps ahead. So we feel great about the opportunity base. As you know, we've talked -- it's not just a mAb story. It's a new modality as well, cell therapy wins. So it's such a core important growth factor for us within the organization. So...

Absolutely. Maybe just last one in the last minute that we have here. In capital deployment, you had 908 product and then REBEL that you acquired and then Tantti. I mean, maybe just give us a update any -- on the integration front, but more importantly, how should we think about areas where you -- there is a better strategic fit to the current portfolio because portfolio is something Tony used to talk about. Obviously, Olivier is focused on expansion of the portfolio. How should we think about the M&A?

Yes. So first, just on the integrations, they're going incredibly well. I mean, again, you can see the new products that we're launching on the resin side that embed the Tantti technology. We've talked a lot about how do we integrate the 908 portfolio into some of our upstream applications. And so again, still progressing in that way and a lot of integration activities behind the scenes as well, all going well. We continue to focus on innovative, differentiated technologies.

We might fill some of the workflow gaps that we have, whether it's bioreactor, cell culture media, biofiltration, maybe a third place. And then we're also going to be looking at other ways that we can provide solutions on customers as they look at their new modality pipeline as well. And again, with a priority on accretive top line, accretive bottom line, and you'd love to see EPS kind of be immediately accretive or soon thereafter. And we also now have been playing -- not playing, sorry, we've been exploring and using this opportunity on minority investments as well so that we can stay connected. So we did the Novasign partnership. Now we stay connected with the technology, but without some of the immediate dilution. So...

We're excited. It's -- I think we've got a great year ahead of us and really strong pipeline and activity and look forward to continue the dialogue.

All right. Great. Thanks.

Thanks, everyone.

Ladies and gentlemen, thank you for standing by. My name is Jerico, and I will be your conference operator today. At this time, I would like to welcome everyone to the Repligen fourth quarter 2025 earnings call. [Operator Instructions]

I would now like to turn the conference over to Jacob Johnson, Vice President, Investor Relations. You may begin.

Thank you, operator, and welcome, everyone, to our 2025 fourth quarter report. On this call, we will cover business highlights and financial performance for the 3 and 12-month periods ended December 31, 2025, and will provide financial guidance for the full year 2026. Joining us on the call today are Repligen's President and Chief Executive Officer, Olivier Loeillot; and our Chief Financial Officer, Jason Garland.

As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning risks related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K and our current reports, including the Form 8-K that we are filing today, and other filings that we make with the Securities and Exchange Commission. Today's comments reflect management's current views, which could change as a result of new information, future events or otherwise. The company does not oblige or commit itself to update forward-looking statements, except as required by law.

During this call, we are providing non-GAAP financial results and guidance, unless otherwise noted. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Repligen's website and on sec.gov. Adjusted non-GAAP figures in today's report include the following: non-COVID and organic revenue and/or revenue growth, cost of goods sold, gross profit and gross margin, operating expenses, including R&D and SG&A, income from operations and operating margin, tax rate on pretax income, net income, diluted earnings per share, EBITDA, adjusted EBITDA and adjusted EBITDA margin. These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to best reflect the performance of our ongoing operations.

With that, I'll turn the call over to Olivier.

Thank you, Jacob. Good morning, everyone, and welcome to our 2025 fourth quarter call. We had a great finish to 2025, with $198 million of fourth quarter revenue, which translated to 14% organic growth in the quarter and $738 million of revenue for the full year. As a result, we exceeded the high end of our October guidance for both revenue and adjusted operating income. We were thrilled to return to robust growth in 2025, with 16% growth on both a reported and organic non-COVID basis, and full year organic growth of 14% exceeded the high end of our initial 2025 guidance.

Once again, the diversity of our portfolio was on display in the fourth quarter as proteins and process analytics both grew over 30%, with chromatography not far behind with more than 25% growth. The same was true for the full year as protein grew greater than 30%, while analytics grew 37% on a reported basis or 21% excluding M&A. This highlights our team's strong execution on the growth opportunities that exist across our portfolio.

Filtration grew high single digits for the quarter and the year. Consumables drove the growth in the quarter with over 20% growth. Capital equipment was essentially flat year-over-year due to a tough comparison, but up 10% versus the prior quarter as we saw capital equipment revenue growth sequentially throughout the year. Capital equipment benefited from downstream analytics demand.

Outside of a couple of specific growth drivers, we saw relatively muted demand for equipment. In terms of end markets, biopharma lead the way, and revenue growth was strong across all geographies. While we are no longer providing detailed order commentary, the strong order trend we saw throughout 2025 continued in the fourth quarter. In short, we had a great year with momentum across the portfolio, allowing us to significantly outpace market growth in 2025.

As we turn the page to 2026, we're excited about the product portfolio we have, the team with peers and the strategy we're executing. We recently held our global commercial meeting. And after spending time with the team, it's clear we built a world-class organization, and the team is highly energized. Our initial 2026 guidance called for $810 million to $840 million of revenue or 9% to 13% organic revenue growth. This includes a 2-point headwind from a gene therapy platform.

Jason will provide more details on our 2026 guidance, but I wanted to share a few high-level thoughts. There are a number of signs that macro backdrop is strengthening, including improved biotech funding, M&A activity and more positive pharma sentiment. After a recovery year in 2025, the current environment is more balanced, though it remains early for some of these tailwinds. As a result, we believe our guidance is prudent, with the low-end appropriately balancing some near-term uncertainty around FDA policy and biopharma strategic response to MFN, while the high end assumes we are able to convert certain funnel opportunities in 2026. Our team is focused on executing opportunities that will arise as the year plays out.

At the midpoint, our guidance calls for 150 basis points of operating margin expansion in 2026. As we highlighted earlier this year, we are committed to margin expansion, while balancing the investments required to support future growth. We expect operating leverage in 2026 to the [ growing ] contribution in coming years.

Impacting our performance by end market, fourth quarter biopharma revenue grew over 20% year-over-year, driven by growth from both pharma and emerging biotech. Revenue from emerging biotech customers grew for the third quarter in a row. Activity from this customer base remains below historical levels, so we believe it's too soon to call this a trend.

CDMO fourth quarter revenue grew low single digits year-over-year due to a tough comparison as we were lapping greater than 14% growth in the prior year. Notably, we saw strong growth from our Tier 2 CDMO customers. From a geographic point of view, we saw strength across all regions, led by Europe.

New modality revenues were consistent with our expectations for a muted back half. For the year, new modalities grew low single digits or high single digits when excluding the impact from a gene therapy customer. We saw strength in cell therapy, while mRNA demand was a headwind.

Turning to strategy. In 2025, we delivered on all 5 strategic priorities we outlined at the beginning of the year. First, we accelerated growth with a transformed customer experience. As I mentioned earlier, we delivered 16% growth in 2025. This was driven by momentum across our portfolio, customer base and geographies, and a testament to our commercial strategy.

We continue to capitalize on our growth portfolio with our key accounts team, which is focused on approximately 20 large pharma and CDMO customers, with the objective of further penetrating these accounts by increasing both the number of product lines they purchase and their overall volume. As we highlighted earlier this year, we are now selling 2.5x as many product lines to these customers versus 2019. In addition, our commercial team is incentivized to cross-sell our entire portfolio. We continue to see a long runway for clear account penetration and cross-selling opportunities. In 2025, we made notable progress on our Asia Pacific strategy. We will continue to invest in 2026, given the growth opportunities in this region.

Finally, we would highlight our investment in services, which was accretive to growth in 2025, and our guidance assumes it will be again in 2026. We have a high attachment rate for services in our analytics franchise and are working to replicate this success across the rest of our capital equipment portfolio.

As Jason will discuss in more detail, in 2025, we balance margin expansion with critical investments in the business. We expanded adjusted operating margin by 90 basis points to 13.8%. Excluding M&A and foreign currency, we expanded operating margin by 240 basis points. In 2025, we made important investment, including legal, finance and IT leadership, along with AI and infrastructure investments. These are critical to ensure we have a scalable foundation to support the growth we see in coming years.

Third, we had an active year of new product launches in 2025 across our franchises. In analytics, we launched our SoloVPE PLUS, the next generation of our SoloVPE with increased accuracy and faster readout time. We saw traction with the SoloVPE PLUS in 2025 as we benefited from the first wave of upgrades. We believe this upgrade cycle represents a multiyear opportunity.

In filtration, we launched our new ProConnex MixOne single-use mixer. We began demos in 2025, and expect to deliver our first placements in 2026. In proteins, we developed and launched a variety of new resins, including 3 new catalog resins in December for the new modality market. We also saw traction with custom resins developed for specific key accounts. In 2026, innovation remains a top priority.

Fourth, we executed on our M&A road map. In March, we acquired 908 Devices bioprocessing portfolio, which is now part of our recently rebranded PATsmart portfolio. In 2025, we cross-trained and merged our upstream and downstream analytics team. This has resulted in a growing funnel of opportunities. We also made progress on our integration of Tantti.

Finally, in July, we announced a strategic partnership with Novasign to develop and integrate the machine learning and modeling workflow into repeat gel filtration system. As part of the partnership, we also made an investment in Novasign to help scale and expand their operations. This further our digitization efforts and highlight that minority investment are another good investment avenue within our broader capital allocation strategy.

In 2026, M&A remains our top priority for capital allocation and our acquisition criteria are unchanged. First, we are looking for differentiated technologies that address key customer pain points across the bioprocessing workflow and their pipeline of modalities. And second, it must make financial sense from a return and accretion perspective. We have an active pipeline and a healthy balance sheet. As a result, we aspire to add new capabilities to our portfolio in 2026. We remain focused on integrating 908, leveraging our high-performing analytics team.

Finally, in 2025, we made considerable progress on our efforts to become more fit for growth, and I'm sure we have the right foundation in place as we look to scale the business in coming years. We made critical leadership hires across the organization. In addition, we made significant investment in our business systems to ensure we have the right tools and processes to scale the business. This included initial AI investments across our legal and supply chain functions. Looking ahead, we will continue to deepen our bench and make system investments in IT modernization, financial planning and life cycle product management.

Before I turn the call over to Jason, I'll provide some more detail on our franchise level performance. Starting with filtration. As a reminder, this is our largest and most diverse franchise. Filtration revenue grew high single digits in the quarter, driven by fluid management and ATF consumables. For the year, filtration revenues grew 8% or 11% non-COVID. This was a bit below our expectations due to the timing of fluid management revenue and the muted demand environment for downstream systems. We continue to work to optimize fluid management manufacturing and the margin of this product line. Fluid management was still a strong contributor to growth in 2025, while ATF was also created to filtration growth after a remarkable year in 2024 when a week was up more than 50%. Looking ahead, we see filtration returning to low double-digit growth in 2026, with strength across our broad portfolio, offset by the headwind from a gene therapy platform.

Chromatographic capped off a strong year with greater than 25% growth in the fourth quarter and 25% growth for the full year. OPUS large-scale columns were the main driver of growth for both the quarter and year as we won several new pharma customers. Given this momentum and recent new customer wins, we see double-digit growth in [ column ] revenue in 2026, offset by lower procured resin mix. These results in chromatography revenues growing low double digit in 2026.

Proteins were again the highlight of the quarter, with greater than 30% growth and 31% growth for the year, coming in well ahead of our prior expectation for 15% to 20% growth. The growth in 2025 was broad-based across ligands, growth factors and customer ratings. This was a very strong rebound as we have nearly recovered all of the 2024 revenue decline from the demand of 2 of our OEM businesses having reached de minimis levels. This is a testimony to the strategy we are implementing, leveraging both partnerships and for our acquisitions to create innovative solution for customers.

During the quarter, we launched 3 new AVIPure resins for the new modality market. With our [indiscernible] technology and Avitide expertise, we can quickly develop new products, helping address customer-specific pain points. In 2026, we see protein strength continuing with low double-digit growth as we expect to see the benefit from the seed we've planted in recent years.

Analytics closed a record year with 30% plus growth in the fourth quarter and 37% growth for the full year or 21%, excluding the impact from the 908 bioprocessing acquisition. We had traction with our SoloVPE PLUS in 2025, and we believe this upgrade cycle will continue to play out over the next several years. Looking ahead, we see analytics growing greater than 20% in 2026 as we continue to see a robust growth from our downstream analytics portfolio, including SoloVPE PLUS and growing contribution from our recently acquired upstream analytics portfolio. That concludes my commentary on our franchises.

As we transition to 2026, our strategic priorities remain. Number one, outpacing bioprocessing industry growth; number two, driving operating leverage on top of gross margin expansion; number three, continuing to innovate and launching new products; number four, integrating recent acquisitions and pursuing additional M&A; and finally, number five, becoming more fit for growth, with a focus on IT modernization and strategic transformation initiatives.

In closing, our fourth quarter capped off a great year where we delivered above market growth and expanded margins while investing in our business and executed on all strategic priorities. In 2026 and beyond, our goal is to do the same.

Now I'll turn the call over to Jason for the financial highlights.

Thank you, Olivier, and good morning, everyone. Today, we are reporting our financial results for the fourth quarter and full year 2025 and providing initial guidance for the full year 2026. Unless otherwise noted, all financial measures discussed reflect adjusted non-GAAP measures.

As shared in the press release this morning, we exceeded guidance and delivered fourth quarter revenues of $198 million, a reported year-over-year increase of 18%. This is 14% organic growth, excluding the impact of acquisitions and foreign exchange. Acquisitions contributed approximately 1 point of the reported growth and foreign exchange contributed 2 points. For the full year, revenue grew 16% on both the reported and organic non-COVID basis and 14% organic.

As Olivier offered details on our product franchise performance, I'll provide more color on our regional performance. Starting with quarterly revenue. North America represented approximately 47% of our total; EMEA represented 34%; and Asia Pacific and the rest of the world represented approximately 19%. North America grew mid-teens, driven by proteins, ATF and fluid management. EMEA grew more than 20%, driven by proteins, chromatography and analytics. Asia Pacific grew high teens, driven by chromatography and analytics. China grew for the second straight quarter, albeit off a low base. After declining in 2025, we are optimistic China will return to growth in 2026, supported by strong orders in the fourth quarter. For the year, North America and Europe both grew approximately 16% and Asia Pacific grew 19%.

Transitioning to profit and margins. Fourth quarter adjusted gross profit was $104 million, and adjusted gross margin was 52.4%. This was margin expansion of 170 basis points versus last year. The year-over-year increase was driven primarily by volume leverage and price, both offsetting inflation and slight headwinds from mix and tariffs. For the full year, gross margin was 52.6%, with approximately 220 basis points of year-over-year increase. The year had similar drivers as the quarter's margin expansion, with volume and price overcoming inflation and some tariff and mix headwinds.

Continuing through the P&L, our adjusted income from operations was $30 million in the fourth quarter, up 19% year-over-year on a reported basis and up about 25%, excluding the impact from foreign currency and M&A. Further, OpEx was sequentially flat to the third quarter. This translated to an adjusted operating margin of 15% in the fourth quarter, which was an increase of 10 basis points year-over-year on a reported basis, but 140 basis points of margin expansion, excluding M&A and the impact of foreign currency.

For the full year, our adjusted operating income from operations was $102 million, a strong 24% year-over-year reported increase, or up 35% excluding the impact of M&A and foreign exchange. The growth was driven by a $68 million increase in gross profit, reduced by $49 million of increased OpEx. $19 million of this increase was related to M&A expenses and foreign exchange. Excluding these items, OpEx grew roughly 13% year-over-year, with investments in our Fit for Growth journey. I'll also note that about 5 percentage points of the increase came from our annual merit and compensation inflation.

2025 adjusted operating margins were 13.8%, about 30 basis points better than our prior guidance, and 90 basis points higher than last year, driven primarily by volume leverage and price, mostly offset by the dilution of our recent M&A investments. Excluding the impact from M&A and foreign exchange, we are very pleased with our operating margins expanding 240 basis points year-over-year. Our full year adjusted EBITDA margin was 19%, a year-over-year increase of 50 basis points on a reported basis, but up approximately 230 basis points, excluding the impact of M&A and foreign exchange.

Continuing through the P&L, adjusted net income was $28 million, a $3 million year-over-year increase. Higher adjusted operating income was offset by $2 million of lower interest income on declining interest rates. Our fourth quarter adjusted effective tax rate was 20%, which was slightly better than our prior expectations due to tax planning actions in the quarter.

Adjusted fully diluted earnings per share for the fourth quarter was $0.49 compared to $0.44 in the same period in 2024. And for the full year, we delivered $1.71 of adjusted fully diluted earnings per share, up 9% over last year and $0.03 better than the high end of our October guidance.

Finally, our cash and marketable securities position at the end of the fourth quarter was $768 million, up $90 million sequentially from the third quarter. This was driven by $26 million of cash flow from operations, offset by $8 million of CapEx. For the full year, we generated $170 million of cash flow from operations. We remain focused on optimizing our working capital to drive improved cash flow conversion.

To echo Olivier, we are very pleased with our execution in 2025 and the momentum we are seeing across the business, which allowed us to outperform the high end of our original organic growth expectations and to drive year-over-year margin expansion. Looking ahead to 2026, we will remain focused on executing on all strategic priorities, driving above-market revenue growth and balancing margin expansion with investments in the business.

I'll now speak to adjusted financial guidance. This includes our current view on foreign currency outlook, for which we are assuming euro to dollar foreign exchange in 2026 to be very similar to the latter half of 2025. As you may expect, we are continuing to evaluate the implications of the recent Supreme Court ruling on tariffs. That said, included in our guidance is the expectation that tariff surcharges and related costs will have a slightly higher impact on revenue and margin than we saw in 2025 as we incur a full year effect.

We are guiding $810 million to $840 million of revenue or 10% to 14% reported growth and 9% to 13% on an organic basis. The difference of these growth rates is driven by just under 1 point of revenue growth from foreign exchange and de minimis impact from M&A.

Regarding revenue growth by franchise, our overall reported growth guidance of 10% to 14% assumes the following: filtration growth in the low double digits. And as a reminder, certain gene therapy platform creates a 3-point headwind for this franchise; both chromatography and proteins growth in the low double digits. And finally, analytics growth greater than 20%.

We expect adjusted gross margins to expand to 53.6% to 54.1% for the full year, and up approximately 125 basis points year-over-year at the midpoint. This will be driven by volume leverage, pricing and productivity, and we expect a relatively neutral mix impact in 2026. Our guidance assumes several million dollars of tariff surcharges, which represents approximately 50 basis points of headwind, which as I mentioned, we will continue to evaluate.

We expect adjusted income from operations to be between $122 million to $130 million. This implies another year of 20%-plus growth and delivers margin expansion of 150 basis points at the midpoint. As we have highlighted, we will continue to prioritize investments to support our Fit for Growth journey. These include IT modernization and capabilities, product life cycle management, further commercial investments, including Asia, and continued build-out of our leadership bench. Still, we expect operating leverage to accompany our gross margin expansion.

Continuing through the P&L, we are assuming $18 million of adjusted other income, slightly lower than 2025 due to lower interest rates, and a 22% to 23% adjusted effective tax rate. The increase over 2025 is driven by jurisdictional mix assumptions and the benefits we achieved in 2025 that will not repeat. That said, we will continue to execute our tax planning strategy and look for opportunities for improvement.

Putting this all together, we expect adjusted fully diluted earnings per share to be between $1.93 and $2.01. This is up $0.22 to $0.30 versus 2025 or up 15% at the midpoint. To help you with your modeling, we expect normal seasonality, with roughly 48% of revenue in the first half. This implies organic growth is slightly above the midpoint in the second half of the year and slightly below the midpoint in the first half due to more pronounced gene therapy headwind in that period. We expect Q1 revenue to only decline low single digits sequentially from the fourth quarter. This positions us well to deliver on our 2026 guidance.

We expect modest sequential gross margin expansion in the first quarter. And as a reminder, the first quarter of 2025 represented our highest gross margin quarter last year. We expect gross margin expansion for the remainder of the year. We expect OpEx to step up sequentially in the first quarter due to annual compensation increases and Fit for Growth investments. We assume OpEx is flat to modestly higher sequentially through the year.

Our balance sheet remains strong as we ended the fourth quarter with $768 million of cash and marketable securities, as mentioned earlier. We will remain prudent in our spending while maintaining flexible dry powder for potential acquisitions. We expect CapEx spend to be approximately 3% to 4% of our 2026 revenue.

As we wrap, Olivier and I would like to thank our Repligen teammates for helping us deliver above-market growth in 2025. We continue to be excited about the opportunities in front of us, and we are focused on executing our strategic objectives yet again in 2026, most notably delivering above-market revenue growth and expanding margins.

With that, I'll turn the call back to the operator to open the line for questions.

[Operator Instructions] Our first question comes from Matt Larew from William Blair.

Jason, on the guide, you walked through some of the cadence dynamics in terms of the gene therapy headwind. But just in terms of framing the higher and lower end, I think Olivier had called out the policy environment in terms of maybe a low-end swing factor. So I'd be curious what you're hearing from customers in terms of confidence there, but maybe especially in light of recent tariff updates.

And then the higher end of guidance, I think you called out some larger funnel opportunities. I would just be curious if those are similar to some of the larger land grab opportunities you've had in the past couple of years and sort of what the visibility of the timing for those might be. So just helping us think about the higher -- low end given the midpoint centers on that 11%, 12% that you had already framed.

Yes. Matt, I'll start, and Olivier will certainly jump in as well. I mean, for some of those pieces, right, you brought up tariffs. Look, for us right now, tariffs is still a big open question. I think the good news for us is that when you look at where the administration is talking about alternatives to the current regime, that it's going to be pretty much a push for us, maybe even slightly better. But again, for big context, keep in mind, tariff surcharge is far less than 1% of our total sales. So we don't feel like that creates a lot of noise. I think some of the other opportunities, again, for us on the onshoring, those tend to still be pushed out until 2027. And so we don't really see them as a big driver for this year.

But I'll let Olivier talk to some more of the customer feedback.

Yes. No, absolutely, Matt. I mean we have a very strong funnel of opportunities. As you know, we are tracking that very specifically, particularly in the funnel with high probability, above 50%. This is at the highest level ever and significantly higher than a year ago. So we are very excited about it. Indeed, it's all about how do we manage to translate that high probability funnel into orders and sales this year. But overall, we are in very good shape here.

Our next question comes from Dan Arias from Stifel.

Jason, Olivier mentioned the commitment to op margin expansion this year. I'm curious just how as a priority that ranks relative to M&A? You were 100 to 200 basis points above the range, excluding M&A. In 2025, you were below it, including M&A. It sounds like you're interested in what might be out there deal wise. So I know it's never black and white. I do appreciate that. But if I were to just sort of ask it plainly, is delivering on 150 basis points of op margin expansion something that you intend to hit barring the unforeseen because you want to march back towards 20%? Or is it more like we intend to hit it unless we've had something that has us not hitting it because that's what's good for the business?

Look, I think to your point, it's never black and white, right? Every deal is going to have a strategic merits as well as the implications, both short term, right, and medium and long term on the financials. I mean, we acknowledge, right, the headwind that we've seen this year or rather '25 last year, but still stand by the firm strategic benefit and the integration that we're having with both the 908 assets as well as Tantti.

As we look in to go forward, we'll still look at other ways of capturing technology partnerships like the Novasign, right, minority interest is out again. It eliminates that impact on margin. And then as we look for other deals, again, we will certainly be prioritizing those that have more immediate accretion to the financials, but again, I can't say that for our long-term strategic benefit that they might not still be worth a short-term dilution. So we're going to keep a well balanced look in that.

I'll end now that, that aside, margin expansion remains a top priority for us, along with our above-market growth strategic imperative. And so those will be first in line. And you can see, I think we expanded margin. I think, again, you made the point, excluding M&A, 240 basis points year-over-year in '25 and teed up another good step up of 150 basis points at midpoint. So we're delivering what we've set out to do.

Our next question comes from Doug Schenkel from Wolfe Research.

A follow-up to an earlier question on pacing. So the Sarepta headwind, as you know, annualizes mid-year. ATF consumables sensibly pick up steam as the year progresses. And there was a lot in the Q4 updated in your prepared remarks that demonstrates coming out of what has been a stronger than market period that momentum continues to build. With all that in mind, in spite of that, your comments on pacing suggests that you're assuming a normal first half versus second half revenue split. Why is that? Is this just prudence given continued market uncertainty? And by extension, are you assuming the market is not completely normalized this year? So meaning market normalization would actually be a source of upside to the guidance range?

Doug, Olivier here. Yes, I think here in the last part, you summarized the situation very well. I mean that's why we have issued the guidance. We have issued from 9% to 13% organic in 2026. There are stuff we control, there are stuff we don't control fully. And the stuff we control, the funnel, I mean, we've got, as I just mentioned earlier, the highest funnel we've ever had. We've got great opportunities across our entire portfolio of products.

Look at what happened in 2025, I mean the 3 franchises that grew by far the highest other one outside of filtration, which is a testimony we really have a fantastic broad portfolio of products. So this is we control what we control less indeed is what can happen from a macro point of view. And if I start maybe with MFN, I mean, I think it's fair to assume, some of these big pharma companies are digesting all of the deals that happened in quarter 4. And this might mean a little bit of delay on some specific CapEx spending decision that everybody is hoping to see coming earlier than later in the year.

And then the second piece I would pick up as well is the approval. I mean, last year was okay. I mean there were 25 monocular antibody/biosimilar approved similar to 2024. There were only 5 new modality approvals versus 7 in 2024. So far this year, after almost 2 months, there have been very little FDA approval for biologics. So these are stuff we are well watching and depending how they play out one side or the other, this is where the guidance could move one direction or the other indeed.

The only thing I'd add, Doug, is just the guide or the, I'll say, the direction that we shared in 1Q, but we still start off the year strong, with it being down only as we said a couple of single-digit points sequentially from fourth quarter. So again, we still believe that we're starting off 1Q on the right foot.

Our next question comes from Casey Woodring from JPMorgan.

Great. I have a couple of quick clarifications. So can you just clarify what 1Q organic growth is netting out to? I think I'm getting to somewhere around 10%. And then also, can you walk through the guidance range for the year? You guided to low double-digit growth in chromatography, proteins and filtration. But the low end of the guide calls for 9%. So maybe just walk us through how to reconcile those numbers?

And then just as a quick follow-up, kind of curious what is embedded for ATF within the low double-digit filtration guide? You called out ATF consumables was strong in 4Q and the blockbuster has been in focus here. So just curious what's assumed there.

Okay, Casey. So a few questions. So I'll start answering probably your first and your last question, and then I'll hand over to Jason for the middle one.

So in terms of Q1, and Jason just mentioned it, we were really in good shape to deliver a very strong Q1. In fact, we expect Q1 to be sequentially only down by a couple of [indiscernible] versus quarter 4 of 2025, which is a really great performance. I mean we've always talked about seasonality, and typically quarter 1 is supposedly one of the weakest quarter in the year. We won't see a lot of it. So we're really in great shape to start the year.

And then before again, I hand over to Jason on the middle question, in terms of ATF, I mean, you know like we had incredible growth in 2024. I mean ATF grew more than 50%. Last year, ATF was still accretive to filtration growth, which is absolutely great performance. We are very excited about that business. As you know, we are getting designing in multiple late-phase commercial drug lately, and we still have very big hopes about the runway we have on that specific product line for the next several years here.

Jason, do you want to add anything?

Yes. Just a quick clarification. So Casey, as we ran through the year as I did in the prepared remarks to go through the franchises, I was discussing reported results, so not organic, not FX adjusted. Of course, the 9% to 13% is the organic view on the reported basis, it's 10% to 14%. So that's just a quick answer. We don't have a great way to roll through all those pieces into the franchise. And so that's the difference.

Our next question comes from Puneet Souda from Leerink Partners.

This is [ Philip ] on for Puneet. This is similar to several questions from earlier, but -- just you previously directionally hinted at 11% to 12% growth for 2026. And I just want to make sure if there's anything you're seeing since then that may have changed that softening your view? You referenced MFN and large pharma may delay CapEx decisions after digesting deals made in 4Q. So is there anything there or alternatively, the delta there with the 9% to 13% mostly prudent and you're more confident? And maybe if you could just walk us through any of the other puts and takes in organic growth for this year? Just like any levers on what may get you to the higher end versus the lower end?

[ Philip ], I just start by saying we had a really great year 2025. I mean we delivered above our initial organic growth guidance. So at this point, I mean, call it, mid of February, we think the 9% to 13% guidance is appropriate starting point for 2026. And we mentioned a couple of times already, Q1 will really position us very well to deliver on that guidance.

And then I just would like to say, this is also very well aligned with the framework we shared with all of you previously. We always said we want to outpace market by at least 5%, but we do have this 200 basis points of headwind in 2026. But we think we were really well aligned with that framework we talked about earlier. We have a number of opportunities across our customer base, our product portfolio, and that is not all contemplated into this guidance for sure. But as I mentioned earlier, there are stuff we control, how do we translate that opportunity funnel into orders. There are stuff we control less, which is a macro environment. And yes, we just want to see how people are going to move forward with this MFN agreement and when are they going to put the trigger on spending CapEx because we all see still slow CapEx spending at this stage, but also getting potentially more IT approval as well to accelerate growth. So that is really the framework we are working on right now.

Our next question comes from Justin Bowers from DB.

I really appreciate you breaking out the organic versus inorganic margin performance for 2025. And just wanted to also clarify and understand some of the moving parts. It sounds like the 50 basis point headwind you called out, that's related to margins, that's sort of the clarification. And then two would be, what are some of the other moving parts that we should consider as it relates to the organic margin expansion?

Yes. I think you're referencing the -- sorry, sorry.

No, go ahead. I was just saying in 2026.

Yes, of course. Yes. So I think you're referencing the 50 basis points of tailwind we called out for tariffs. So again, that's just the impact of a small amount of surcharges and then really passing those through as cost or say, 0 margin. In addition to that, again, when you look at the year, again, we've talked about good gross margin expansion, driving volume leverage, price, productivity, of course, absorbing inflation and other pressures that we have, mix is pretty nominal from an impact for the year. And then it's all about our OpEx management. And again, we've incorporated a continued investment in our Fit for Growth journey.

And when you look at sort of the guide, we've talked about a step-up in OpEx in the first quarter, which really comes down to walking in at the beginning of the year and having some annual compensation increases as well as some investments that we had prioritize to push into the beginning of the year. And then that OpEx basically stays flattish to slightly increasing through the course of the quarters. And therefore, we're able to get more operating leverage. So again, we delivered 240 basis points of organic margin expansion in 2025 and believe we've got a good objective here for 2026 to again expand margin.

Our next question comes from Dan Leonard from UBS.

I'd like to talk about the analytics portfolio a little bit. I'm surprised by the 20% growth forecast for 2026 on a 37% comp. I understand that SoloVPE is a multiyear product cycle, but when do tough comps become a challenge? And how far along are you through that upgrade cycle?

Dan, really good question. You're right, like delivering above 20% growth on a business that has been growing so much in '25, it sounds like, wow, that's really impressive. I mean, we are very confident about it for multiple reasons. And you mentioned one of them, which is the SoloVPE PLUS upgrade where we are just at the beginning of the upgrade cycle. I mean we literally upgraded less than 100 units in the last 2 quarters of 2025. We've got 1,500 to 2,000 units installed base right now where we see potential to get upgraded. So it's going to be probably a 2 to 3 years upgrade cycle in front of us and until we launch new version of Solo. So that is one of the big tailwind.

Beyond that, as you know, we acquired 908 last year and beginning of March of 2025 and we merged the 2 sales organization. And I have to say, I mean, the funnel improvement we've seen over the last 2 to 3 quarters has been absolutely phenomenal. And now for our sales team to have -- instead of having only one product to sell, to have 5 and very soon 6 products because we're developing another one we intend to launch toward the end of this year as well, is also a great motivation factor, and we're getting a bigger seat at the table with this much broader portfolio of product we had.

And then finally, I would just mention also the FlowVPX part of the offering, where, as you know, we had a lot of attraction both at line, but in line as well [ where ] about 25% of every system we've been selling for the last 1 year now that includes a FlowVPX technology. So we've got really multiple angles. That's why we are so positive about it and considered about the potential growth in 2026 here.

Our next question comes from Matt Hewitt from Craig-Hallum.

Congratulations to the strong finish of the year. You talked about it a little bit, obviously, new products have been a key driver for Repligen. And as you look at fiscal '26, do you have a pretty robust pipeline? Is that across the portfolio? Or are there specific segments in particular where you look at opportunities to launch the new products, gain share, maybe expand the markets a little bit?

Matt, great question. I mean, as you know, innovation is really in our DNA. And if there is the first word, I always mention about Repligen [ 3 ] innovation. So yes, you're right. I mean, we've been successful in the past. We've been successful in 2025. We will be successful in 2026 and beyond by the launch of innovative products. And we are working on several of them right now.

I mean I start for once with protein because as you've seen, we had incredible traction on protein in 2025, and this is just the beginning of the journey. I mean we have now launched 4 catalog resins. We are intending to launch at least 3 or 4 extra catalog resin this year in 2026, meaning we're going to start to have a really sizable catalog of operating for our customers. We're mostly focusing on new modalities right now, but we are starting to look at other opportunities as well in more established a drug that might have been on the market for a long period of time because we see a lot of opportunities on that side as well.

Well, one thing I would add on protein as well. We are working on multiple custom projects for specific big pharma customers as well, which we don't talk about, because these one are exclusive, but this is another reason why this franchise has been doing so well in the last 12 months.

Beyond that, obviously, we've got multiple opportunities of innovation on the rest as well. On filtration, I would probably just mention one, main one, which is, as you know, the potential combination of ATF with the Raman technology, the MAVERICK technology we acquired via 908, where the point where we've seen that technique, this is working very well. Now it's in the hands of our product management team that will decide how and when to potentially launch that combination. We think that could be a big differentiator to add even more hurdle for potential competitors to ATF, but also to accelerate the growth of our PAT portfolio, the 908 portfolio.

And then really, probably the last piece I would mention as well is we are looking at broadening that PAT portfolio significantly and beyond 908, beyond the FlowVPX, we have acquired the right from a company called Daylight for mid-IR technology several years ago. And thanks to the great technology team we have from 908, we are now at a point where we are already working on a beta version of this mid-IR technology that could be a total game changer in the industry for both the [indiscernible] USDF, but also for measuring protein aggregation as a concept. Customers who are testing it, love it, and this launch, we expect to have toward the end of this year, beginning of 2027, will be another big game changer for the industry. So very excited across the board, plenty of stuff coming our way in 2026 here.

Our next question comes from Brandon Couillard from Wells Fargo.

Olivier, I understand China is a pretty small region, but you've been more constructive on orders the last 2 quarters there. Any update on the incremental investment that's still needed to get the commercial organization where you'd like it to be? And if you could put some bars around the expected growth rate you see coming out of China in '26 and how that might compare to the broader bioprocess market in that region?

Yes. Thanks for the question, Brandon. I mean, you're right. I mean, China has become pretty small for us. I mean, last year, it was about 2% to 3% of our total revenue. We used -- it used to be about high single digits of our total business during COVID. So we were aiming to definitely grow that region faster than the rest. And the first signs are pretty positive. I mean, you're right. I mean, we now have 2 quarters in a row of top line growth in China. In fact, order in quarter 4 were really very strong. So we are very excited about that. And we are hopefully seeing China really going back to significant growth from this year onwards.

I don't have a specific number to give you. I think I mentioned several times. I know that reason very well, which is why we are very focused on adding the right amount of people. We opened a new office in quarter 3. We are ambitious down there. We are working on several partnerships with local companies across our entire portfolio, and we're definitely aiming to overpace our entire total growth in China and then really making sure this is region become much bigger for us over the next 3 years than it is today.

Our next question comes from Matt Stanton from Jefferies.

Olivier, maybe one for you. I think in the prepared remarks, you talked a bit about service. It was accretive to growth in '25, sound pretty good about it here again in '26, obviously strong on the analytics side, but maybe just talk about the service opportunity more broadly? Is that on new products? Can you go back to the installed base you have out there? And then maybe talk about -- is there any tweaks you've made to comp or how the commercial organization is incentivized to go out and capture that runway on the service side in front of you?

Matt, really an interesting good question as well. I mean services represented approximately 6% of our total sales in 2025. If you just benchmark us versus the industry, we are about 4, 5 points below where others are. And so we know we have a really great opportunity to grow on that side.

And I'll give you just a very, very interesting checkpoint here. I mean our attachment rate for the analytical part of our portfolio is pretty high. I mean, it's above 50%. You would say it's almost at benchmark. Our attachment rate for the larger-scale equipment, those RS downstream system, even our ATF system, that system is only significantly lower. So that's the area where we have specific area of focus right now.

And you're absolutely right. It all starts with commercial team where you need to make sure those commercial team are being incentivized to get more service contracts signed at the earlier point of contact. But we are also, at the same time, starting to look at our service business as a more independent P&L and we're adding commercial resources that are specifically reporting to our service leader to make sure we can grow that business faster than it has in the past. So multiple stuff we are looking at. Our real ambition in a few years from now is that services would indeed be at benchmark, meaning about 10% of our total sales.

Our next question comes from Brendan Smith from TD Cowen.

I actually wanted to ask just a follow-up on your commentary, Olivier, on the MAVERICK integration with ATF and just see if you guys see an opportunity to launch that this year? Kind of just curious how we should think about that in the context of -- out of '26 guidance? And maybe also, if you expect that to kind of replace the legacy product altogether or if you plan to kind of offer it with and without the MAVERICK added moving forward?

Brendan, yes, I'm not sure yet. To be very open with you, Brendan, we are looking at different options here. Again, it's in the hand of our product management team to assess when and how the launch would -- could potentially make sense. I think in any case, that would be an option. I mean we are not going to force people to buy Raman technology on top of our ATF system and so on. That would be an option for our customers. Depending again on the traction we get and so on, we might make it more and more of, I would call it a force option, but maybe more, hey, you should really go for it versus hey, are you aware about the fact that there is an option to track what's happening in your bioreactor via the ATF loop. I'll tell you more about that for sure in the next couple of quarters once we've made a further decision on how and when we would potentially launch that combined technology here.

Our next question comes from Subbu Nambi from Guggenheim.

In your prepared remarks, you spoke about the muted downstream demand in the second half. What drove that? And how is that shaping your 2026 guidance? And also, what are you assuming for capital equipment in 2026?

I didn't get the first part of your question. What was about downstream? I didn't get it, Subbu, sorry.

Were you asking about the demand for downstream systems?

Exactly, yes, the muted demand for downstream systems.

Yes. No, absolutely, Subbu. So I mean, I think our direct competitors have mentioned several times that CapEx spending was pretty muted in 2025. We had an interesting year, as you know, where Q1 was really very weak on very high comp, then Q2, Q3 were very strong. In Q4, even though sales were incrementally higher by 10% versus Q3, I mean, versus Q4 2024, the overall demand was kind of muted because we had pretty high compound.

So if you look at the overall year, I mean, CapEx sales for us were more or less flat between 2025 and 2024. I think it's fair to say the market was down significantly. I mean, we've heard people saying maybe as much as high teens down between '24 and '25. We were flat, which is better than others. But yes, it's absolutely fair to say there is one area where we would like to see some real improvement and where we would like to start to see customers pulling the trigger and spending more money is definitely on CapEx equipment. So that's what we're expecting, hopefully, to see very soon and partly via some of these onshoring projects, hopefully accelerating towards midyear with hopefully some grant coming towards the end of this year here.

Perfect. And just to confirm, you're not assuming any massive growth in capital equipment? I know the answer, but just confirming.

Just to repeat, Subbu is asking what is our expectation for capital equipment in 2026.

So for 2026, we are still aiming for low double-digit growth, Subbu. So obviously, we're getting a lot of traction from our analytics business, as you know, which is then fair to assume this is going to drive the majority of that low double-digit growth we expect in 2026. For the rest, which is more the downstream system, we were expecting probably somewhat flat sales in 2026. This could be a really nice upside, again, if we start to see a better macro on that side here.

That concludes the question-and-answer session. I would now like to turn the call back over to Olivier Loeillot, CEO, for closing remarks.

Yes. Well, first of all, many thanks for joining our call today. I mean you heard us, we were really thrilled with our 2025 execution, and this has allowed us to deliver a fantastic 2025 resource. In 2026, we remain focused on executing on our strategy. And as usual, serving above-market growth. So thanks for your time, and talk to you very soon.

All right. Great. Thank you, everybody, for joining us today. My name is Casey Woodring from the Life Science Tools and Diagnostics team here at JPMorgan. Pleased to be joined by the management team of Repligen. We'll do the corporate presentation first and then leave time for Q&A. So with that, Olivier, over to you.

Thank you so much, Casey. Thanks for coming, and looking forward to telling you a bit more about Repligen. The usual safe harbor statement. So for those of you who are not completely familiar with the company, we are headquartered in Walsam, Massachusetts. We are really a pure bioprocessing play, about 2,000 employees in total. And for the vast majority of our portfolio, we've got dual manufacturing in U.S. and in Europe. And finally, at the midpoint of our guidance in 2025, we were at [ USD 733 million ] in sales.

What's our vision? We want to be the global innovation, and you will hear me mentioning innovation several times today, leader in bioprocessing with a very extensive portfolio of very differentiated data-driven solutions across most therapeutical modalities. So there are a couple of takeaways, and I'm going to start with that so that you remember them right at the beginning. The first one, again, is innovation. So we've been really playing on that side for the last 10 years, and we are playing in a pretty large bioprocessing market, as you know, and we play against very big competitors. So for us, really, the way to win is via launching those very breakthrough innovation and really supporting customers in their path towards more yield, better cost structure and so on. So really innovation at the core of everything. We have a very diversified portfolio of products. I mean I'm sure many of you start to understand it. I mean, last year was really a showcase where we've had really performance across the entire portfolio. And we want to say we have got one of the broadest portfolio really in the industry today.

And the good news is we've got multiple levers to keep on outpacing industry growth. I'll talk about that quite extensively later on. I have to mention a few here. Obviously, those breakthrough solutions we have. But beyond that, also, we are still very much clinical versus commercial. And we also have a very, very, very, very solid sales strategy on the key account side that has really enabled us to open also at multiple big accounts, and we're just really at the beginning of the journey. And finally, definitely some great successful with new modalities, and we'll talk about that quite a bit.

We want to expand margin. I mean we are absolutely focused and Jason and I with the company for about 2 years. It's really at the core of our hold every day, and we've done a pretty good job last year, but we're on a path to do even better over the next 5 years and reach 30% EBITDA margin in the next 5 years. And finally, we are very heavy on delivering on what we say we're going to be doing. We have 5 strategic properties in '25. We've delivered on each of them. And we decided to kind of keep almost the same for 2026. because we think we are in a pretty long-term type of growth journey here, and there is no reason to change those priorities, but we've done multiple progress over the last 12 months here.

So what is giving us right to win again is innovation? So when you look at our portfolio, we've got the 4 main franchises, filtration, rhamatography, analytics and proteins. In each of these different product lines, we've got really very innovative products and innovative meaning like we estimated almost 80% of our portfolio today, we don't really have competition. And this innovation was always focused on enabling better yield, productivity gain for our customers and also enabling our customers to go faster to market.

We've got the advantage of the size. We're not that big, but pretty flexible. So we are very nimble, very customer centric. I mean, that's really part of our DNA in the company and we are really obsessed to meet our customer needs.

Growth portfolio. I'm going to show you in a minute what it's all about. I just want to say a few words to start with on digitization. We know it's at the center of the preoccupation of our customers right now. We seem to have a really good chance with our PAT technologies, but we've got a path forward to really capitalize on that and we lead the pack in terms of the digitization journey of our customers.

So we're a fast-growing company. I mean we took 2019 because that was before COVID and then '25, which was last year because as we all know, there was a lot of noise during COVID. So we thought it was quite impressive to see that when you exclude the cabin noise in between, we had a CAGR of about 18% during the last 6 years. And then when you look at the total addressable market, this is even more stunning in a way that our total addressable market was only USD 3 billion 6 years ago, and now we're up to certain -- so if you make the calculation, midpoint, $733 million, we are about only 2% of the market.

So do we have runway? Yes, we do. We have a lot, a lot of runway and we are very happy to have that huge total addressable market opportunities because with the breadth of the portfolio we have, we know we've got incredible future in front of us.

So what is this broad diversified offering. I think this slide is probably the one I like the most. It shows you really how we've been evolving over the last 10 years.

Look on the left side customer-wise, 10 years ago, our top 3 customers were 2/3 of our business. Last year, our top 10 customers was 1/3 of our business. So when you talk about diversification, I mean it's a fact like we've done an amazing job to really reach out to many more customers and probably big pharmas and big CDMOs as well.

But from a franchise point of view as well, it's quite stunning to see like 10 years ago, we were almost 3/4 of our business in protein, a little bit in filtration and come. There's a shift toward more filtration with multiple acquisitions and strengthen chromatography business and now a bigger play into analytics has enabled us to also have a much more diversified portfolio of product today.

And then finally, looking at modalities. We went from being heavy, heavy, heavy on monoclonal antibody, was still heavy, heavy, but a bit less. We are doing about 16% of our sales in new modalities and we'll talk a little bit about that, of course, later on as well. So really a very diversified portfolio of products.

And that's on a picture. What's better than a picture. When you think about a full workflow that is being utilized by our customers, we pretty much have the main buckets. If I want to really simplify, we've got 3 main gaps, borates cell culture media and viral filters. But in every other bucket, we do have a play today, a smaller or bigger one, but we are really happy that we are absolutely can support customers, partly they have specific needs of custom solution in the different buckets today.

What about the multiple levers to outpace industry growth? So we like to create solutions. So innovation, again, I mean and innovation technology really creates new markets. And that's why we like the way we operate in that environment is we're not just coming to compete with big guys who are doing amazing things are here to just come and try to create new solutions create new market segments that are going to be add up to what exists already on the market.

Digitization, I talked a little bit about already, it's a perfect example where we are coming now with brand-new PAT solutions to enable our customers to be faster and more efficient. And we have a real track record in M&A. What I think Tony and the team have done so well in the past by all of this acquisition was really to add technologies that were somewhat next to some of the other technology we had and that we could not only embed within our own portfolio, but make -- create products that were even better or that were even newer than what this company we are bringing us. And the best example we had is the acquisition of Meta Nova 2 years ago, which was stainless steel mixing technology based on magnetic steering. And now we launch our own single-use mixers, which we think have the best technology in the industry right now. So we like to create solutions.

Increasing our positions, of course, I mean, we are playing into that big market. So we're trying to make sure we're opening more doors. And that's where really commercial excellence is of essence. And we've got an incredible commercial organization that has enabled us to really penetrate big pharmas and CDMOs really very largely over the last several years. Here again, we are really at the beginning of the journey. You'll see in one of the next slides that we are sitting about 2.5x more products for each of these accounts than we were 5 years ago. But in many cases, we are just starting to sell those products.

Meaning like the runway we have for the next 10 years is going to be really very, very big with all of these customers. We have a sales team that is really not capable to cross-sell this portfolio of products. And if I look from a geographical point of view, we're going to have a focus on Asia because we are a little bit subpar today in Asia. And finally, leveraging the mix. I mean, we're still very much clinical, even though slowly, but surely, we are moving towards more commercial products. I mean, the split has changed a little bit last year. But obviously, the more clinical you're supporting the more tailwind you get because every time a product makes it to the market, you're getting obviously a significant increase of volume demand from your customers.

And finally, we've got a portfolio that's really well suited for new modalities. So we all know there has been some headwind in 2025 which is one of the reasons why we're particularly happy about the performance we had because even with those headwinds, and I would never have beat in 2025, new modality would be potentially diluting our growth. But this did happen. We are still extremely positive about it and know that this is going to come back. probably going to take another year or so, but we are absolutely convinced that's going to be accretive to growth from 2027 onwards.

So that's about some of the levers we have to our I just quickly go through that slide. We estimate about 80% of our portfolio is really very differentiated just to talk about product line like ATF, product line like OPUS, all of these PAT technologies, but really what's very important is we are extremely focused on our customer needs. There is need for new products that are much more tailored for these newer products that are being launched on the market and where we probably all of us had the luxury back 5, 10 years ago to launch a product that was suiting the vast majority of product on the market.

Today, you have to have that GT to be much more customer focused. And innovation, again, we have about 50 products in the last 5 years, so about 10 per year. And last year, they represented the one launched in the last 3 years, represented about 10% of our sales. So it's pretty significant innovation again.

Digitization. So I'll spend maybe a minute on this one because we talked a little bit about TAT. I'd like to say we are pretty much where Google was probably 25, 30 years ago or so, which is what the point where the industry is still collecting data right now. And the more data people are going to be collecting the more intelligence they are going to be and the more capable, they are going to be to become even more intention and even more efficient.

So what we are doing is we are trying to couple our PET technologies with our systems, so that what was initially an at-line analytical solution is becoming slowly but surely in-line analytical solutions that enable customers to track performance of their manufacturing batches life which is a huge safe of time, but also which is enabling them to definitely stop the batch at the right time and get higher yield for the batch of their manufacturing.

And then this is where the next step is going to come, which is going through more advanced analytics. You might have seen we took a minority investment in an Austrian company called Nova sign in July of 2025. And this is digital twin we are going to implement into on-generation small-scale TFF system. That is going to enable customer also to run their processes in a much more efficient manner.

What is the future vision of course, AI. I mean we all know about that. We are leaving the AI power right now every day, each of us in our companies. We know that our customers are expecting to be able to develop their processes much faster using AI tool, but also manufacturing in a more efficient manner using AI tool, but they can only do that if they collect the data, they have system with this data integrated, data -- integrated and if they have some of these advanced analytics already implemented. So it goes step by step. We think we are in a very strong position because we are leading the pack on step 1. We are pretty advanced on step 2, and we are going to start to be much more active on 3 as well.

So what about I mentioned already the increase we had with our key accounts, about 2.5x more products per key account between 2019 and 2025. In terms of geographical split, Asia is only 17% of our sales. And we know like probably the second closest to us out of the 4 big guys, 20% of its sales in Asia, but most of the others are those '25. So we really have to speed up our growth in Asia. We onboarded 2 new leaders beginning of 2025, 1 leading all of our Asia business, the other 1 leading China in particular, and we are working on a very specific Asia strategy in China for China and for the rest of Asia as well.

So mix, nothing really much to comment here. I mean, again, we like to say we are a 10-year young company bioprocessing company. I mean I used to work in another organization where I had kind of the similar split between commercial and clinical I don't see a reason why slowly, but surely, we are not going to move toward more commercial last year, increased by about 5 points in terms of commercial, and that's very much linked to us being able to get designing into commercial drug via some of our raising customer resin offering and fleet management as well.

And then in terms of product mix, if you remember last year, Newmont were a little bit higher. So you could say, wow, what happened with new modality. I say, wow, well done, guys, because even with some of the headwinds we had in '25, we've managed to beat our consensus several times and increase our guidance for the full year. And it means like the rest of the business, which is monocular antibody has been doing extraordinarily well for us in but still, we are very eager in pushing on new modality. And as mentioned earlier, we know it's going to come back to being accretive to growth in the near future here.

Okay. So what is the story here? 33 million midpoint of guidance last year. We know the market is growing anywhere between 8% and 12%. At least in the past, bad year was 8%, good years was 12%. We are aiming to be 5 points above that. So we think last year at the midpoint of guidance, we were slightly above the 5% above market. We are aiming to do the same for the next 5 years. And this year, obviously, as you all know, we have 200 basis points of headwind from a specific gene therapy drug that had some hit in 2025.

But with this 5% above market growth, where I mean to be a double-sized company by 2030. We are very committed to margin expansion. So again, at guidance midpoint, we are landing around 19% EBITDA on sales. That's definitely not good enough. I mean we are absolutely working on it, and we have a very good path forward. Jason and I to be around 30% by 2030. We are still a younger company that is growing very fast. So we are really making sure like we are combining that those huge growth we've been experiencing in the past and that we know we're going to be experiencing in the future as well with getting fit for growth because that's critical for us. But we're going to get, first of all, a lot of volume leverage by just doubling the size of the business. We're going to get some positive impact from price and product mix. And then we're obviously very focused on productivity. And finally, we are going to get OpEx leverage. I mean we've invested quite a lot in 2025. We're still going to invest quite a bit in 2026 to really scale the company to be able to operate that a double-sized company in 5 years. So we'll really start to see leverage towards the second half of this 5-year cycle here.

We're working selective investments, so R&D, innovation, again, we're spending about 6% to 7% of our sales every year in R&D, which is quite significant. I mean, I think it's significantly higher than most of our competitors, and that's because it's really part of our DNA the commercial investment, we've done quite a bit, and we're starting also to look at AI tool, not only in commercial, but across the board, but partly on the commercial side, and we're going to build out that APAC presence.

Last year, we opened 3 offices in Asia, 1 in Singapore, 1 in Japan, 1 in China, and we are really now in the staffing mode to make sure we are capable to grow much faster over there. And then in terms of dual site manufacturing, I mentioned, the vast majority of our product portfolio. We already have dual siding. There are a couple of areas where we still have to do some modest investment to move that forward.

Fit for Growth, we invested in a lot of really key poll. We built a legal team. We really reshaped the finance organization very simply big credit to Jason and the leadership as well. I mentioned AI. I mean we are already using a lot of AI tool. I mean, we are using AI on legal side with a tool called IronClad. That has been a real game changer for us. but also Palantir, we deal with those carriers mid of last year to help us on the global supply chain side. We've moved towards more of a business unit, cross-functional alignment, meaning as we are becoming a little bit bigger now, we think it's important that each of the business units who have got kind of different needs can refocus on what is their top priorities. And we had a huge focus on services and great progress on that side.

And '26, we are going to continue to build out that bench. We have a few further investment to make still some of the IT modernization, financial planning, and we're going to embed a life cycle management tool. And we've got, obviously, some strategic transformation initiatives that do include the margin expansion projects.

Finally, delivering on strategic priorities. So we've done a lot in '25. Again, we think we've grown more than 5% above market at the midpoint of our guidance with 15% organic non-COVID growth. I know I got the question, why do you still talk about COVID. We unfortunately were the last companies that had some significant COVID sales in 2024, which is why we still had to call about non-COVID in 2025.

Expansion of machine guidance implies 150 basis points of EBIT margin expansion, excluding M&A and FX, continue to innovate. I mean, we had 3 really important launch the new version of our protein concentration tool solo, which is becoming a huge success story second half of last year. So first single-use mixers, as mentioned already. And then we launched several new catalog and custom resins. We acquired 908 bioprocessing assets, which has been integrated to the organization around midyear of 2025, and we made that minority investment in Nova sign. And finally, getting to growth we made all of these key hires, and we've invested in quite a lot of infrastructure, '26 similar. We're going to grow -- outpace macros, just taking into account, again, the headwind we have on the gene therapy drug. We talked about how we're going to do that margin expansion will keep on going. We have a lot of product launch in 2026. One of them that I'm really excited about is, I call it the little browser of solo VPlus which is the new generation of our small-scale TFF system. The reason why I call it a little brother, we have a huge installed base like we had on the solo VPA side. And we know like the success that we had to generate that replacement market is probably going to be duplicated here with the TFF story here. So that's something we are very excited about.

M&A. It remains our priority one. I mean, we do have quite a lot of dry powder, as you know. So we were definitely looking at several opportunities but also considering to do more minority investment because we really enjoy what we've done last year. And finally, for growth, it will never stop, for sure, at least not for the next couple of years, but we are really making sure we were getting the right team and the right infrastructure to operate that double-sized company in the next 5 years or so.

Thank you very much. All right.

Great. Well, that was a really helpful overview. Maybe to start just on 2026. Against the backdrop, you've seen 2 consecutive quarters here of over 20% order growth. The 2026 top line framework you've laid out getting to around 11% to 12% on the top line. It assumes about 500 basis points of market growth offset by 200 basis points of gene therapy headwinds. Can you just walk us through what's embedded in the 2026 framework and the divergence between what you've seen on the order growth side versus what we're kind of starting on for 2026?

Yes. So as you know, KC, we are only reporting our Q4 and full year results at the end of February during our earning call and we'll guide as well for 2026. But I mean you just exactly summarize the framework the way it is. They basically we are aiming to outpace market growth by 5 points. And we're going to have this 200 basis point headwind what I want just people to understand about the orders because you're right, we've said both in quarter 2 and quarter 3, our orders grew more than 20%. This is reported order growth. So this does include both the FX impact as well as the acquisition of 900. So if you would retreat that and then you would compare it to the organic growth we talked about, which is around 15% or so, then the gap would be much lower. So just to help you.

And secondly, the comp were for sure, easier for us in terms of orders in quarter 2 and quarter 3. And from this year onwards, comp are going to start to become a little bit more difficult. But yes, we are very happy about how the first 3 quarters of 2025 played out and the full year as well and I'm looking forward to a great 2026.

And you've laid out a framework for operating leverage over the next few years. You talked about it a little bit in the presentation, where the gap between OpEx growth and top line growth is wider in the outer years. But the path to get there isn't necessarily linear, right? So can you just walk us through the puts and takes around the margin framework and how we should think about operating leverage in 2026 and then further out?

Yes. To your point, I'll point us back to the road map page that Olivier shared and we tried to have the key buckets that will get us to that 30% EBITDA in about 5 years. You'll notice that we didn't quantify them, but the buckets are, I'll say, relatively scaled, meaning the biggest contribution is going to be the ability to get OpEx leverage, which is to your point, growing sales at a faster rate than OpEx. But the point on the -- it not being linear is that fuel the Fit for Growth journey that we're on, we do recognize we probably need to make a bit more of that OpEx investment in '26 and probably into '27. And then as we go out later in that time frame, we'll be able to more leverage. But again, for us, that's a core foundation to be able to have a sustainable, I'll say, set a team, an infrastructure, the systems, the processes have to be able to have a business that's double in size.

The other buckets, again, we outlined as price, of course. We've been able to achieve that and see that as a continuation. The productivity, so we'll be executing productivity in our manufacturing sites, both, I'll call them the day-to-day manufacturing as well as maybe bigger projects that can take a bigger swing in cost structure.

And the last thing I'll comment on is mix. Just the dynamic there is that for the last 2 years, we've had negative, I'll say, a mix or a mix headwind you've talked a little bit about some of the procured chrome resins that we have in our chromatography, a little bit of '24, a little slower growth on proteins, some dynamics. As we look into '26 and beyond, it's not that mix becomes a huge, I'll say, profitability growth driver, but it's not the drag anymore. And so we get that I'll say, still a tailwind overall. So I think those are the buckets that we'll be driving, and we'll be able to update the team as we go through each year.

How could reshoring the reshoring opportunity really impact the timing and degree of reinvestment in '27 and beyond?

Yes. I don't think reshoring will impact that specifically. I mean, again, Jason just said, I mean, we are going to keep on investing in our infrastructure, in our people and so on. So this is going to happen, whatever happened on the onshoring side. or not. I mean, we built a lot of capacity, as you know, doing COVID. So that capacity in principle, enable us to deliver as much as $1.2 billion of sales. So it's not like this onshoring will immediately require to build more space, more capacity, manufacturing capacity. Obviously, we need to bring more labor. But beyond that, nothing in particular. And then we're going to continue that FID 4 growth journey over the next several years.

But as Jason mentioned, we're going to start to really be able to leverage it because I'll give you one example. I mean we built our legal team last year. I mean, we were outsourcing most of our legal services up to the end of last year, and we decided to build our own legal team. So probably for a year almost have a little bit of double spending because you still use the external company and you are building your own team.

From this year onward, we are going to start to switch to using our entire team completely. And then we are using also that AI tool, meaning year after year, somehow we're probably going to need less and less spending on the legal side. So that's a perfect example where you have a peak temporarily and then you're going to slowly but surely going to start to stabilize and probably start to go down after.

Okay. Maybe sticking on the reshoring theme very much in focus for investors here this week. What are Repligen's advantages and disadvantages around competing with larger bioprocessing players to win some of those resin related RFPs? What's Repligen's right to win? And then can you give us an updated view on what you think the potential incremental revenue opportunity looks like for...

Yes. So more than really what is our competitive advantage. What I think is important for people to understand is we have a seat at the table today, which we just didn't have up to probably a year or maybe 1.5 years ago. And in fact, even before those onshoring RFPs are coming to the industry's hands and so on, we received for the first time a lot of different RFPs for what is big hardware ask towards the end of last year because if you think, if you look back, since we had ATF controllers, first, we've added our downstream system, both TFF and ChromeSystem. And then last year, we added mixes as well. So when you -- of breadth of offering, we almost have everything today apart from bioreactors. And what happened as well in the same time is most of these big pharma companies have tried us they've tried to buy 1 system, 1 crop system. Obviously, they know TFF for and then they like it because they like the PAT enablement we're also bringing with our system. So we are getting those asked already. So for us, we are going to enter into that onshoring exercise where we have a chance because we have a seat at the table.

And one of the advantage we have is, obviously, we've got manufacturing capabilities in the U.S. We are probably the only company right now that has got that capability for downstream system. And even though tariff and that what is an acceptable situation, there is still 15% tariff on import from Europe. So I mean when we are going to be competing with the other guys on that side, we will at least have that 15% better pricing because of tariff -- so that's definitely something we're looking forward to.

But overall, very exciting. In terms of sizing, it's difficult to say, KC, I mean we're hearing obviously crazy numbers. I've learned over the years to discount those numbers. So when I love to make a quick calculation, imagine it's only 10% of what has been announced that's going to happen. And imagine that 10%, maybe 10% to 20% of that 10% is typically going to land into buying hardware equipment and so on. That's a huge amount of money. I mean you're talking about billions of U.S. dollars it's not so many companies that are going to be competing to -- so it's going to be a very nice opening for the entire bioprocessing industry for sure.

Maybe touching on new modalities. So your Repligen faced headwinds from a specific gene therapy platform in 2025, and that will continue into 2026. Yet, outside of that specific customer, new modalities overall has been pretty strong for you guys, right? So how do you assess the health of the new modality funnel for 2026? And are there certain areas you're more excited about than others?

Yes. No. So being very specific, you people can make the calculation with the slide we have. Last year, new modality grew high single digit, excluding Sarta. So it's not bad, but it was still dilutive to our overall growth, which at the midpoint of guidance, again, is 15%. So where it was still positive, it was somewhat not as fast as the growth we see on monoclonal last year. So why is that? Well, first of all, are we still bullish about Neal? Absolutely. I mean I'm absolutely convinced, again, this is going to become accretive to growth gain. Is it this year, probably not because obviously, we've got that huge headwind on that gene therapy drug. But I want to say probably from '27 to '28 onwards, it's going to start to be accretive again.

And then you need to be deep dive into the different new modalities because they all have very different pattern lately. And I took the advantage of the break over Christmas to read quite a lot of article. And in fact, the industry is very bullish still on new modalities. But they are more bullish on some new models than some others. And if you think about it, cell therapy seems to be really the one that everybody is very positive about in terms of -- not that far behind and ADC almost the same level. The only one that seems to be a little bit more of a concern at this stage for people with mRNA. We've seen some studies saying people are a little more careful on that side. But most of our big pharma accounts still have a lot of new modality products in their funnel and we know we are the right partner for them. So we are continuing to launch new products. We just launched 3 resin the end of last year, and we're absolutely very optimistic about it.

Yes. Maybe turning to your product portfolio here. Chromatography has shown strong momentum in 2025. I think heading into 2025, a strategic priority was focusing more on big pharma customers, including -- customers to the Opus prepacked columns. And you've called out at least 2 wins in 2025, driving strength in that franchise.

With ongoing commercial efforts focusing on pharma for prepacked columns, can you discuss the drivers behind the shift in customer preference towards those prepacked columns or product solutions, I should say. And really what's driving momentum here into 2026?

Yes. So you're right. We won really 2 big pharma accounts, and that was really a lot of work from our sales organization. Again, the key account management team doing a great job on these because it's not early to convince to convert a big pharma and convince them to switch from packing their own columns to doing it with somebody outside. What's playing definitely in our favorite cases back and I start to be old enough that I remember 30 years ago, when people were entering into a company and starting packing column, they would very often do that their entire carrier.

It's fair to say the new generation lots to do different things, and it's very difficult now to get somebody willing to pack column for more than 2 to 3 years. And it's a real hard to pack a column. So what has happened really more and more is that those pharma company realized they lost a lot of expertise.

And on the other side, they have a provider like us with packing more than 3,000 column every year and is obviously very good at doing that. So slowly, but surely, I think some of these companies realize there is a good reason to go more and outsource more of that. And I think that should be a real tailwind for us in the next few years.

And within Process Analytics, you've recently described the SoloVPE plus upgrade cycle as being in the early innings with only a low single-digit percentage of SoloVPE installed base having been upgraded. What's driving customers to upgrade? Can you lay out the time line for that sales cycle? And do you expect this replacement cycle to be a material revenue tailwind in 2026? Or is this more of a driver in 2017 and beyond?

In our business when you sell hardware, it's absolutely critical to launch a new version of your hardware every, I would say, minimum 5 years, sometimes people do even less than that. because you want beyond the growth of the market, you want to make sure you're generating a few extra point of growth because of a replacement market opportunity. We didn't do a lot of that in the past. And then on the solo solar was a really good example where we had the same product on the market for quite a while. So when we launched it, we said, hey -- well, first of all, we had to bring something different and we did bring a lot of upgrades to the new version, speed 30 seconds instead of 2 minutes accuracy of the protein concentration measurement.

But also people, particularly people who don't know how to spend their budget. So very let's upgrade our equipment and so on. So this is just starting. I mean we have a very significant installed base, which is north of 2,500 just at the beginning, we probably hit the 100 range of replacements. So that should definitely be a nice tailwind for the next several quarters, if not 2 to 3 years for sure.

Got it. That's helpful. Let's talk -- so it seems like 2026 is gearing up to be a big year for ATF, just given you delivered equipment for a blockbuster in 3Q and expect consumables pull-through to really start in the second half of Repligen has continued to win late-stage commercial customers with ATF expected into more than the 50 late-stage and commercial drugs at this point. Beyond the 2 blockbuster drugs, what's Repligen's pipeline visibility for additional consumables opportunities in 2026 and beyond? And how should we think about the number of programs that are currently in late-stage development that could contribute to revenue?

So it's a long question. So I'll try to summarize it. So if you look at what we said during our quarter 3 earnings and so on, the franchise out of the 4, that's not going to be growing at the mid-teen pace is filtration, we said 10%. And then somehow, as you all know, ATF is a significant part of it. It's not the majority, but it's a significant part of it. So just to rephrase a little bit what you said. We had an incredible year for ATF in 2024. So obviously, we grew more than 50% ATF in 2024. So we enter a year with very high comp on the ATF side. So the performance was still positive. We still had growth in 2025, but comp was so high like you probably need to look at the KOL in the last 2 years, which was very, very high and much higher than the overall growth of the company.

But as far as -- and what I want to say, I talked about the breadth of the portfolio we have. I mean, last year was a showcase for us because remember, a lot of people ask us, oh, there is a competitor on ATF, what's going on and so on. we've over delivered every single quarter because there was no competitor. But beyond that and even though filtration was probably the slowest growing franchise we had last year, the 3 other franchise grew extremely fast. So we have a very diversified product portfolio. And last year was a showcase of that.

In terms of the future of ATF, we are absolutely delighted, very optimistic. I mean we've had a lot of great wins in 2025. Yes, I know I talked about that blockbuster. I mean, maybe I should not, but that was my first earnings call as the new CEO. I think what's more important is why in 50 drugs that are late stage or that are really commercial ready, and we see this volume increasing for the next 4 years. beyond that with customers who have been using it for only 1 product who are starting to use it for a second, the entire portfolio of Mabe, but also people are using at the minus 1 level. We are starting to do it at the end level as well. on the scale from 1 to 10, I'm saying we're at anywhere between 2 and 3 right now in terms of the runway we have for ATF. So we at the beginning of the story still.

What opportunities are there to expand the strategic initiative to add additional accounts? Are there any specific franchises that are serving as like a tip of the spear type of initiative for broader account entry. And on some more note, is there anything missing from Repligen's portfolio that customers would ask for that you think you could fill inorganically?

Yes. So I don't think it's so much about adding more key accounts. I mean we were covering 20. I think it's a sweet spot about 16, 17 pharma 3 to 4 CDMOs. The reason why I'm hesitating is we are changing some time. I mean, every year with Greg, who is leading our key account management team who are sitting together and figuring out does this customer deserve a key account or do we bring somebody else into the program because we might see somebody else starting to generate a lot of opportunities. So for me, it's more about making sure we really tackle the 20 we are focused on. And I mentioned the fact we're also selling them 2.5x more products than we were 5 years ago in average. We just need to make sure we are capitalizing on that.

We are delighting them with the best service they can get in the industry, very high level of quality. And again, with the right level of innovation, we need to bring them so that they feel we are the partner of choice for them. If we continue to do that and we've executed on that extremely well over the last 3 years, I think we're going to be up to further successes.

One thing I didn't mention is growth we had with key accounts over the last 2 years have been very accretive to the overall growth we had in the company. So we are delighted, and we are going to keep on pushing that side for sure.

Maybe last minute, just can you just provide an update on the 908 integration and the funnel for 2026.

Yes. No. I mean, everything went pretty much on plan. I mean the first priority for us we had to move manufacturing from 908 in the Boston site to our own site in Marlboro, Massachusetts, which has happened very smoothly. And then secondly, we have merged 2 sales organization, which has happened to work extremely well, and we are really delighted to see the progression we've had on the funnel side and we are very optimistic, again, we said it's a mid- to long-term play. I mean, it's nothing like are to see fantastic stuff in the next 1 or 2 years. But really, we are now having the best PAT technologies that we're going to be able to couple either with our ATF system or anything else in the future, which will be a big differentiator.

Okay. Maybe last 1 quickly, what are you most excited for 2026?

Everything. So many opportunities I'm very excited for sure about the journey.

We'll leave it at that. Thank you, Repligen, for joining us today. Thank you, everybody, for joining us. Have a great rest of the conference.

Great. Awesome. Thank you, everyone, for joining. For those of you who don't know me, I'm Daniel Markowitz. I cover the life science tools and diagnostics at Medtech space here at Evercore ISI. Today we're joined by Repligen. We have with us CFO, Jason Garland; and from Investor Relations, Steven Chehames. So thank you both for joining.

Thanks for having us.

Hi, everyone.

Awesome. So lots to get into here. I would love to just start off on 3Q performance. So I think you guys delivered 18% organic growth, double-digit growth across every franchise. Can you just talk about some of the drivers of this performance? Were there any standout products or customer categories to call out?

Yes. We were really happy with the quarter. Again, just the continued momentum that we've seen through the year. As you said, it was really strength across all the franchises. When we look at our customer segments, whether it's pharma, CDMO, all strong, even saw emerging biotech kind of have so growth for the quarter, which is really the first time we had seen. So looking forward to seeing that trend continue as well. From a franchise standout, really two things I'd share. Proteins did very well. So again, we're coming off, I'll say, a better comp from '24, but we've seen a lot of good growth across the Protein segment and saw that in 3Q. And then the second thing I'd highlight is our Analytics business. So -- and this is -- we've talked about -- if you go back, our analytics business, it has the CTech acquisition we did years ago, and then it now also includes the 908 devices that we add to the portfolio. But for the legacy CTech analytics, we have two products generally, the in-line and then the at-line. So the in-line is for continuous monitoring, our FlowVPX and then the at-line is we've had our SoloVPE, which again, you have to take a sample and then measure outside the flow. That product was several years old, probably even 10 years, and we launched an upgrade in -- early in the year. And so we've seen really good momentum on that upgrade cycle. Good news is that we're in early days on that. We've got an installed base that's probably north of 2,000 units in the field. And year-to-date, we've probably upgraded only 3% of that. So -- but again, saw some good growth in the quarter and through the year as a result of that. And again, excited about how that continues to grow going forward.

Great. You called out emerging biotech, and I think the language around that was highest level in the past three years. Can you just describe what you're seeing in that end market, your outlook? And is this mostly the macro improving, or is this Repligen-specific share gains?

Yes. I mean it's hard to kind of to dissect that entirely. I think it's probably a little bit of both. At the macro level, I think everyone probably sees the same data that we get, but we've started to see funding pick back up, right? So we certainly had that in October in the third quarter, continued at least year-over-year growth in November. So that becomes the earliest indicator for that segment in particular. There's certainly going to be a lag, right, probably 6 to 9 months from when funding starts to pick back up and then when it might actually translate to orders and sales. But yes, I mean, we're optimistic. I mean, honestly, it's a data point of one. So we need to see if there's that continued trend of growth for that space. But we feel like we have a good offering, both the products as well as the scale and size of the products to fit that market and -- as well as just our commercial outreach. So we're excited to see that -- maybe turn around here.

Yes. Let's hope. And then on equipment, been growing pretty meaningfully above peers for several quarters in a row now. Is this entirely driven by ATF? Or is this more broad-based across your equipment portfolio, or anything else to call out in terms of what's driven the delta between you and peers?

Yes. So it's a good question. I'd bucket the biggest part of our hardware sales or equipment sales would be between three pieces. It's the ATF as you mentioned, the hardware controllers that we sell. The second is the analytics piece that I just described. And then the third would be the more traditional downstream filtration systems. So that's kind of the three pieces. I do think that what we're seeing in our downstream filtration side is probably more in line with what the industry and the peers have been talking about, a little softer overall. And then we've been able to more than compensate that with both our ATF strength, as you mentioned, as well as the analytics dynamic on the upgrade cycle that I just talked about. I'll just note one more thing on the ATF. There's a dynamic here where in environments or where there might be uncertainty or questions about, okay, where do we invest capacity that might drag some of that overall equipment spending down, right? And we think that's probably that overall market dynamic. But ATF kind of has its own cycle. In fact, oftentimes investing in ATF will reduce your overall CapEx spend because you can defer or even prevent the need for capacity expansion because you're able to intensify and get more output faster. And so my point is it's just a different economic decision and cycle on the ATF. And we think that, that certainly has been a part of that growth, just again, as well as the adoption and penetration of ATF overall.

Got it. And if I try to parse out the contribution from those two different pieces, the ATF hardware controllers versus analytics, any sense on the size of each of those businesses? I guess within ATF, how much of it is equipment versus consumables?

Can you split that out?

No, we haven't really split that out. I mean, again, the analytics would be the much smaller piece of the three. It's just a smaller ASP for those products. And so really between ATF and the downstream filtration, those would be the biggest parts of the hardware overall.

Got it. Okay. And then if I think about the orders, grew more than 20% year-over-year, and we're up sequentially for the sixth straight quarter. These are all positive trends. How should we be thinking about the relationship between orders and revenues as we move through the fourth quarter and into 2026?

Yes, it's a good question. So first, just note, when we've talked about orders in that 20%, that's on a reported basis. So you've got acquisition orders in there, and you have the benefit of FX. So when you try to compare that 20-ish percent on the orders, versus the organic growth rate on sales, there is that difference. So if you -- we -- and we haven't -- we don't report organic orders, but you get a lot closer to that sales growth rate when you account for those pieces. So that might address just the, "Oh, hey, guys, what you're growing so much at orders, why aren't we seeing that pass through to sales?" There's a little bit of apples and oranges there. Typically, we'll walk into a quarter with probably 2/3 of the sales for that quarter in backlog. So you only then need to capture maybe 1/3 of the remaining piece within the quarter. And so that's why, again, it's those earlier quarters, as you were suggesting that help to drive where does your sales fall through and less about the orders that you get within a given quarter. And most of those orders you get about 1/3 will translate to sales in -- well, in the same quarter, 1/3 in the following quarter. And then the last 1/3 will be somewhere between the quarter after that and maybe you might have some things that play out a little bit longer. So that's why we're actually trying to move away, as you may have heard to on the call, away from disclosing orders growth rate and really just remain focused on sales, and how that's playing out. And certainly, we'll be transparent about trends we see and anything major or material to share as it relates to that trending, but we want to get more focus on the sales line.

Right. Got it. That makes sense.

Public service announcement there.

Definitely. That makes sense. So if I look at your 4Q outlook, I think it implies low double-digit organic when you strip out the headwinds from a gene therapy customer. Can you kind of walk through the assumptions there? So looking at low doubles organic, and that's versus I see 18% organic in 3Q. So I guess, is there conservatism? Or I guess what accounts for kind of the step down?

Yes. I mean, so -- and you say stripping out the -- because certainly, the gene therapy is a piece of that difference. I think the other thing, too, is, frankly, there's just a different comp sort of dynamic fourth quarter versus prior year fourth quarter versus third. And then again, we also talked about just some of the timing of sales that hit in the third quarter. Particularly, we talked about the ATF -- a fairly large ATF hardware delivery, where going into 3Q, we weren't sure if it would ship at the end of September or early October, and it played out to be able to get that to our customer, and they wanting that in the end of 3Q. So some of that's just a little bit of timing, too, across the quarter points. So nothing more to really highlight other than comps and a little bit of timing.

Got it. Okay. Great. And then zooming out to like the longer-term framework, the framework is to grow -- outgrow the market by about 500 basis points. I guess what do you see as the main drivers of that?

Yes. So I mean, it starts with the strong, I'll say, technology and differentiation that we bring, right? So it starts there. Second, I think the thing to keep in mind, to outgrow a market, just I'd say mathematically, there's kind of 2 pieces to it. There's the -- are you taking share, right, from others in there, and that's the way to grow above market. And then the second piece, which is really more of the dynamic for us is we've been creating markets, right? So if you look at the lion's share of our portfolio, ATF, right? There really isn't anyone else selling that. And so every dollar, every point of growth is a growth in the market -- in that market, right, which is, again, by definition, outpacing the rest of the market that it's not a part of. And so ATF is that way, Analytics is that way. I could argue even the prepacked columns doesn't really have a direct competition in what we offer. And so any time that we're getting growth in those areas where we've created the market, that helps us to be accretive to an overall market growth rate. The other piece is our commercial clinical mix is a driver of our ability to kind of outpace market. Certainly, there's an element of where we are in our kind of trajectory as a company. We like to say we're only 10 years young, right? So there's that dynamic of when -- as we started, we've been able to capture and grow as programs go through the clinical phases. And so that allows for a steeper growth rate. Now as you get bigger and bigger, those are smaller numbers, smaller programs. And so the math doesn't help you. But for where we are now and over the next few years, that movement from clinical to commercial and as you make the steps up through the stages is definitely another way that we're able to grow above the market. And then new modalities as well. I know this year, of course, it's a different dynamic, particularly with that one gene therapy program. But we do see in the mid- to long-term that new modality will continue to be a strong growth driver for us, and we are more heavily indexed to that. We're still about 80-plus percent mAbs, but we're with 20-ish or a little less than 20%, that again helps us with our mix of business for growth. And then the last piece I'd say is the commercial side of our execution. We feel like the key account strategy that we've been executing has provided a lot more, I'll say, looks at RFPs, looks at opportunities and this idea of being able to bring a more fulsome portfolio offering to customers. And we've been able to capture some share and get some looks that way. And then the last piece within commercial and overall would be Asia as a region, we feel like we're under-indexed there as well. And so meaning our Asia sales as a percent of our total sales is lower than a lot of the others in the industry. And we feel like that, that's an opportunity for growth for us as well that helps. So kind of put all those pieces together, and that's kind of the algorithm that we're running to grow above market.

Yes. That's a solid amount of drivers. So I think there's been some market noise that maybe new modalities, if that's not going to be quite as strong of an outlook after this customer situation, is the 5% above market growth still intact? It sounds like I'm hearing your message is, yes, still very much intact.

Yes. And I'd just tack on one other piece. I think one other important message that I want everyone to really absorb is we are -- have a much more diverse and broad portfolio than we did 5, 10 years ago. And so again, even just go back to that gene therapy, when we took that out of our outlook, we were able to replace it and in fact, still raise guidance slightly, even absorbing that pressure point, again, meaning that we've got diversity of our products. We've got diversity of customers. We've got diversity of programs within the customers. And so if one thing isn't growing as fast as we might want it to or for a given year, we've got a lot of other ways to get there.

Definitely. Great. With that, the new modalities, it is a relatively distinct growth pillar. What's the rough split of that business between -- when I look at AAV versus mRNA versus cell therapy?

Yes. So we typically run this, call it, once a year, but a directional split, call it, in the mid-50s, we're exposed to gene therapy. This is all as a percent of kind of the new modalities. mRNA is kind of north of, call it, 25% or so, and then the remaining is going to be cell therapy and other. The good thing is we've seen a lot of traction on the cell therapy side. So we're pretty optimistic for that modality, especially with ATF.

Great. If I could just ask one on cell therapy. Is it mostly different programs progressing through the clinic, or is there a commercial ramp? I guess what's driving the strength in cell therapy?

Yes. So ATF, we called out in Q4 of last year, ATF got spec-ed into a cell therapy platform or program. And in the event that, that does become commercial, it certainly can be a pretty meaningful driver for us.

And now it's less on the commercial side.

Correct.

Got it. Got it. Okay. And I guess, broadly within new modalities, how would you describe the demand environment? You mentioned cell therapy is driving good strength. But I guess across mRNA, AAV, what's the general demand environment like?

I mean outside of that one gene therapy program, we haven't seen a lot of change in opportunity or activity. So again, we kind of still see strength across those pieces. Again, we're pretty excited about cell therapy, like you said, but everything really is kind of stable in terms of that overall activity and opportunity base.

Got it. And then on the mRNA side, is there a lot of customer concentration here? Because if I just think about the mRNA therapies that I know of that would be lumpy, it comes down to not too many.

Yes, you're right. I mean that's one area that we've probably got more customer concentration, but still, again, a lot of activity and a lot of opportunity to grow with them.

Got it. And is that mostly clinical or on the commercial side?

I don't know if they split that. [indiscernible] split that one.

Okay. No worries. Next on the AAV customer headwinds, can you just -- for those in the audience, can you just remind us an overview of the disruption to the business and the kind of a quantification of it?

Yes. So we had called out that there had been about $10 million of sales in the first half. We had done $3 billion in July when we had kind of shared this overall dynamic later that month. And then -- and talked about the second half really having de minimis sales. So there have been some things that we had already agreed to ship, and so it still went out. So overall, a pretty meaningful drag. And as we talked about a little bit for -- or it's been out there a little bit that this will remain a headwind for next year as well in 2026 of about 2 points of growth. So I know there's also been a lot of questions or references to us about, hey, that therapy is still ongoing, right? There's still patients, and we recognize that. Our view is that there's probably enough inventory in the system that if things continued, we still wouldn't expect any incremental orders or sales next year. But certainly, if it steady states with that sort of still usage, we might see some in the future. But right now, we're really being, I guess, clean about taking it out. And then if there's anything that comes through, it's upside.

Yes. I think that's the right thing to do. That makes total sense. And I think you already touched on this, but the AAV disruption with that customer, has it bled into any other AAV customer activity or any broader disruption?

No.

Got it. Is that something you're monitoring closely? Or would you have expected to have seen it if there were an impact by now? I guess, how are you thinking about the risk that there could be some change down the road?

Again, we monitor it closely like with any activity. Again, we -- when we provide our guidance, we're balanced on the risks and opportunities that sit within the broader portfolio. I think this one, in particular, had some specific things that certainly, I'm not the expert to talk about, but that I think are outside of the broader sort of application in market. So that's why, again, we still haven't seen much erosion in activity beyond that one.

Great. Great. And then if I think about back to 2026 long-term algorithm, on 2026 framework, I think peers are generally pointing to about high single-digit growth. And if you grow 5 points above that and then take down a 200 basis point headwind from Sarepta, is about 11% to 12% kind of a reasonable starting point for investors to anchor to?

So that's the math that the framework would suggest. I've said it all morning, and we haven't given guidance yet. And -- but that we continue to look at '26 with that lens, right, that we can grow above market on average 500 basis points. We went through a lot of those reasons and growth drivers we have. You backed out the gene therapy impact. And then it's that baseline to your point of, well, what's market. I think, yes, the -- over the last couple of months, we've heard some more positioning around that high single digit, right? That's probably a little different back in the summer. And so that's what we walk into. But what I'll tell you then is, again, when we give guidance in February, it's going to be, here's our view, Repligen's view of our sales and our view for 2026. And it becomes less about, "Oh, I have to start with this variable market." It's here's what we see line of sight to, right? And that's what we'll share.

Got it.

No change in framework and guidance to come.

Yes. And then are there any level -- like high-level headwinds, tailwinds to call out by franchise? Any specific segments you'd expect to be above or below corporate average?

No. I -- again, we'll share some more views of that in February. But at this point in time, we would see that all the franchises are kind of plus or minus around that overall sort of average company growth. So there's certainly some that will look to help us to be growth accretive, but the ones that are on the other side of that aren't far off. So they're all kind of close to that median.

Great. And then if I think longer term, can you talk a little bit about the onshoring opportunity?

Yes. So I know a lot of dialogue about this, and how big the size of the prize is, I think, still remains to be seen. For us, I think we're excited about the opportunity in a couple of different ways. Number one, you got to remember, when a lot of capacity was built the last time or last gen, we just didn't have the portfolio and the presence and the credibility in the industry that we do today. So we're confident that now when new capacity considerations are -- come to play that we'll have a chance to bid, right? And that we'll have a chance to bid participate in those RFPs and demonstrate the value that we can bring. Because we do believe that our products really almost across the board, but holistically help to create efficiencies, help to improve yield, right, ultimately help to reduce costs. And so we do believe that, that will be a lens that anyone is thinking about new CapEx spend or capacity increase will bring, that's one. Two, from a -- the concept of, "Hey, if we're going to onshore in the U.S., the company should strive to include U.S. content." I think we benefit from the fact that 90% of what we sell within the U.S. is made in the U.S. or as a very specific exemption. So again, we feel like we'll be able to fit that as well. So again, I think the quantification of how all this plays out remains to be seen. I think there's always going to be this question of, is it really incremental capacity in the system, or is it just, "Hey, we were going to put it somewhere else, or we're going to put it in the U.S., or we hadn't decided where we were going to put it, but we're going to put it in the U.S." And so -- but we're excited that we're going to be able to participate in a much different way than we did in the past.

Right, right. That was my follow-up. Is the benefit really just a onetime instrument placement, or do you think there could be more to gain from an onshoring opportunity?

I mean we had this discussion this morning, too, with some -- I think we still hold to the view that ultimately, the usage of consumables is going to be driven by the ultimate demand for the drug, right, and the therapies that they're using. So -- and you're back to, okay, if now you have two factories producing that same amount, it's not like you double the consumable use, right? They're going to share that. So I think there is this to your question, the onetime gain or the incremental hardware that comes with it. And I just think the people have to be careful about how they think about the consumables modeling on the other end of that and not get ahead of the overall drug demand.

Right, right. And if I just think about the time line, when and how would you expect this to show up in Repligen results? When would you see orders? When would you see revenues? What's the time line breaking ground? Like what's the time line on all this?

I mean well, first, it depends, are they greenfields, or are they brownfield or expansions, right? Greenfield could be years out. More of the brownfield or expansion opportunities, we might start to see some RFPs in '26, maybe those translate to orders either in the year '27. So I think it plays out over the next couple of years. No real sales to speak of in '26.

Got it. Okay. And then one more on the longer term. The margin target you guys put out for about 30% EBITDA margins by 2030. That implies over 200 basis points a year of margin expansion. What are the drivers that you see on how we get there?

Yes. So I think, hopefully, you'll feel like just like the growth drivers on the top line that we've got several different things that we're running towards. I mean, number one, if you kind of split that between gross margin and the OpEx dynamic, we -- it's probably about 1 point plus that we get kind of each year on the gross margin line. And then the rest of it is going to be driven by getting leverage on OpEx, meaning growing OpEx at a rate lower than the top line. The way we're thinking about this from a trajectory is that probably over the next couple of years, we -- the difference between OpEx and top line growth is probably less. And then as we get out beyond year 3 or 4, 4 or 5, that we start to be able to scale at a different way and get a little bit more leverage. So kind of -- I can't see it on the transcript, but kind of this flatter over the next couple of years and then more steep incline towards that 2030 target. So then you peel back the pieces beyond the OpEx, it's the growth drivers at the gross margin level. Certainly, there's a volume element as we build scale. We still see a path to getting low single-digit price each year. And then at the same time, we'll always be paying our employees a bit more and have some inflation that we have to offset. And then the other big driver then will be generating manufacturing productivity, right? And I would just kind of parse that into two pieces. There's the day-to-day, we call them our RPS projects that we're generating productivity in the factories every day. And then there may be other bigger initiatives, whether it might be site optimization or other, I'll say, more meaningful either product changes or others that can help to then close -- bring more productivity as well. So it's going to be both of those pieces. But I think that the team has been continuing to focus here, and we're building a lot of good muscles on driving that expansion.

Great. And I guess where does capacity utilization stand today? I know there's been some rightsizing over the last few years. But I guess, as a percent of total capacity, what's being utilized? And what was normal if I think back a few years ago?

We still feel like we could probably double the size of the business without really any major, I'll say, four-wall expansion. Certainly, as we continue to grow, there'll be equipment additions for CapEx. As you know, in our industry, clean room space is an important part of the production areas. And so there may be additional clean rooms that need to be built out. But we still feel like we've got a lot of good room. To your point, as we optimize sites, that may change some of that algorithm, but we feel like we've got a lot of good room where it's not, I'll say, really meaningful expansion of four walls over the next 4 to 5 years.

Got it. Yes. I'm just flipping through my model. It looks like 2019 to 2022, incremental gross margins were like right around 60%. So is it fair -- I'm just backing into what gets you to that about 100 basis points plus of margin expansion. It seems like low 60s incremental gross margins. Does that seem like looking back at what it used to be, we should be right around there, maybe a little higher?

Yes. I haven't calculated it that way. I think we've got -- it should be close. I mean, again, we still have -- in addition to the depreciation and the occupancy costs, there's other, I call them like semi-fixed or semi-variable costs that don't necessarily scale at that same level. So -- but in the end, that's probably pretty close.

Great. Next, I wanted to turn over to ATF. I think that's a really attractive part of the story. It's been a really, really good business for you guys. So you called out as a driver of equipment strength. I guess I already asked -- you can only say the exposure to equipment versus consumables. But I guess in terms of how much that mix could shift, is that going to be a material driver of shifting? I assume now it's more so hardware than it's going to settle out in the longer term.

So interesting enough, Q2 of last year was the first time we actually saw consumables outpace capital equipment for ATF. And I think that's just a testament to the actual pull-through that we're starting to see with the installed base that we've had over the last, call it, since we acquired the actual product in 2014.

And when you say outpace, does that mean it was more than half of the mix or the growth rate was higher within consumables?

We didn't break it out, but the dollar value was higher of the consumables and capital equipment.

Got it. Got it. Okay. And with time, is it going to settle out somewhere near where the rest of the portfolio is, where it's like 80-20 type mix?

Yes, I think that's fair. So just the split of the overall revenue from a company perspective is, call it, 70% consumables, 25% capital equipment and then 5% service.

Right. Great. That's super helpful. Okay. And then you've highlighted a long runway for ATF with more than 50 late-stage and commercial programs and mentioned there was another blockbuster placement since 2024. This is obviously a big growth driver in 2024 with over 50% growth. Are there any comments on the growth outlook for 2025 and beyond? Should it remain above corporate average for the foreseeable future?

Yes. So we don't break out specific guidance by product. But just to go back to the 2024 comment. So in 2024, ATF in general grew, call it, 50%. That blockbuster that ATF got spec-ed into in Q3 of last year did not contribute to the growth. So that capital equipment was actually delivered and realized as revenue in Q3 of this year. And so we'll expect consumables pull-through for that program, call it, in the back half of 2026.

Got it. So 3Q this year, the one between September, October, that's the one that was from last year. And then you said consumables probably not until back half of '26?

Correct. So the growth that we saw in ATF in 2024 was primarily driven by the 9 late-stage and commercial processes that got backed into in 2023.

Got it. And I guess, what's the scale of those 9 late-stage ones versus this big blockbuster?

Yes. So we haven't broken it out like that, but just to phrase kind of the opportunity for ATF. And this is for N-1 applications. The economics get a little bit different if you're talking about a perfusion process. But for just a regularly commercially approved drug that ATF gets spec-ed into, the consumables pull-through is probably in that low to mid-7 figures on an annual basis at peak volumes. And then if it's a blockbuster drug similar to the one that we called out in Q3 of last year, the consumables pull-through on an annual basis, again, at peak volumes, assuming ATF is implemented across all their manufacturing sites for that drug could be in the $15 million plus.

Okay. Great. And on the point on the N-1 versus perfusion, I think there's been some sort of investor eyebrows raised because I think we've been told by the bioprocess industry for so many years that there's this dynamic where you get specified in, and then it's hard to break from there. I think it's -- what explains is how you've been able to win that is that it's N-1 applications mostly. I guess, can you talk about the difference between N-1 versus perfusion, and how much of the business is one versus the other in ATF?

Sure. So when we acquired ATF in 2014, it was primarily used at the end stage. What we've noticed is over the years, there's more opportunities in the N-1. I mean 70% of the workflows are done in fed batch and then the remaining being done in perfusion processes. When you're using ATF in the N-1 stage, you're attaching it to the actual seed train bioreactor. And so you're not really changing the process. You're essentially adding a loop to the process. And so if you're not using ATF in the N-1 stage, you might be running your process for, call it, 14 days to get the number of cells that you need for the main bioreactor. By attaching ATF, you're essentially speeding that process up. So instead of running the process for 14 days, you implement ATF at the seed train bioreactor, and you're running your process for, call it, 5 to 6 days, getting to the same cell count that you need in half the time. If you're using ATF in a perfusion process where you're attaching it to the main bioreactor level, it's not necessarily about speed. It's more or less about increasing the actual cell count. So say your original process, and these are hypothetical numbers, say your original process calls for 100,000 cells. Well, if you implement ATF, you can scale that two- to threefold. So you can end up with 200,000 to 300,000 cells in the main bioreactor. The problem is your original process for your downstream was accommodating 100,000 cells at the main bioreactor. So you essentially have to change your entire downstream process if you implement ATF at the main bioreactor because you have 2 to 3x the cell count that you originally had.

Downstream becomes the bottleneck, whereas upstream traditionally.

Right. So there's less of a regulatory hurdle for customers if they're doing it at the N-1 level.

Yes, there's still a process they have to go through. So I think this particular blockbuster drug we got spec-ed into, the customer went through, call it, 8 to 12 months of filings versus starting back at the clinic and having to scale up. And then the reason I said that the economics are a little bit different is if you're using ATF in the N-1, you're probably attaching 2 to 3 single-use ATFs to that seed train. If you're using it in the end stage, you could be attaching as many as 7 to 8 single-use ATF.

Got it. Okay. So is it fair to assume that any already commercial drugs that you win are in the N-1 stage and then perfusion would be only the new things coming to market?

So we do have a couple of customers using ATF at the end stage, but there's more opportunities, and it's more skewed towards N-1 today.

Got it. Great. Next, are you seeing growth in this number of late-stage and commercial programs, mostly from progression through the clinic? Or is it also share gains in the -- I guess, what's the contribution from already commercial versus progressing through the clinic?

For ATF specifically?

Yes, yes.

So we haven't broken that out, but you could assume it's more commercial based.

Okay.

And as we mentioned, ATF is in, call it, north of 50 late-stage and commercial processes today.

Got it. Is there concentration within customers who might roll out ATF in one program and say, this thing is great, let me roll it out in more programs, or is this more broad-based across different customers?

Yes. So we're in, what, 9 out of the top 10 CDMOs. But in most of those cases, they're only -- it's only with one program, right? So there's an opportunity to add programs or the real like -- the real opportunity is you get platform so that whenever you've got a bioprocessing or a reactor for a certain either molecule or process that you're always have ATF spec-ed in. And then on the pharma side, we've been making good inroads there as well, not quite as heavily penetrated, but we've also been fortunate as well to see at times some of the CDMOs have been, I'll say, requesting ATF in order for them to take the production from pharma is to say, "Hey, we'll do this if you allow us to do ATF." So you kind of get some of that support from -- as well, not only us pushing the technology, but CDMOs saying, "Hey, this is how we want to develop it because it's the most efficient for us."

Right. Yes, that was my next question. If you're in 9 of the top 10 CDMOs, I guess the question was how much control do they have over what the workflow looks like versus just being told by the pharma company, here's what I want to...

We're seeing real examples where they're again insisting that for them to take the molecule that they want to -- they need to implement ATF.

Is that because the economics can be better for them?

Absolutely. Well, for everybody, right? It would be better for them, and then that will pass on to pharma.

Yes. No, I mean it sounds very compelling value proposition for everyone. So beyond the programs, I guess, how broad is adoption generally in ATF? How much of a standard is it? And I guess, how penetrated do you think it is in the market today? Is it still less than 10%? How much is the opportunity ahead?

Yes. So from a penetration standpoint, it's hard for us to kind of give you an exact number, but we do think that we are in the early innings, if you will, of ATF. As Jason mentioned, 9 of the top 10 CDMOs are using it in at least one program. We're working on that 10th. The vast majority of large pharma are implementing ATF as well. But if you think about the kind of breakdown, it skews more towards mAbs, but we are seeing adoption of the new modalities. And I think we touched on the cell therapy win that ATF had in Q4 as well.

Great. And with any strong growth driver where there's a nice competitive difference, you get the question on competition. I guess, how would you describe the competitive environment for ATF? It seems like it's kind of in a category of its own today. Is there anything you're monitoring on the horizon in terms of potential competitive entrants here?

So if you think about process intensification, there's two technologies, ATF, which we are the sole provider. And you can also use a TFF process as well. The great news is that we offer that solution too. And so that if you have a producer that says, you know what, we're all in on TFF, then we can provide that as well. And we've had success with being able to sell those solutions. TFF is where there has been discussion of other players coming to market with their version of it that could be used in intensification. So we haven't seen a lot of it yet. We still feel like ATF is the superior technology and that we can continue to lead in that way.

Great. And so we got the high-level framework on '26, which was helpful as an early starting point. Are there any things we should keep in mind on -- in terms of the margins, anything on the OpEx line or gross margins that kind of onetime headwinds, tailwinds we should think about entering '26?

Yes, I think we still see a framework where we can grow gross margins kind of up 1 point plus and then get more leverage at the -- on top of that by growing OpEx less than our top line. I just think that, again, I talked about the trajectory over the next couple of years that there are more fit-for-growth investments that are important for us to make over the next couple of years because, again, the -- and you talked about capacity, physical manufacturing capacity. We also just have the capacity of all of our business processes that we have to, I'll say, strengthen and expand and through whether that's the teams we have, whether that's the processes we use, the systems or technologies we have. And so that's where we're really focused on ensuring that we have robust processes in order to be able to scale and to scale with the increased complexity, right? When we -- the great news about broad and diverse portfolios is we can cover ebbs and flows, but it does add more complexity, and we have to have the right ways to manage that to protect that growth.

Got it. Makes total sense. So I see we have 30 seconds left. In the last 30 seconds, on capital allocation, how are you thinking about capital deployment here between M&A, internal investments, potentially returning capital to shareholders? How are you thinking about those different?

Yes. Our priorities will be the internal investments we've talked about, but -- and then M&A becomes a continued priority for us. We've talked about where would we fill out the portfolio in terms of gaps. So in the traditional mAbs workflow, there's three areas that we don't provide right now, bioreactors, cell culture media and viral filtration. And so we remain open to those opportunities. And then in addition, on the new modality space, and we talked about the way we think about growth there that are there -- that's a different set of workflows and different solutions. So we're also very open to seeing what's available and can fit with the portfolio on that side as well.

Great. With that, I think we're out of time. Thank you both for joining.

Thanks for your time. Thanks, everyone.

All right. Good afternoon, everybody. I am Doug Schenkel with Wolfe Research. It's my pleasure to welcome Jason Garland, Chief Financial Officer of Repligen; as well as Steven Chehames from Investor Relations. Thanks to you both for being here.

Thank you.

So Repligen is, as everybody in the room knows, but just in case, Repligen is really one of the only publicly traded pure-play bioprocessing companies available to invest in. And the company not only stands out for that reason, but there's just a tremendous history of innovation, tuck-in acquisitions that feed into that innovation, which together has fed consistent above market growth, so we appreciate you both being here.

In terms of the agenda, I thought we would spend a couple of minutes just recapping some loose ends from Q3. It feels like that was a while ago now, but it wasn't -- I guess it wasn't that long. But -- so maybe a few things to talk about just in terms of -- I think things that might be helpful to double-click on as we think about momentum into next year.

With that in mind, then I actually want to talk about the framework for next year, which I think has got a lot of focus coming off of the Q3 call, which I bet you guys have heard here and now. And then I want to get into some longer-term growth drivers, so that obviously includes ATF, but we'll go beyond that as well.

Great. Excellent.

So Q3 revenue was -- you beat The Street by about $7 million. There was strength in analytics and proteins. Very quickly, how much of that was fundamentally just better than expected versus timing dynamics?

Yes. No, so first, you're right, it was a great quarter. We were up 18% organic. And underlying that, though, was really strength across the portfolio. So to your point, there's a couple of standouts I can talk about, but we saw strength across the franchises, across the regions, across our customer base.

So really happy with the results. I think to your point, some of the beat on expectations were really driven by those 2 that you highlighted, the proteins business as well as analytics. I think with proteins, just think of it that can be lumpy, right? You can have just deliveries that hit all at once, that was primarily the driver there. So a little push and take within the year, but overall kind of a lumpy delivery that happened.

Analytics, I think what we've seen is now a real strong momentum within our CTech piece. So again, if you remember as well, our 908 acquisition, the assets we bought from them are in that bucket as well. But the real strength was this momentum we're seeing on an upgrade cycle that we've started.

So as a quick refresher: In our CTech analytics, this is our PAT technology, we do measurements in line, which we often connect to our filtration systems, downstream filtration systems. And then we have an at-line product, so you have to take a sample and measure. That product was, call it, 10-years-old-plus. And so we launched a new version. Think of it as the next version, more features, functionalities earlier in the year.

And so we've been pushing that upgrade cycle and it caught quite a bit of positive momentum in the quarter, a little bit maybe higher than we had expected. Great news is we're in early innings, right? I mean we've got more than 2,000 units installed base. I think our calc is maybe we've covered 3% of the upgrades sort of to date. And so a lot of good runway on that as well.

So I think to answer your question, some positive momentum there, a little bit timing more on the proteins piece and just again, the lumpiness that you can have across really the franchise, but really happy with the third quarter.

Equipment, which is about 20% of sales. I mean, we cover, I think, the full spectrum of bioprocessing companies. You're seeing strong consumable growth across the category. You're not seeing it almost anywhere on the equipment side. So to say you guys are outperforming the peer group with a quarter where I think you were up 20% on the equipment side is probably the understatement of the day. What's going on there? Like is it mostly ATF or is it broader than that?

So it's broader than that. And so again, if you think about our hardware, the equipment side, there's the downstream filtration systems. And I think we would say that though we've seen some positive momentum that it's still not back to where we'd hope or expect it to be. So maybe more consistent with the overall messaging you're hearing.

What has really then helped pick up that whole group for us is ATF and then the analytics. So I mean, to close out the analytics, the same thing we just talked about, all of the momentum on the upgrade cycle, that would fall into our hardware bucket as well. Obviously, it's at a lower price point than many of the other equipment pieces, but still a positive lift.

And then in addition to that, ATF. So when we sell ATF, there's certainly the single-use filtration cartridges, if you will, in those elements, but we also sell controllers with it. And so the controllers would be grouped within our hardware. And I think our view is that it's outside the economic cycle that some of the other hardware would be, right?

If companies are thinking or pharma or CDMO are thinking about capacity expansions or those type of investments with some of the, hey, what's going on in the industry sort of question marks, you can dial that down, right? You might wait.

But ATF, it's outside of that economic cycle. I mean -- and in fact, it actually supports that because in many cases, the decisions customers are making is I can invest in ATF and prevent the need to build a new line, right, or delay that need for a new line. And so -- and again -- and even if it's just a, I'll say, not a capacity decision, but just a yield or a faster output, again, that's an economic decision that is contained within that ATF purchase and not the broader. So I think that's why we've seen some sort of outpacing of overall hardware, kind of those 2 dynamics.

I'm going to ask a somewhat related follow-up. So you've done better in equipment hardware for the reasons you discussed. What we've seen more broadly is there's just been a lot of, we'll just call it, policy uncertainty, as we all know about, that's led to basically a freezing up of a lot of customer activity on the equipment side. As we hopefully move past that with the new MFN agreements and then really kind of to the crux of the question as we think about the possibility of reshoring leading to orders, again, correct me if I'm wrong, but maybe in '26 with revenue in '27 seems like the right way to think about it based on what we know now. You still get to participate in that even though you've been more resilient in a tough period...

Absolutely. Absolutely. I think a couple of dynamics. I mean, our downstream filtration systems are still in a place where we can take share, right, through the innovation we have, the differentiation, even connecting it to analytics. We now couple our in-line PAT technology within those systems as well. So we -- at least 1 in 4 get that as a part of that system. So there's a real differentiation there.

So we've got just the underlying strength and momentum on that product set. But then beyond that, I think to your point, in the grand scheme of things, we haven't been around that long, right, as the company and the product portfolio that we have today. So when many of these originator drugs came out, we weren't there, right? So now...

Weren't in the game.

We weren't in the game. So now flash forward to where we are today, if you've got now new capacity being built through onshoring or other, you've got biosimilars, you've got next-gen originating drugs that are being developed, we now have a seat at the table. And again, that timing, coupled with what the team has done on our key account strategy that we've talked about, just being able to have more robust partnerships with key pharma, key CDMOs, bringing a larger portfolio.

And now as -- again, to link it to the onshoring, now as those RFPs or discussions come up, we believe that we'll have a rightful place at the table to be able to compete, right, and through the RFP process and through that sort of next-gen process. And so we do think it will be a tailwind for us. We also believe another, I'll say, advantage we bring is that we can deliver almost all of our portfolio from U.S. production sites as well. So of course, that couples well with the concept of the onshoring. So we believe we're well positioned to participate in a strong way.

And maybe to state the obvious, but to the extent that reshoring is really reshoring where you're actually moving production that would have been done in a less expensive environment than the United States, some of the efficiencies you bring to the table are essentially very important to what you described in terms of gaining share opportunities.

Absolutely. I mean that's the commonality, I think, across our portfolio is the idea of providing efficiencies, either it's fast or higher yields or other cost savings measures, again, helps the onshoring to be more competitive. Absolutely.

All right. As long as I'm veering into policy dynamics, why do we close that out. So on, I guess, between MFN and reshoring and I would think the MFN agreements would lead to a more near-term change in behavior. Onshoring is going to take a little bit longer. One, do you agree? And then two, are you seeing a little bit of a change in tone of discussions with customers, as we've got a little bit more certainty out of Washington?

So I think you're right. We'll see some more of the onshoring opportunities probably a little later. I mean you said it earlier, and I'll just kind of confirm that we might expect some 2026 orders and then sales coming later. I think if in '27, if they're greenfield types of expansions, you might see some of that push out.

I think to your point, MFN could happen a little quicker. Again, it's the same thing we just discussed that our products in general will help bring cost reductions and more efficiencies. And that's why, again, we think that we'll have the chance to compete and offer our value proposition, and that's really across the portfolio.

And I think, again, that's what's much different today again versus the past, as we bring a much broader portfolio and can fill more of the workflow. And again, in a way where it's more valuable when you think about an MFN project or an onshoring that we can offer a bigger selection, they're going to want to spend time with us, right? They're just, "Oh, no, hey, we'll get to you later when we want to talk about ATF," right, that's a different discussion that brings us earlier to the table now.

It does seem like there's a little more momentum behind biosimilar initiatives in the U.S. That's a -- I think this is a quick answer, but that's a good guide for you guys for all the reasons we've talked about, correct?

Exactly. All the reasons. We went around when the originator maybe came out, and now we're here. And then the other thing I'd add though is, we also believe it might give us another swing on the originator next-gen because now they need to compete at a lower cost base with the biosimilar. So that's the other place where we feel like we could add value is helping the originator to be more efficient or cost efficient.

A lot of investors are speculating that the MFN agreements specific to Lilly and Novo are going to lead to lower pricing on GLP-1s and then higher volumes. I don't think you participate directly there. But to the extent that, that logic applies on the biologics side where maybe you get better pricing and that could lead to some pickup in volume, is that a potential good guide moving forward?

Yes. Absolutely. Absolutely. I think it's just the broader biosimilar that same concept, right, lower cost, higher volume. We do have some GLP-1, and we continue to determine are there ways that we can expand our exposure in there. But -- so we haven't lost sight of that as well.

Okay. Jumping back to the quarter, emerging biotech, it's only around 10% of revenue. But I think revenue was the highest in 3 years in the quarter. We've been waiting for some signs of life on the emerging side. How important was that?

Well, so we're encouraged to see it as well. I guess I'll -- it's a data point of one, right? So we'll see how the trend continues. I think coupled with just the performance in the quarter, we saw funding up significantly in September and I think we've seen it again, another big step up in October. So I think those as well or those dynamics on funding helped this.

Now again, you're probably talking 6 to 9 months before that funding might translate to different orders that we'd see. But those couple of data points are absolutely encouraging for us. Again, it's 10% of the business, maybe a little bit more if you pull through some kind of Tier 2 CDMO work that might be in that. But again, it's just painting a more holistic sort of positive view of the portfolio. Because I would have said that kind of coming into the quarter, really the only 2 soft spots we've continued to see was emerging in China, right? And so again, it's an overall sort of good indicator for the industry.

All right. Let's talk a little bit about 2026. We've kind of gone there to some extent already, but let's talk specifically about guidance.

I haven't given it yet.

There. You want to do it now? No?

No.

Okay. I will say, I mean, it's obviously been a tough time for the group. I think a lot of us thought '25 was going to be a good year for the group as we move past some of the post-COVID era challenges. And I think that held up for about 2 weeks and then we got to February, where we heard a lot about the [indiscernible] dynamics. Then we got to Q3 earnings, and it was one company put out guidance and then it was kind of like, "Hey, hold my beer, I can go lower."

And again, you guys didn't formally guide, but you talked about, listen, if the market is growing, the peer group is growing and correct me if I'm missing this up, but same goals? You guys expect to grow 5 more than that than the market and then you got a 2-point headwind due to 1 major customer, that takes you -- my math, not yours, I guess, technically 11 to 13. And I think that was a little bit below what I think some folks were looking for. It was -- maybe to use my clumsy way of putting it, but was this a little bit more of a hold-my-beer moment for Repligen than you intended?

Look, I think, again, I said we didn't give guidance because we've shared a framework, right? And you said it well, right, it's, hey, we, on average, have been able to grow 5 points above the market, expected to be able to do that in '26. And then to your point, 2 points of headwind from a specific customer to plus 3.

I think what -- if you'd gone back to maybe the summer when we had shared some of this initial framework, I think the overall view of the market may have been more aligned with that 8 to 12 range, call it, 10 in the middle, right? Then I think to your point, third quarter came around, and we saw some other big players in the industry indicate more high single digits. And so again, that was just a starting point change for us.

Here's a reality: When February comes and we do issue guidance, it will be on what we see, right? We'll have 2 to 3 more months of visibility from where we are today. We'll have better visibility for the year, and we'll share what our guidance is kind of agnostic to the market, right? Of course, still within our framework overall, but that's what we'll share. And what today is we're just kind of bouncing off of a baseline that we haven't necessarily changed with just the overall tone of the discussion.

No, it makes a lot of sense. It's just if I think about what we just described and then think about where we spent the first 10, 15 minutes of this, there's a lot of good going on right now, especially, even relative to the peer group.

No, fair. But again, if the overall industry does start to -- or doesn't go as high, then we're not immune to what the overall market is seeing, right? And we will still directionally be pushed one way or the other. And I say that's all we're acknowledging. And then we have our strategy and road map that allows us to beat that, and we'll execute it. And we'll be able to share more in February on how that kind of looks to what the rest of the industry is calling for '26.

That's helpful, and thanks for indulging in that. On the margin side, I thought all of this was helpful, but I think the key message is it's not going to be a straight line, right? So I think we have -- I think to some degree, with your help and your team's help, believe that, okay, you have about $1.2 billion in revenue capacity, if I'm trying to dumb it down for myself, as you get towards 80% capacity utilization, that's where the margins can move back to where we saw them a few years ago. But the important point is if that's a good basic framework to apply here, that doesn't mean it's going to move linear with revenue over the next 3 to 5 years. Is that right?

Yes. So I'd kind of say it this way, right? We've shared that we think that 5-ish years from now, we get close to that 30% EBITDA, right, and kind of back to high-ish 50s on the gross margin, right? I think the reality that I share is leverage that's more tied to that top line. You see that more at the EBITDA, right -- or EBIT op margin. And that's just by this equation of you grow your OpEx less than your top line, you will get leverage, right?

And that's the way we're thinking about it. I think the gross margin gets some volume leverage, but not the same order of magnitude. And then price will help, right, low single-digit price that we get kind of year after year. And then having enough productivity through our factories and other initiatives we take to more than offset the inflation that we end up, right?

You walk in every year and you've got your salaries up and you've got some other market inflation and between the productivity and the sourcing that has to wash or maybe net positive and then you get your volume fall through and you get a little bit of price. And that's the algorithm, right?

And we see -- we've talked about maybe 100 to 200 basis points of gross margin kind of each year. And then I think if we grow -- or I think if we grow OpEx at a rate lower than top line, then we'll see even more leverage at the EBITDA or EBIT margin level. And I think the story on that, I think back to your point of the trajectory, is we believe that we still have some investment to make in our teams, our infrastructure, call it, our systems, the processes that we have in order to have sustainable growth, especially if we reach 1.2 or double the size of the business.

And what took us from $100 million 10 years ago to today is different than what we need to sustain a much more -- right? Just think about the product portfolio we have today versus what we did. And even -- and we're having this discussion with some of the folks earlier about go to your COVID years, huge, huge volume, right, a lot of profitability, you had a small number of real products that you're selling, the simplicity of that.

And so we just know -- and it's Olivier, it's myself, it's my peers and the team. We've all been at big companies, and we know the process structure that we need in order to do this right. And that's why we feel like '26 and probably even into '27, we're investing at a rate where that growth of OpEx is a little bit closer to the top line growth.

And then I think as we get beyond that, we'll be able to maybe dial that down a little bit and accelerate in some of that scale. And I know people reading the transcripts can't see my fink hand, but it's -- and then spike up in the latter part of the year. So that's the way we're thinking about it. And for me, it's playing the long game, right? Yes, could we squeak out some more margin over the next couple of years, but at the risk of not having something that's robust to grow and grow going forward, I think that's the short game, and we're playing the long game on this one.

Yes. And to maybe put a little differently and in my words, I mean if you look at where the portfolio or how the portfolio has evolved organically and inorganically kind of seems like you've earned the right and frankly, as investors, we want you to do more of that.

Yes. Absolutely. That's great. Thank you.

So subsequent to the complement, a question, are there still some key areas where you think some investment is warranted to build out the menu?

Yes. And it's really across the board. Again, you bring in world-class leaders. And again, when you look at Olivier's staff and even our staff below that kind of that N minus 2, I mean, we brought in world-class leaders. They've all been industry experts, sometimes within industry in bigger companies, you bring in new leaders, well, they understand, well, here's where we're at, guys, here's where we need to go and here's some of the spend.

And so it's really across the board. And -- but it's also this idea that we can make some spend now and then it doesn't just keep going, right? We are going to see synergies, efficiencies. You're going to really start to get the benefit of scale and leverage. I've been sharing with some investors that we primarily had external counsel for a lot of our legal spend, right? We've hired some several lawyers in-house.

Yes, our expense this year is up. Next year, I'll actually be flat because now I can have pay internally versus -- but the great news is like I don't keep adding lawyers year after year after year, right? It's something -- and that's when you start to see that scaling sort of benefit. So that's the way we're thinking about it. It's across the board. And we've got, again, a leadership team that knows what good looks like and how to get there.

So that's what you described is it's broadening the team, it's bringing in new expertise. Even in the third quarter, I think there was some sort of one-off SG&A investment. So those are organic investments. I think historically, I'm sure there's years that are exceptions to this, but you've done 1 to 2 bolt-ons. Should we also expect that moving forward to continue?

Yes. So I mean we've done -- we did Tantti in December, we did 908 in February, we closed. So we're kind of in that space here for this year. Still very active in our pipeline for M&A. Again, we stand by our sort of criteria and philosophy that it's differentiated technology first. It's the ability to create synergy with that, with the existing portfolio.

And then it's also then making sure the financials make sense. We've talked about some gaps in the mAbs workflow that are always of interest. And then, again, even beyond mAbs, new modalities brings a whole new sort of set of workflow and opportunities for us as well. And those become the places that we'll continue to watch. And we've got some dry powder and flexibility. So absolutely, we'll be -- continue to be active there.

And that's all part of the algorithm that gets you to double revenue in 5 years?

Yes. So we called out modest M&A, right? So if there's something bigger, then it kind of may expand that algorithm, but sort of modest M&A within that 5-year window, which is kind of more in line with your point, the bolt-on.

Yes. Maybe just with the 2 or 3 minutes we have left, we can do a little bit of ATF modeling cleanup.

Sure. Let me get to my expert on this one.

You had the benefit of delivering ATF hardware for a large blockbuster in the third quarter. I don't think you've disclosed it, but our guess is that was about $4 million in revenue. Let's say, we're in the right neighborhood. How -- I guess, the dollar amount upfront doesn't matter as much in terms of where I'm going with this question. But like once the hardware is in place, how long does it take for you to start to see the consumables kick in?

Yes. It's a fair question. So we delivered the hardware in Q3. Just keep in mind, it still has to get installed, still has to be validated. So this is probably more on the longer project where we got the order a year ago. But you could probably expect consumables pull-through to start in the back half of 2026 for this program.

Just to outline: So we gave a couple of figures, and this is for N minus 1 processes. If you get into a perfusion process, the economics get a little bit different. But in an N minus 1, you might be having 2 to 3 single-use ATF on the seed train bioreactor. Those single-use ATFs are probably in the mid-5 figures. You're running those per batch. And then there's an associated controller for those ATFs as well, which typically run in the low 6 figures.

So at peak demand for a blockbuster, assuming ATF is implemented across all of the sites that's manufacturing that biological drug could be in the $15 million-plus. If it's just a regularly commercially approved drug, you're looking at peak volumes probably in that low to mid 7 figures on an annual run rate.

And in between, like you said, in the example we're using from Q3, there's very limited consumable revenue until really for the better part of a year. And then -- but you don't go right to 15, it's low single digits, gradually moving up to 15. Is that the right way to think about it?

Yes, that's fair because typically, they'll start ATF at one site and then they'll implement it across various sites that they're manufacturing that drug. So there is a ramp up, if you will.

Okay.

And there are some consumables you deliver, of course, when you sell the initial...

[indiscernible]

Right. Exactly. So then your replenishment has to eat through some of that as well.

Maybe the last one. I talked about the doubling revenue in 5 years and that's, I think, what happens if you grow 15% a year, I think that's where you end up. Is there a scenario where that could occur a year or 2 quicker based on some of the things we started talking about? Again, it's doubling revenue in 5 years is pretty good. But just to push you a little bit further, there's a lot that's going right, right now.

Yes, there's always going to be scenarios that I feel like that's the right way we should be driving the business. And again, we're playing the long game here. So if we make the right investments, we can do that in a controlled way and build a broader portfolio and a broad portfolio. And -- but yes, are there scenarios that could be better? Yes, we'll issue that when we give guidance.

Yes. Let's see what happens. All right, guys. Really appreciate the time. Super helpful. Thank you.

All right. Thanks a lot.

Thank you.

Thanks. My name is Matt Stanton. I'm on the life science tools and diagnostics team here at Jefferies. Happy to have the team from Repligen here with us today. We have CEO, Olivier Loeillot, as well as Jacob Johnson from IR. Gentlemen, thanks for joining us here today.

Maybe, Olivier, just to kick off, if I think back one of the hallmarks of Repligen's story has always been the outgrowth algorithm to the overall bioprocessing market. If we go back to pre-COVID, that was China, new modalities, new product and share gains. Maybe just help level set us on the go-forward outgrowth algorithm. Is it the same factors? Are there new factors? I know you've been focused on areas like fluid management, strategic accounts. So just maybe help level set us on the next 3 to 5 years, some of the main factors underpinning that outgrowth algorithm for Repligen.

Well, good afternoon, everybody. Thanks, Matt, for welcoming us today. Yes, we're obviously very delighted by how quarter 3 has played out for us and even beyond quarter 3, how the first 3 quarters of the year have played out for us. We've had really a great performance across all of our businesses, but also across all of our market segments and even across all of our geographies. So obviously, really very delighted about that.

So 18% organic growth in the quarter. In fact, when you look back to the last 4 quarters, we grew anywhere between 14% and 18% for 4 quarters in a row, organic non-COVID, so really great shape. What I think also is something I want to emphasize, it's -- we have a very diverse market, very diverse business today. I mean everybody thought we were Sarepta and Sarepta [indiscernible] completely we are not. I mean, we've showed like we are capable to grow and even they deliver higher numbers than expected twice during the year with some of the headwind we had during the year. So we have a very diversified portfolio of products.

To answer your question very specifically, it's really an algorithm based on several factors. I mean, I'll start by saying we have -- we are an innovative shop. So I mean 80% of our portfolio, we think we don't really have a direct competitor. And that's how we are growing faster than others. We are creating new market segments. We are not just trying to fight and gain market share on a very crowded market. We are literally trying to create new market segments.

The second factor, obviously, we are very much towards clinical. I mean, still about 65% of our portfolio is going into clinical products instead of commercial. And obviously, every time a product moves from one phase to the other, you typically see a doubling of needs and so on. So that's definitely a big factor. If I have to pick up maybe a couple of others as well, I would definitely pick up our key account management strategy. This has helped us to really outpace growth as well over the last couple of years. I mean, where those big pharma companies knew only maybe one or two of our product offering, they've realized in the last couple of years, we've got one of the broadest range of products.

So obviously, now we've opened the door, we are able to sell multiple products and we've got many more opportunities over the next several years. And finally, I would maybe just mention Asia. I mean Asia is only 15% of our sales. Most of our competitors have anywhere between 20% and 25% of their sales in Asia, which is why we've been spending a lot of time and focus to develop our organization down there.

All right. That's helpful. Maybe to dive into the Filtration business, it's your biggest business. I think there's a lot of focus on ATF and rightly so and we'll talk about that. But there's plenty of other things in that portfolio. So maybe just talk through what you're seeing on the non-ATF side of the Filtration portfolio in terms of demand innovation, things like that.

Yes. No, I'm glad you asked that question this way, honestly, Matt, because people sometimes feel we are only ATF. We are far more than just ATF. And ATF is great. We love it. But outside of ATF in the Filtration franchise, I mentioned 3 ones -- 3 areas. The first one is really our systems, which, as you know, we've had 3 very good quarters out of the last 4. I mean we are positioning a lot of downstream systems, this is TFF system, very successfully. And what's beautiful about it is there is a lot of consumable coming alongside those -- sorry, I'm just checking. There are a lot of consumable sales coming alongside those systems we are positioning. So that was one part of the growth.

Then we also have our flagship cassette called TangenX, which has been a really great performance for us now for the last several quarters. And last but not least, you mentioned fluid management. It's really a great story we are experiencing here where people didn't know us at all for that part of business a few years ago. And now we were getting access to a lot of RFPs, including our mixers as well that we didn't get earlier, obviously, and that's also growing very nicely as well.

Okay. And then maybe shifting to the other side of Filtration with ATF. I think on the 3Q call, you guys talked about being involved in kind of 50-plus later-stage type products there. As we think about the ATF portfolio just maturing, right, I think you've talked about a couple of million dollar pull-through on the consumable side once those go commercial. So 50-plus programs, those all go commercial. You have a couple of hundred million dollar opportunity. That's before some of the blockbusters. So just help us kind of maybe dimensionalize the ATF opportunity over the midterm as that clinical side of 50-plus moves along the pipeline.

Yes. I'd like to say we are really at the beginning of the story here. I mean -- and when people ask me on a scale from 1 to 10, where are we with that product line, we're probably anywhere between 2 and 3, meaning there is so much more growth for opportunities. And the reasons are multiple. I mean it's fair to say most pharmas and most CDMOs are using ATF today, the vast majority, in fact, are, but the vast majority as well are using it for one product. And for the first time this year, we had a customer telling us we decided to use it across our entire monoclonal antibody portfolio. So that's only one. And in the meantime, they are introducing on the second product, and they will probably introduce it on the third. But most of the other customers, they are still only using it for one product.

The second reason is most people are using it at the N minus 1 level, and now they're going to start using it at the N level as well and N level requires many more systems than it does on the N minus 1. So that's another reason as well. And then finally, I mean, CDMOs for the first time, I've never explained that before. They like the technology so much now that they are even guiding their customers telling them, hey, we are okay to take your product, but only in case you let us intensify it because it will not make sense from a productivity yield point of view otherwise.

So we're at the beginning of the process. We are very excited about it because we know we've got a fantastic technology. You have to just not become complacent, which is why when we acquired 908, we said we're going to try to combine the Raman technology, which is a product called MAVERICK to our ATF technology so that people really now can not only intensify that process, but at the same time, read out the performance of what's going on in the bioreactor, and it looks very promising. So that's something we're absolutely looking forward to as well. So a lot of runway on ATF.

Okay. Maybe shifting over to the Protein business. Historically, a lumpier business for you in kind of the broader market? Maybe just level set us on kind of outlook for protein market demand, assuming you're going to come in better than that. Is that share gains, innovation? I think the partnership with Ecolab has gone really well. You guys have really ramped up the cadence of introduction. So just level set us on market growth in proteins over a longer period of time and how you'll outgrow across that market.

Yes. No, sure. I mean if you look back, we went through the perfect storm with that product line. I mean, because indeed, as you mentioned rightly, we were a pure OEM partner to 3 companies. And 2 of them have disappeared completely, I mean. So we had to reinvent our business completely, great collaboration with Ecolab. We are delighted about it, and we work closer and closer together, and then we were experiencing some very nice growth on that side. But beyond the monoclonal antibody collaboration with Purolite, we have our own destiny in our hands fully for the rest. And I have to say, we've had much more traction than I would ever have thought we would have at least a couple of years ago when I joined where a lot of big pharma company realize there is now a company that is capable to develop for me in a record period of time, a full resin solution.

And not only it has opened a store for clinical products but for a lot of commercial drugs as well where for whatever reason, they were using the wrong technology for a long period of time and now they feel they have access to somebody who can help them developing a brand-new technology. So that's why this year only, you look at quarter 1 and quarter 3, we over-delivered those 2 quarters versus our initial sort because of some of these lumpy big new protein opportunities that I think are going to come more and more often in the next few quarters. There will be some lumpiness, but the strategy we've had is working extremely well, and we are very optimistic about what's coming around the corner here for sure.

And maybe just on that, I know you guys haven't guided for '26, but I think you'll do 15%, 20% growth in proteins this year. Again, it's been a tough period before that. Like you said, like can proteins grow in '26? And then when you talked about some of the items there, when will you kind of have the visibility in the order book there just given if the revenues are lumpy. Obviously, the orders are lumpy, too, on the customer side. So talk about maybe when you'll have the kind of visibility around proteins for next year.

Yes. So first of all, we didn't guide for next year because I think knowing all of our bioprocessing companies in the world are operating like they were before COVID, where you typically have 3, 4 months of backlog in your hands. We are of the opinion like you can reguide properly once you've got the data in your hand, which is going to be when we report out our quarter 4 resource. So I know a lot of people were wondering why are they not guiding? It's just we've never done that. And I don't see any reason to do it now that we've been doing so well for the entire year. We don't think it's the right time to guide for next year yet.

But in terms of protein, I mean, and beyond protein, I mean, we've just went through our 5-year strat plan. Each of my franchise leader came with very similar type of growth CAGR for the next 5 years. That's why we said we are very confident we're going to be able to double the size of the company in the next 5 years with modest M&A activity, and that's across the board.

So if you just make a quick calculation, it means about 15% CAGR across the board, and I don't see any reason why any of the franchises would be significantly lower, and that does include protein as well here.

Okay. That's helpful. Maybe on Asia and China specifically, I think you were over in Shanghai recently opening an office. I think you've talked about Japan, Singapore, done a lot on the commercial front over there. Maybe just level set us on kind of the foundation you're building in APAC. And then specifically on China, what's kind of the right way to think about a return to growth and the magnitude of growth in '26 but also beyond. I think both you and some of your peers have started to sound maybe a bit better about China after some tough years.

Yes. So I spent a lot of time in Asia in my life, I even lived there for 3 years in the past and so on. As I mentioned earlier, Asia is too small for us. I mean we can have only 15% of our sales down there. So we've been working on a very specific, very focused Asia strategy now for the last 1 year, 1.5 years or so. And you're right, you have to reseparate China from the rest because China deserves the strategy on its own. For a couple of reasons. First of all, I'm convinced that China biopharma market is going to be one of the fastest-growing market from mid of '26 onwards, but the way to win in China today is totally different than the way to win in China before COVID because there are a lot of local companies that have improved a lot in terms of their capability to support the China market.

So we are working on a very unique specific strategy in China for China that I think is going to enable us to grab some of the market share we've lost over the last several years back. And then outside of China, I mean growth has been really very strong for us for several quarters. In fact, in quarter 3, our growth in Asia globally, including China, was close to 50%. And what's great about the rest of Asia is pretty much across the board. I mean, I've talked a lot about Japan, Korea, Singapore in the past. In fact, this year, India is a market that has been doing extraordinarily well for us as well. So we're seeing really strength pretty much across the board. And outside of China, we're also looking at can we have a bigger play in region for region, and we are working on a couple of potential plans down there.

Okay. And maybe just on your point around just kind of like being under-indexed relative to peers in that region. I think they're at 20%, 25%, you are 15%. But 3Q was really strong, right? I think it was about 20% in the quarter. So as we think about that transition, there's obviously the China piece, but then also some of the ex-China items, like any finer point in terms of the cadence from here to kind of get towards, call it, peer benchmarking levels?

Yes. Our plan, and you're right, it was a good surprise to be at 20% in quarter 3. Our plan would have been to be at 20% in 5 years from now. So let's not get too excited about quarter 3. There were a couple of big reasons why we did so well in quarter 3. Our plan is really to move towards the 20% in the next 5 years. If you ask me, I think we're going to be faster than that because we are very ambitious and we're investing quite a bit down there, but that's the real plan initially was to be at 20% in 2030...

Okay. On new products, maybe first with the new mixer out of Metenova, I think you launched it earlier this year in 1Q, you've kind of been demoing it, taking orders. Talk about maybe initial reception, why the product is differentiated. And then as we think about as you start to ship and recognize revenue on that, how do we think about the Metenova mixer new product cycle relative to some of the other successful ones in Repligen's past, not mixers, but other new products.

Metenova for me is a perfect example of our M&A road map over the last several years. We acquired that business. I'll tell you openly when I joined, I was a little bit surprised initially why we would have bought a stainless steel mixing technology. And then after a day, I understood the mixing technology itself is absolutely unique. I mean it's the best mixing technology in the world because it's very smooth. The quality of mixing is much better. The vortex you're generating with that magnetic technology is much better than anything else. And then obviously, when we acquired the business, the idea was to turn it to our own single-use mixers, which we've done in a very record period of time because it literally took us only 1.5 years to have our own mixers ready.

So you're right, we launched at beginning of this year. We are demoing across the board at multiple accounts. One of the good news that some of you have picked up is our -- one of our biggest competitor on the stainless steel mixer side company called Steridose has decided to step out of manufacturing of stainless steel mixers earlier this year, which is strengthening even further our position on the stainless steel mixer side, which is very important because people know us already as the best mixing technology and now that we've got the single-use version of it for people who are very heavy on single-use technology as well, they are very interested to work with us on those single-use mixers as well.

And then one of the great signs we get about the successes we have here is we are getting multiple RFPs over the last couple of months now for big hardware expansion projects that include mixers. And now that we've got mixers, ATF plus all of the downstream system as well, we are probably one of the broadest suppliers of equipment for bioprocessing, as you see me coming with the upcoming onshoring big RFPs that are going to come in the next couple of years that should really represent a huge opportunity for us here for sure.

And then can you just remind us, I think one of the attractive opportunities around the mixer when you launched the single-use mixer was around the bags and the consumables side that sits with the mixer. So maybe just help us with the strategy there and kind of what is the plan or cadence you start to place these instruments? Like how quickly can you start to kind of pull through the bags on the other side of the placements?

Yes. So it depends pretty much, Matt, but in most cases, you're going to start selling bags as soon as you sell the mixers because people want to at least be able to test the new equipment they are buying. One thing I didn't mention and every type of acquisition we're making or innovation, we are trying to connect the dots, if you want to be heavy on the single-use side, you need to have the best film. And luckily enough, we launched a film about 1 year, 1.5 years ago, which is extremely unique because there is only 2 films in the entire industry that enable you to manufacture your bags with a fully automated manufacturing line, and that's how you're generating economy of scale because most of the other company can only manufacture their bags manually, which cost you a lot of money because it's a lot of labor costs and so on.

So whether you go to a low-cost country or whether you're in one of the most industrialized countries, you're going to have a very high cost for manufacturing those bags. Our film will enable us to manufacture with a 100% automated line, which is going to be a huge advantage in terms of cost of goods as well. But -- so it's going to come very soon after you sell the equipment and the opportunity can be very significant here.

Okay. That's helpful. Maybe over to a different new product introduction out of the process analytics side with VPE. And I think myself and others maybe overlooked on the 3Q call, but you talked about this idea of a replacement cycle, which is a bit [ foreign ] and sometimes in bioprocessing. So maybe just talk a little bit about the replacement opportunity there. I think it's been a while since they've kind of rolled out new technology. So as we think about the pace and cadence of deploying those instruments, the customers are using, you kind of know the base. How do we think about that replacement cycle after the launch?

Yes, it's funny because if I look back, if there is one thing I really missed for this year growth was with the opening we had on the analytical side. And particularly guilty because when I joined the company 2 years ago, one of the first thing I realized is we've not launched a new version of that Solo for 15 years. And I've had the chance in previous life to see like you need to launch new products every 3 to 5 years. So I did mention we need to hurry up launching a new version and the pickup has been very fast now in quarter 3. And the good news is we're just at the beginning of the cycle. We have an installed base of Solo, which is more than 2,000 units around the world. We literally only replaced 2% of that installed base so far.

So you would imagine that should be a tailwind for the next several quarters, if not several years up to the time, hopefully, we're going to have another new version of the same equipment. So that's a virtuous circle we've started to enter into and that I think is going to be very exciting. And keep in mind as well, we are combining that Solo equipment with our PAT technology flow, which also is a big differentiator. So we think it's going to position us very well here.

Okay. On the new modality front, you mentioned earlier, right, there have been some headwinds this year you guys have worked through that, still raised numbers. It's been isolated to one customer. Maybe just talk about kind of demand you're seeing more broadly across new modalities, cell gene, even mRNA, some of the other stuff you're doing. And then as we think about the midterm plan you talked about earlier and the growth among franchise is pretty similar as new modality in that ZIP code too? Could it grow even better. Historically, it's been healthy 20%-plus grower. But maybe just trends today and then also over the next 3 to 5 years, kind of what that new modality growth looks like?

Yes. So we expected a muted demand in the second half because of the headwind we had on that specific gene therapy program. This is probably going to continue and last for another couple of quarters because we had -- the comps are going to be pretty tough in the first half of next year. But outside of that specific program, I mean, new modalities have been doing really well for us. And you mentioned cell and gene therapy. I always like to separate the two because where gene therapy had a lot of headwinds this year, on the other side, cell therapy are on a roll again.

And one thing I've said multiple times as well, the beauty of having in that industry for so many years is you realize you always have 2 cycles of growth, the initial cycle when a new modality come to life first where everybody gets excited about it, then you come to a bit of a hangover period for a certain number of years. And once the second wave starts, then you know you're going to be enjoying it for several years. And ADCs and cell therapy and for sure, oligos are now entering the second phase where gene therapy is informally now going through the valley of this for probably the next couple of years, but I'm absolutely convinced that you're going to see the rebound later on.

So to answer your question, outside of that specific gene therapy, the rest is doing really well. And we are in a much better position today probably than we were a year ago, meaning we've diversified our play with many more new modalities across the board, including cell therapy, including antibody drug conjugate, also where we have a pretty extensive workflow to offer to customers in the field here.

And maybe just on ADC, just talk about kind of like how much that you're doing traditionally with mAbs kind of fits right in there and where like competitively, do you have a portfolio there relative to others in terms of strength for ADC?

So when I talk about ADC, I always isolate the antibody side because the antibody that is being used for ADCs is being manufactured with the normal ways and so on. So it's not incremental market. What I'm really talking about is when you combine it to the toxin and all of the purification, filtration steps that are being needed to get the final product. So we have a really broad portfolio of solution, both from a filtration but from a purification point of view as well. We've rearticulated that as a full solution, and we're having multiple discussions with the big actors in the field, whether pharmas or CDMOs to make sure like we're helping them developing more innovative solution for that workflow right now.

Okay. And maybe just on margins, we haven't seen a normal demand backdrop here for a while, but assuming the next few years or more normal demand backdrop. Is there any way to kind of think about the relationship between growth and how OpEx will trend relative to that or just really the cadence of margin expansion from here?

Yes. So this year is going to be a good year for us in terms of margin. I mean, I think at the midpoint of our guidance, our gross margin are increasing by about 200 basis points. We're aiming to grow north of 100 basis points every year for the next 5 years. It very much depends on the one side from volume, obviously, but on the other side, from a product mix.

What I think is probably more important is really what we're going to be able to achieve from an operating income point of view. And as you know, we've mentioned we are aiming to grow towards 30% EBITDA by 2030. We're going to get a lot of leverage. I mean it's a fact we've invested a lot this year into talent, into a lot of infrastructure as well. Next year, probably still quite a bit. And then I think from '27 onwards, we're going to start to get much more leverage out of all of this investment here.

And then maybe just real quick to wrap it up. As we think about '26 and the market outgrowth potential, I mean, what are some of the areas you see most likely to drive even further upside? Is it strategic accounts, China, new products, right? You have a number of kind of positive momentum factors. What do you see as kind of the upside drivers in '26?

Yes. I mean we've always said we are aiming to grow 5% higher than the market and so on, which is already pretty ambitious. As you know, next year, we've got about 200 basis points of headwind with gene therapy. I mean what could help accelerate further is if we see an even stronger rebound on capital equipment. I mean it's a fact that capital equipment market is still not at the highest level it could be. China is another factor for sure. I mean, if we see acceleration of China pickup and if our strategy reveals to be really working well as I expect it to be.

And maybe finally, emerging biotech as well. I mean, this great quarter 3, let's see if it's being confirmed later on. And if it does, we see better funding. I think funding in quarter 3 was $13 billion versus $9 billion in quarter 2. So if this is being confirmed and so on, then I think we could see even further acceleration.

Great. Well, we're out of time. I'll leave it there. Thanks.

Thanks.

I'm wrapping up the quarter for a lot of these sessions. As a kickoff, for Repligen, it was a good quarter. It was 18% organic growth. Each of the key product areas was up double digits. Op margins were 14.2%, down 70 bps and then you beat the streak by $0.05 on the bottom line.

Maybe just talk a little bit about what got you there and what you think about where the various components of the business are right now?

Yes. No, absolutely, Daniel. You're right. We are obviously very happy about our quarter 3 results. I mean, year-to-date non-COVID organic growth of 16%. So obviously, we are delighted about that. And what I think is really important is to figuring out we really have that broad and innovative portfolio of products. Sometimes people have a tendency to summarize our business in one single product line, but we are very diverse. And quarter 3 was a showcase here where really the 2 franchises that over delivered were analytics and protein and which was not completely expected to be very open here, but that was really a good surprise. And again, the breadth of our portfolio is a testimony of how we can grow faster than market. We've always said we want to grow more than 5% above market growth. And this year, we're probably going to be significantly above that.

And then in terms of market segment, I mean, we know like biopharma recovered almost 1.5 years ago. CDMO probably about a year ago, what was really the good surprise of quarter 3 was small biotech, where for the first time in a long period of time, we had a really nice rebound, both in terms of sales, but even more in terms of orders.

And then finally, I'd just say, really, I'm delighted by the commercial execution we have. I mean, Dan, like since I joined, I had a lot of focus on the big accounts and our key account management strategy. And I mean this is just working beyond our expectations. So yes, overall, very happy about the quarter.

Yes. The emerging biotech element of the mix was interesting. Can you just expand on that a little bit? Does that involve only pre-revenue biotech companies? How much of that was China? And what's going on over there with their own biotech development trajectory? I'd love to hear just a little bit more about what got you to this more encouraging position that you're in?

Yes. No, absolutely. So what we call emerging biotech for us are any biotech company that doesn't have a commercial product on the market yet. So for example, Sarepta would not be counted as an emerging biotech because they already have a commercial drug. So it's any company that doesn't have any commercial drug yet on the market.

So obviously, we're trying always to understand why did this market segment did so well for us in quarter 3. And obviously, the easy answer could be, oh, funding has been much better because funding of biotech really went up to about USD 12 billion in quarter 3 versus I think $8.9 billion in quarter 2 and $8 billion in quarter 1. So great improvement on that side, but this is probably too early to say this is money going directly into those biotech companies that triggered some of the POs because typically, there is a 6-month lapse of time between the time they get funded and the time they spend the money.

So we think there are probably a couple of other factors. And probably the biggest one is a lot of biotech companies have been acquired in the last 6 to 9 months in the U.S., and we have a specific example of a biotech with whom we've been working for several years on a specific custom resin. And as soon as they got acquired, we got a huge PO coming within the next 2 weeks or so. So I think there is definitely a lot of money entering into those biotech world via acquisition. And then hopefully, in the next few quarters, we're going to see some of this better funding also having an impact on further growth. But order intake was very high. So we are really pretty excited. We need to get confirmation over the next 2 to 3 quarters, and then we'll be able to celebrate more.

And as far as China, I mean, it's not so much really biotech in China that triggered that growth we see on the small biotech side because in China, the biggest chunk of our business is really with a more established pharma company down there.

When everybody -- when emerging biotech took its downturn and everybody was trying to understand exposure levels, the way that you had framed things was to say that there was 10% to 11% of revenues coming from the small biotechs and then you had some additional exposure through CDMOs, probably on the order of 500 basis points. So it kind of got you to a mid-teens number as an emerging biotech exposure level. Is that still the way that you would characterize things?

No, it's lower than that, Dan, for sure. So if you just exclude CDMOs for a while, I mean, our exposure to those small biotech segment is below 10%. Our sales in quarter 3 were exactly 9% to that segment. And then the CDMO bucket is a little bit more difficult to figuring out because you don't really know exactly what type of customers those small biotech have. But I would have probably a couple, maybe maximum 3 points of business coming from small CDMOs going into small biotech. So if you aggregate the 2 together, it's less than 15%. I would see it more around the 11%, 12% range at this stage.

Okay. Maybe just thinking a little bit about some of the business areas or the product areas. Filtration, when I think about where your commentary has consistently sounded good, it's on ATF for sure. That sounds like a product line that's doing very well and has done well for you. And the filtration outlook for the year is 10% to 12%, but it actually went from the middle of 10% to 12%, which is obviously 11% to closer to the back end of the range. So those 2 ideas seemingly are moving in opposite directions. Can you just maybe clarify your outlook for filtration this year? And then I guess the natural next question would be, how do you think ATF does going forward? And what can filtration grow at going forward?

Yes. So if you allow me, I'll start by being very positive on saying it's amazing to see we've been able to raise guidance twice within the filtration now going more towards the lower end of the range, meaning like the 3 other franchises have been doing extremely well for us. And again, the showcase in quarter 3 was really analytics and protein. But back to filtration and before answering about the 10% instead of 11% if you think about 2024, where we had still about $11.5 million of COVID sales, plus the headwind we are facing right now with that specific gene therapy program, the 10% growth this year on filtration is really more around 15% to 16%. So I think it's important to ground people with that because the filtration business is doing very well.

So now to the point about why 11% to 10% within the filtration portfolio, we've got the fluid management business that is included there. And we've had incredible traction this year in terms of order intake. And we were hoping to probably mid of summer time that we would be able to get more products out of our plants to be delivered in quarter 4. And unfortunately, the increase has been so huge like our plants are running a little bit behind, and we had to inform a few of our customers that some of the deliveries that we are planning to do around November, December are going to be more happening towards January, February.

So the real only reason why we moved from 11% to 10% for Filtration is just a delay of supply of some of these orders we got now for the last 6 months in fluid management that are going to be delivered in the first quarter of 2026.

It is a pretty classic analyst thing to do to pick the 1 out of 4 businesses that doesn't have a [indiscernible] increase and focus on that one. So let's talk about some of the other ones. Chrome is having a standout year this year. What do you attribute that to? And then when we think about this mix to our point on filtration, what is the likelihood that chrome ends up being the faster-growing segment between the 2?

I don't know. This year has been beyond our expectation on chrome. And let's take a step back. Last year was probably, if I had one franchise I was not very happy about last year was chrome. So we made quite a couple of changes in terms of organization there, both from a commercial, but from a product management point of view as well. And now we have a team that is really focused on grabbing more of these big pharma customers. Historically, we've had a lot of traction with CDMOs, but it has been more complex to convince big pharma company to switch to prepacked column. And this year, we managed to convince 2 of these big pharma companies to switch. So that's a great news.

The less positive news is very often when we start entering into a new relationship on the prepacked column, we have to take care of buying the resin for a certain period of time, typically 1 to 2 years, and this has some dilutive effect on -- from a margin point of view.

So where are our sweet spot? If you look at the entire chrome business is to be anywhere between 20% and 25% of our sales on naked resin. This year, we are more towards the upper end of that range, where last year, we were below the lower end of that range. But that's an investment we're making, and we are so glad because now we've converted 2 big pharma company. And typically, this is for the long term, and we are going to be working with these guys for several -- the next several years here.

But in terms of future growth, when we went through our strat plan in July, we came like with very similar growth across the 4 different franchises. There is literally only 2% difference between the lowest growth CAGR we have for the next 5 years and the highest we have. So it's really very cohesive across the entire portfolio.

Keeping it moving to proteins. That was an upside segment for the quarter. To what extent was the surprise for you related to just market demand versus maybe some of the things that you're doing with the new ligands that you're developing, the new resins that you've been developing, customers like Tantti, Purolite, et cetera?

Yes. I'd like people to really understand like we had to change our business model on protein almost 180 degrees over the last 3, 4 years, and big credit to Tantti and the team here is we started that exercise already a few years ago or so, but we really had to move from being a pure OEM partner to 2 or 3 companies to now having our own destiny in our own hands. And it all started with the acquisition of Avitide a few years ago, where it gave us access to developing custom or catalog ligands. And then with the acquisition of Tantti last year, now we've got the ability to develop full resin solution for customers.

And I mean, there was a need on the market. I mean a lot of companies have been really waiting for a company like us to come and offer them those customization resin opportunities. And we've been really bombarded by demand on custom on one side. But at the same time, we're also developing our own catalog resin. So we launched a double-stranded RNA resin a year ago. We're going to launch 2 or 3 new resin by the end of this year, beginning of next year. So between catalog resins and custom program, we've had really a lot of great traction over the last several quarters. And if you look back this year, both quarter 1 and quarter 3, we had some really good surprises of customers to whom we indeed develop custom resins, one in quarter 1, one in quarter 3 where they came and say, "Hey, I want to order you a significant amount of that resin you develop for us, and we're going to use it right away."

So I think it's still going to be lumpy probably for the next few quarters because we are just starting to have some of these custom resin projects happening, but we've done so many seeding over the last several quarters now that I'm really optimistic it's going to be a very nice growing business for us.

Do you think that could be a double-digit growing business for you more often than not?

Yes. No, absolutely. That's what we're aiming for. I mean think about the big picture of Repligen. We said we want to double the size of the company in the next 5 years. So that means a CAGR of about 15% across the board. And as I mentioned, every single franchise is going to be growing almost similarly. So it means, yes, it's going to be one of them double digit for sure.

Okay. Maybe we'll talk about new modalities. In my humble opinion, the first 6 months of the year and the conversation around Repligen were very much tied to just concerns over this class of drugs. Pfizer, Intellia, Biogen, Vertex exiting the AAV space, Sarepta had the issues that it did or does. And yet when we talk to you about the things that are going on in the business, your point is that ex-Sarepta, things sound -- ex the one gene therapy customer, I should say, things sound pretty good. So can you just sort of lay out the way that you see emerging modality demand today, excluding the very obvious partners for whom we've accounted for in the guide, et cetera?

You're absolutely right, Dan, I mean we got beaten up quite a bit about new modalities at least during the first half of the year. So now when I look back, I almost think it was a blessing for us in a way because we've been talking about that very diverse portfolio of products and us being across multiple modalities, and the fact that even though we had some headwinds this year, we managed to increase our guidance twice, both in quarter 2 and quarter 3 means indeed, we have that very diversified portfolio of customer and different type of application we're dealing with.

And that's how we've been succeeding in the past. That's how we are going to succeed in the future as well. I mean we are not depending on one program and only one. I mean we're across a huge amount of different programs. So if your question is more specific about new modality, we are still absolutely very bullish about new modality. I mean, I'm absolutely convinced new modalities are going to be doing very well over the next 5 to 10 years. I mean, just look at the funnel of most big pharma company today. I mean, they still have almost 50% of their product in their funnel that are one of these new modality products. And then they realize like from a therapeutical point of view, they've got incredible potential and so on.

So will there be some headwind sometime? Yes, probably, which is why, again, we need to be broad. So where we were mostly focused on AAV and -- sorry, gene therapy and mRNA in the past, I mean, this year, we've been much more focused on other new modality like cell therapy with a lot of wins in the last 6 to 12 months, but also antibody drug conjugate, which I know we're not counting yet as a new modality, but in a way, it's a new modality, and we have a really A to Z workflow of solution for antibody drug conjugate. So we're just making sure we are playing across the board and whatever our customers need from us, we are capable to turn around very fast innovation for those specific product line and so on.

So yes, we're still very optimistic. And maybe demand is muted for us in the second half, might be muted partly next year because of the headwind we have on Sarepta. But considering the breadth of the portfolio we have, I mean, we are very confident about our future opportunity to grow.

Can you talk a little bit about cell therapy? It's the smaller portion of the CNG mix for you, but it does sound like you have appropriate products there, and it sounds like you're investing there. So how do you feel like that portfolio could evolve for you?

No, it's -- I mean, when you look at the funnel within new modalities, I mean, the richest funnel across the board right now is really on cell therapy. And what's funny having been in that industry for so many years now and so on is I've always mentioned about the 2 waves. I mean, back, what, 5 years, 10 years ago, suddenly people started to say, cell therapy will never make it and so on. But now we are reentering into the second phase, like the same happened with peptides, the same happened with antibody drug conjugate. And now gene therapy is more entering into the hangover period where probably the second phase will start again in a couple of years.

So for us, specifically on cell therapy, we've had incredible traction on the ATF side because obviously, cell therapy, it's all about having the highest amount of cells in your bioreactor and ATF is the best technology for that. But also with the acquisition of 908, we acquired really what is the best PAT technology today to track cell therapy manufacturing with a product called MAVEN, and we also have a lot of traction on that side. And beyond those 2 product lines, we are absolutely looking at how to bring a broader portfolio of products offering on that side in the next few quarters for sure.

Okay. And maybe just -- I wasn't planning on getting too in the weeds on the technology, but lipid nanoparticles are something that when you read about where the field is increasingly going, you land on that. There are products, I think, in your portfolio that address the needs for those customers. Can you just sort of like make us feel okay about the idea that should product demand increase there, you will have the solutions that are necessary in order to keep doing what you want to do?

Yes. Thanks for bringing that one because I forgot to mention it earlier, indeed, Dan. So what we love about lipid nanoparticle beyond the fact the technology itself is absolutely brilliant is lipid nanoparticle can be used both in gene therapy, but also in mRNA technology as well and even in some -- a couple of others as well. So the application of LNP can be pretty broad and LNP require quite a broad range of bioprocessing component from filters, but also purification technologies and obviously, potentially some of the single-use component as well. So we are getting more and more asked to support customers specifically with workflow solution for the LNP network, and that's also another area where we think there is a lot of potential as well.

Okay. So the products that are appropriate for those partners -- for those customers are the same ones that...

Very similar, yes. But well, same one in terms of the big bucket filters, purification, consumable and then single-use component, but they might require specific innovation because the needs might be slightly different. So it's the same categories, but innovation will probably be of a sense here because people will have specific needs here.

Okay. Maybe thinking about onshoring and some of the things that are being talked about, certainly in the life sciences space, I think that's the reason that our group has a pulse right now. You've been one of the management teams to be willing to talk about 2026 being a year where we think some things could happen. It doesn't seem like it's going to dramatically change the picture for you next year, but there should be some bubbling activity. What do you have as far as expectations go for some of these sites being moved onshore, greenfield or brownfield activity leading to additional product demand?

Yes. So I'll take just a quick step back because I think maybe during our earnings call, I mentioned something that was maybe slightly confusing is we've gotten a lot of RFPs in the last 3 months, meaning a seat at the table to answer some of these very big RFPs, which we never saw before. And the reason is because our key account strategy has now enabled our big accounts to understand the breadth of the offering we have in terms of hardware offering and so on. But none of these 3 or 4 big RFPs we received in the last 3 months were linked to onshoring.

Now talking about onshoring, yes, we do start to have some discussion with some of these companies who have got plans for onshoring in the U.S. And what we think is going to happen is probably big onshoring RFPs to be issued towards midyear 2026, maybe quarter 3 of 2026. And then depending on one company and the other and whether they've got an existing site or not, they might put some PO out as early as end of next year and to be delivered as early as beginning mid of 2027 or later if they have to build a brand-new site.

But what I think is important, and we talked a little bit about it recently is the numbers that are being announced are probably a bit too high too inflated, but even if it's not USD 500 billion that have been announced overall, even if it's only USD 50 billion to USD 100 billion of investment, this is going to be a huge opportunity for bioprocessing company because you can imagine that probably about 10% to 20% of those amounts are going to go into equipment, and that's going to be a gigantic opportunity for bioprocessing company. We are very excited because, again, we have now a seat at the table that we didn't have a couple of years ago, and we are starting to be involved in all of these RFPs. So it's an exciting time for sure here.

Which product segment do you think ends up being the beneficiary of that first?

Well, for us, if you look at hardware today, it's really from ATF to mixers, which we've just launched beginning of this year, and we've got a lot of traction from a technology point of view with a lot of big accounts right now. And then it's going down to all of the downstream hardware from filtration, TFF system, including chromatography system as well. So it's a pretty broad portfolio of product for us right now.

Maybe talking about hardware, which we didn't sort of touch on explicitly. That revenue bucket was up 20% for you. Can you maybe just elaborate on what you're seeing out of that customer base? And then how you think the equipment funnel develops into the end of the year being in next year?

No, absolutely. We're seeing that segment definitely from a different angle than others for the reason I just mentioned. We are still kind of a newcomer. So when you are a newcomer, everything is kind of incremental, and we are still small. And so obviously, for us, it's easier to show greatness and show growth when you're coming with a much lower share than the other guy have and so on.

This being said, I mean, I think we've got a very differentiated portfolio of products. And as you know, we are pairing our downstream system with our PAT technologies, which have got huge traction, so much traction that customers who have bought equipment from competitors are now asking us to install our PAT technologies on third-party equipment. So this is another reason why we are so confident about our ability to win a lot of market share. But it's fair to say the market overall has not gone back yet to full speed procurement of hardware, and we hope like these onshoring projects will be a real booster to see that market back to normal here.

In prior periods, when you see spikes or just increases in demand for hardware, are you able to see the consumables revenue increase a couple of quarters down the road and sort of point to that? Is that a dynamic that you feel is clear to you? And is that something that you would think we should expect going forward?

Yes. In that particular consumable bucket, it can be even faster than that, where there is a lapse of time for other consumable like cell culture media, resin, filters for specific consumable related to the equipment you're selling, you typically get orders very soon after you get the order for the equipment because people can't buy -- can't operate the plant without having the consumable. So imagine you buy a razor -- I mean, you're going to buy at least 2 sets of razor blade right away, otherwise, you just can't use it. So it's very similar in terms of single-use consumable flow pass, flow kits. Very often, people send you order at the same time as they sent orders for the hardware as well here.

Okay. Let's talk a little bit about margins. Jason is not here to defend himself, but I'm sure you'll be fine. The outlook for the company on an annual basis has been for 100 to 200 basis of op margin expansion per year. That was the way that the conversation took place in January, and it does not feel like we will get there this year, barring some dramatic fourth quarter performance. So the question is how -- but there are obvious reasons for that, right? I mean you have to invest in this business. You're up against 4 very large competitors. The portfolio is expanding. So when you and Jason think about op margin expansion as a philosophy, how much is it opportunities for op margin expansion if they sound the right way or we will deliver op margin expansion in a particular year? And is there a chance that, that evolves over the next year or 2?

No, absolutely. I mean, no, it's fair to say we've invested a lot in our business this year, and we've invested particularly in high-level talents because we needed it. And we realized like in order to scale the company and be able to run a double-sized company in the next few years, we needed to bring a little bit more horsepower, more experienced people who have had decades of experience in the industry and so on. So we've invested definitely quite a bit this year. If you really look from a pure organic OpEx growth this year, our organic OpEx growth is 14%, where our organic non-COVID growth is 16%. So we're still growing OpEx lower than -- organic OpEx lower than we grow top line. Next year, it's going to be down. We are aiming for probably 70% to maybe 75% of our top line growth in OpEx growth. And then it's fair to say like from 2027 onwards, this is going to drop significantly, maybe to the 50% level. So that's what we are aiming for.

So we're going to start, I mean, it's fair to say like we probably have about 80% to 90% of the leaders we need. And when I say leaders, I'm not even talking about my direct report, but the level below. We still have a little bit of homework to do, but we've done a big chunk of it, which is why next year, we still believe it's going to be around 70% of top line growth, and then it will drop to 50% the year after, most probably.

Okay. So the point is that from an investment perspective in personnel and just hiring, you should have crossed the Rubicon on some of the -- on most of the important folks you need to hire and that tend to be expensive?

Exactly. That's exactly because whenever you're onboarding somebody with more experience, the price is a little bit higher, but also you have to take care of the people leaving at the same time, that's absolutely fair. But also remember, our target is really to be at 30% EBITDA by 2030, and we've got a good road map to be there, probably with an acceleration towards the latter part of the 5-year cycle, but definitely on the way to the 30% EBITDA margin. And then in terms of gross margin, we're aiming for the mid-50s in the next few years as well. And so we've got a good plan here for sure. And we are very focused on it, be sure about that, yes.

Okay. Rounding out the conversation as we get down to the last couple of minutes, I need to touch on China because it was a bit of an interesting situation in the quarter, just in the sense that we started the conversation with the drivers in the biotech space and orders, and generally speaking, the China biotech environment feels pretty good, but orders slowed for you a little bit in the quarter. Can you just maybe put that in context of comps? And then just what you think the trajectory for China looks like going forward based on what you're seeing?

Yes. No, absolutely. We had a very strong order intake in China in quarter 2, and we did mention at our earnings call in Q2 that we thought if there was one region where there might have been a little bit of inventory building that was China. So no big surprise that order went down in quarter 3. Obviously, sales went up in quarter 3. I really expect a significant rebound of China business for us in the second half of next year. I think we've almost now come to the point where we stabilized the business for us there. And I think we're going to start to see nice growth in the second half. We are very focused on implementing what I think is going to be a very unique strategy in China for China. And yes, we are very optimistic to be back to growth.

I think this market is going to be one of the fastest biopharmaceutical market from probably second half of '26 onwards. I want to make sure we have a play down there because it's going to be a huge opportunity for the industry for sure.

And maybe with our last question, Olivier, I'll take it back to something that you mentioned with one of your first comments, which is that the difference between you and peers in terms of growth rates is changing. The spread is widening in a way that it really hasn't in the past. What would you attribute that to?

Yes. No, it's a great question. I mean I still believe we are aiming for 5% above market growth in the midterm. So you're right. This year, we are probably a bit above. We will see how it plays out in the next few years. Obviously, we all know we've got that 200 basis point of headwind from that gene therapy program next year. But I think 5 points is an ambitious target enough, and we're going to keep on delivering that with our innovation and the fact like indeed 80% of our portfolio, we don't really have a competitor. But also keep in mind, we have a huge tailwind because of our clinical exposure as well. I mean, we started the year with only 35% of our business being commercial. Probably we're going to land somewhere around 40% at the end of this year. But versus the big guys who are typically 75%, even sometimes more commercial, I mean, being in clinical gives you a huge tailwind because every time a project moves from one phase to the other, you see almost a doubling of demand. So that's the reason why we still feel like the 5% above market growth is a very achievable target for us.

Okay. I'm going to leave it there. Olivier, I appreciate you spending the time with us. Thank you.

Pleasure. Thanks, Dan. Thank you.

All right. With that, we're ready to kick things off. Next up, we have Repligen. Representing the company are Jason Garland and Jacob Johnson. Welcome, both of you.

Good morning.

Hey, Dan.

So Jason, Jacob, this is your first public venue since earnings a couple of weeks ago. And I thought it would be worthwhile to kick things off by reflecting back on the quarter, what worked well, what didn't work well.

Yes. No, we were really happy with the quarter, 18% organic growth. I think what was really encouraging for us was -- it was strength across the portfolio, right? So there was just a testament to how much diversity we brought and the broad capabilities that we offer and really saw that everywhere. And that was the fourth quarter, I think, straight in a row that over 14% as well. So again, good momentum.

And then just to keep that momentum going, orders, as we mentioned, were greater than 20% as well. So a lot of great standouts. At the margin level, if you look at gross margin, on a year-to-date basis, up greater than 200 basis points year-over-year. So again, really trending in the direction that we'd hope and a lot of great momentum going in front of us.

Did the breadth of the performance surprise you to any degree? Would you expect 1 business or 1 product line to recover at a bit of a faster rate as you're still in the recovery curve, I believe, as an industry?

I don't know that it's a surprise. I think what we find is that we might be lumpy, right? And so I mean, we've described that a little bit with the -- okay, protein's up in a given quarter or higher procured resin, and those tend to then drive some, I'll say, up and down on the gross margin level. But other than that lumpiness that might come with some key programs or key strengths, it was not a surprise to see that across the board. Even from a customer base, we continue to see strength in pharma, CDMOs as well.

And I think the other thing we highlighted was some green shoots at the -- more of the emerging side of the customer base as well. You can't call it necessarily a trend off of a data point of one, but we finally saw some growth there. There were some specific programs that we were supporting that helped, but also encouraged by the funding in biotech going up as well quarter-over-quarter. That one won't translate immediately. It's probably 6 to 9 months. But again, a lot of good strength there.

Okay. And one of the topics that was pretty prevalent in Q3 earnings season that I was happy about was a lot more companies were willing to talk about 2026 than we typically have on a third quarter earnings season. You framed the forward outlook as well. Can you revisit your high-end framing thoughts, especially since it seems like that caused a little bit of confusion in the investor community?

Yes, sure. Look, we're -- first, we haven't given guidance, right? And so there's still almost, I guess, just under 4 months, 3.5 months still to see how things are going to play and before we issue a guide. But what we really stuck to and have been consistent with is this framework that we have the ability and multiple ways to grow, on average, 5 points above the market, right? So we start there.

We also did call out though that there was the discrete new modality program, right, that offer -- that we took out of this year, and we see a headwind next year. So that may be 2 points of headwind. So you start with 500, you deduct 2 and you're at 300 over market. I think what maybe created maybe some difference of views was kind of the messaging from some of our peers and the broader set on, well, what does the market look like. So kind of coming into 3Q, you might have said, all right, we're still back -- we're back in that 8 to 12, so now it's 10 as a midpoint, plus 3, minus 2. But if now you're -- the messaging is well, the market is more high single digit, 8 to 9, well then they have a different jump-off point. And I think that's where some of the change may have come from an expectation perspective. But so if you use that 8 to 9, then that puts us through this kind of the 11 to 13 range with the 8 or 9 plus 5, minus 2.

So that's how we're thinking about it today. Certainly, there's a lot more to come from what we can see discretely, right. Because, of course, we use that as a framework and our ability to grow above market, but then it's what we see and what we have path to, and that's what we'll share in February. And from a margin perspective, really, again, a commitment to continuing to expand. So we'll, again, put more ranges around that. But we've talked about this 100-point plus at the gross margin level and being able to get leverage beyond that at the operating margin, and that's absolutely still how we're thinking about it for 2026.

Okay. I mean, one of the big variables on the market growth rate for the forward year seems to be equipment recovery. And as we were talking earlier, it seems like equipment has already recovered for Repligen. So walk me through whether that is or is not true and how you're equipment business is doing in relation to what you would consider a normalized demand environment?

Yes, that's a great question, Dan. So first, I'd start with there are a couple of somewhat unique things that have been helping us this year, especially. One is ATF, right? So again, everyone is aware of the strength we continue to see in ATF and the interest. When we sell ATF, we sell controllers that then help to control and operate the different filtration systems that go with it. That is reported in our equipment piece. So as we've seen growth in ATF and new systems, that has been a lift for us.

And I think it's kind of outside of the broader hardware economic cycle, right? I mean, ATF is very discrete in terms of if the CDMO or the pharma producer have adopted it, then you're making a decision on do I invest in this ATF and what do I save in terms of either less investment for new lines or faster output. And so the economic decisioning is different than the broader sort of system. So that's one piece.

Second -- and we called out this quite a bit in third quarter -- was a pickup in the upgrade cycle that we've seen in our analytics business. So from our CTech, we've been starting an upgrade approach to our SoloVPE to our SoloVPE PLUS. And we are in early innings on that one. So we saw that start. Certainly, we have incentives, and we've been helping to push -- get the word out there that it's an upgrade opportunity. So that was another real driver that we saw in the third quarter.

So there's a couple of things, I think, put us maybe a little bit different than the traditional hardware system equipment. When you look at that piece of our business, we're still not up to where we were, right? So that's the reality is that maybe like the rest of the market, that still has some opportunity to grow and get back to levels that we were used to. But these other things have been helping to maybe offset that and still show growth.

Okay. So if I could play that back, it sounds like you have a couple of very idiosyncratic growth drivers which have shown up as a recovery in your instrumentation. But if you thought about your bread and butter flavors of KrosFlo and such, you're still below where you would expect to be, and then there's recovery opportunity still going forward?

Absolutely. Well said.

Okay. Well, I'll confess, I hadn't thought a lot about the SoloVPE to SoloVPE PLUS replacement cycle or upgrade cycle prior to you talking about that in Q3. How should we as investors frame that opportunity?

Yes. Like I said, it's early innings. I mean, we have a lot of -- a large installed base. We've only started to scratch the surface there. Again, this is our at-line product. So again, we still really encourage and have taken the strategy of coupling our in-line PAT capabilities with our downstream filtration systems. So we're getting, what, 4 -- I think 25%, 1 in 4 now are being sold that way. So we'll continue to really encourage that in-line. But for the customers that still want the at-line, this is a product that's been around for many years and a natural sort of upgrade cycle.

And -- what it -- it's also helping us to think about are there other products in our portfolio that we can kind of take a similar approach, something that's been around a little while, and that could benefit from an upgrade. And so -- but again, on this one, in particular, it's still early, early days.

And I'm sorry, the difference between in-line versus at-line?

So -- and in-line is when they actually take a sample and then go to the lab and make a measurement versus the -- that's the at-line, and in-line is it does -- you don't have to take a sample, which is part of the flow.

Got it. So it's the at-line part of your analytics business...

That we're doing this upgrade cycle.

Opportunity to SoloVPE PLUS?

That's right.

Okay. Well -- and another topic worth talking about for Repligen as ever is the new modality opportunity. You mentioned when framing the forward year, there's one specific you're advising caution around. What about everything else in new modality?

Yes. So new modality, right, there's obviously a lot of segments within that. Gene therapy, there's cell therapy, the other pieces. So if you again look at gene therapy, where this particular program was, that's still an area that we're watching. But all the other areas and modalities within the new modality segment are really the same. They continue to grow. We have a lot of opportunities. Particularly excited about cell therapy and what opportunities we can offer there.

And I think what's really great about Repligen is we -- our offerings are very well suited to that space in terms of the ability to scale, the flexibility we have and the technologies that we bring. And so again, we're still overall very bullish on new modality as a growth driver for us. But obviously, a little bit of a reset with this particular program. And I'd say the gene therapy, still recovering.

Has anything changed from a product development standpoint? I feel that one of the reasons why you have the exposure to gene therapy that you do is that you had very specific product launches for that market, specific types of resins that are good at purifying AAVs, that kind of thing. Is that getting the same amount of development effort today as it might have in some period in the past? Or have you shifted in any meaningful fashion?

Look, still, 80% of our business is still mAbs, right? And so you got to feed and fund and invest, right, for the core part of the business. So that still takes precedent. But I think what we've done is it's had a good balance. It's still, to your point, being able to fund there when we look at M&A or acquisition pipelines. We're also trying to understand, are there things within the new modality space and technologies that can be broad and that we can help further develop and couple with our own. And so there's different ways at getting at new technologies, right? And so for us, I think we've -- we're balanced in the way we're investing across the portfolio.

Okay.

The only thing I'd add -- I think you're right, Dan. On the protein side of things, we do have some specific offerings for that market, and we do have some additional launches coming for new modalities from the protein side of things. I think the broader -- you think about our portfolio, a lot of our products are modality-agnostic. And so yes, we do have some specific products for this market, but a lot of it is kind of across the broader portfolio. We're selling into a variety of modalities. And to Jason's point, that's why we still think new modalities are a strategic end market for us. We understand that sentiment can ebb and flow. What we can control is seeding our products into as many applications as possible.

Okay.

And the other thing we've been looking at too is, is there a way you can provide a more enterprise solution, right, more kind of soup to nuts offering for some of those new modality spaces as well. So that's another area that we continue to look at.

Got it. But the mAbs are still 80% of your revenue, and you've got to feed the mAbs?

Absolutely.

How would you frame -- of that 80% of revenue, the difference between the branded versus biosimilars and how you're thinking about the biosimilar mAb opportunity? Because there are some big ones that are nearing their patent expirations here pretty soon.

It's a great point. We like to say that we're only about 10 years young, right, in our journey. And so the reality is that we missed a lot of the originator drugs that when they were launched. And so now, biosimilars is a space that offers us now, I'll say, the next chance or another chance to get within that. And so for us, we see biosimilar certainly as a potential upside and a big opportunity base for us.

And again, I think as not only with maybe I'll say, the competing companies, but even if you go back to then, the originators, they now need to compete with biosimilars. And so that means driving a new level of efficiency or other either speed or reduction in cost. And again, we feel like our products can help them in that as well if they're looking at a next generation to compete with biosimilars. So we think we're well positioned. Anything else on the biosimilar?

I mean, I think in terms of exposure, it's hard to say. The reality is if it's coming from a CDMO, they're not always telling us what molecule they're working on. I think if you look at kind of like the broader bioprocessing market, biosimilars are probably mid-single digits of that market. They're still relatively small versus the originators. That's probably the best proxy for our exposure, but it's hard to say.

I imagine there are big regional differences, though, between India and elsewhere?

Yes, I think that's probably a fair comment.

Okay. And then a number of these monoclonal antibody companies have been issuing press releases of late about investment intentions within different countries and borders. How are you doing at Repligen, that opportunity? Is it incremental for Repligen? Is it just substitution? Any high-level thoughts you can share?

Yes. And this is a big question, I think, on everybody's mind, especially with onshoring within the U.S. I think it starts with just the first question of, is there really incremental capacity? And you'll never -- we may never really know, did a pharma CDMO plan to invest in country A and now it's saying, okay, I'm going to shift that to the U.S.

What we do think is that, again, just back to that our 10 years young, that now is we have likely new investment in the U.S. Whether it's incremental or not to the system, it gives us another chance, another swing. We have -- we're well covered from our production within the U.S. So again, where other suppliers might need to import, that kind of defeats maybe some of the purpose on the onshoring, and we have the benefit of being able to produce most of what we can what we sell within the U.S. So that becomes an incremental opportunity for us.

I think what the people need to consider in their calculus on the consumables pull-through, again, if you've now added another line, unless your drug end use has gone up, that's going to stay the same and your consumables might be split across the multiple regions or lines. So I just think as, again, people do the calculus, even if you add your hardware, you don't get to use though, say, the same multiplier.

Are your folks in the field seeing initial planning happening for some of these facilities? And is it something you're actively participating in from a quote perspective or any other way?

So we've seen a lot of activity on RFPs kind of across the system. Some of those may be starting to lean into the onshoring. I think what it tells us, though, is that because we're being invited to a lot more RFPs, that when those onshoring discussions happen or as opportunities come, that we will likely be invited to the table as well. So I think that's still, I'll say, is yet to be seen if it's picking up for the onshoring in particular.

And then I think your timing wise, is if you end up with an RFP, maybe you see an order in '26, maybe that slips a little bit later, and then you're going to have revenue kind of the following maybe 9 to 12 months. So I think it's still going to be time before anybody is really seeing the volume pick up. But we're really encouraged that we are going to be invited to participate in this.

Maybe just one thing I'd add quickly there. I mean, I think the reason we're seeing some of these RFPs for previously planned capacity additions is we've really built out a capital equipment portfolio over the last 5 years with the downstream systems, mixers, ATF, et cetera. But then we also launched this key account strategy a couple of years ago, which I think was fortuitous timing, and it's focused on going after large pharma and large CDMOs and getting in with the key decision-makers at those accounts. And so when you put those two things together, that's why we're seeing kind of these RFPs for some of the capacity.

And just to lean on that, the breadth of the portfolio, again, I mean, we -- we do think that we're -- we outpunch our weight class when it comes to the offering across the workflow, right, compared to some of the other players. So that, again, gives a chance for those producers to be talking to us about a series of products.

And Fluid Management, again, is one as well that's helped even open some doors and both expanded some of the interest as well because now you can start connecting our systems across the workflow. And we're just, again, bringing alternatives to what's been maybe some of the same traditional players for a while.

Okay. And that's a good point, Jacob. So there's probably quite a bit of overlap between your key account strategy and the companies putting out the press releases on onshoring and such.

We don't comment on customers.

But to your point on fortuitous timing.

Yes.

How are you looking at the growth rate in China going forward?

Yes. So we feel like we've certainly bottomed out. We saw some growth in sales this quarter from order growth that we had last quarter. Now some of that, we do recognize likely were some, I'll say, timing related to some of the import duties and some of the trade discussions that have been going on.

So for us, China is about our, I'll say, how we're attacking and approaching 2026. And we've talked about it briefly that we really feel like there's a need to get more, I'll say, inherently within country and to be able to provide. So we're exploring our opportunities there. That, of course, takes time to develop and work through. And so that likely doesn't fall through to sales until either later in the year or into '27.

But we think, overall, the market is going to go in the right direction, and we'll be able to follow that, as well as with new leadership across our Asia Pac region, as well as new leadership within China and new, I'll say, a new heightened focus and resources that we'll be able to capture some of that. But for us, the real sea change becomes more of the '27 and beyond.

Okay. So a couple of years down the road?

Yes. With some, I think, again, converting -- changing from a headwind over the last probably 24 months and maybe still a bit more of a tailwind, but not, again, the type of growth that we think we can capture later on.

Sounds like 2027 is going to be a good year between the reshoring timing, China, et cetera. I'm trying to get you to provide 2027 guidance. Anyway. Joke.

No comment.

Moving on to a couple of company-specific questions. So your business mix looks quite a bit different than your peer set between clinical and commercial. I think you're about 2/3 clinical, 1/3 commercial today-ish. What does that look like in 5 years? And what are the implications for the business?

Yes, it's a great question. So we kind of snap that line once a year. And to your point, as we finished up '24 and we shared that in the beginning of '25, it was kind of a 2/3, 1/3. We've looked at it sort of, I'll say, initially, and we're -- absolutely, that needle is moving already in '25.

I don't know that I know exactly the number we get to, but we'll continue to move that. And I don't know that there's a reason why we wouldn't get to a similar mix that our peers have over time. I don't know if that's a 5-year window or longer, but -- it's a great -- but in the meantime, it remains a great, I'll say, growth opportunity for us as well, right, as we move along the clinical stages and as you get the pickup in the commercial side.

I think the other thing to keep in mind that's kind of broken a little bit of that paradigm is the ability to have our ATF products, in particular, be specced directly into commercial products, right? And so again, just with some of the changes in regulations from the FDA that happened a few years ago and a real focus on the ATF and perfusion and the opportunities that provides, we now find that a customer can -- within a year, if they push through, can have something that's been approved or that they've qualified.

And so again, that's why you hear us talking about the 50-plus -- well, it's commercial and late-stage programs that were specced into on the ATF side. We've talked about some of the blockbusters. So again, that -- my only point on that is it's different than -- oh, I started in the clinical and I worked my way up, and that's certainly been helping us to shift some of that mix as well.

Fluid Management is the other one, too, that we can get specced into in the existing commercial drug relatively quickly.

Okay. Well, that's a great segue into my next line of questioning, which is on ATF specifically. How are you thinking about the durability of the ATF growth trends?