QuidelOrtho Corp

Previous wording

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. These statements are any statement contained herein that is not strictly historical, including, but not limited to, certain statements under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including under “Outlook” and “Liquidity Outlook,” and statements located elsewhere herein regarding our commercial, integration and other strategic goals, our cost-savings initiatives, industry prospects, our expected results of operations or financial position, and future plans, objectives, strategies, expectations and intentions. Without limiting the foregoing, the words “may,” “will,” “could,” “would,” “should,” “might,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,” “continue,” “aim,” “strive,” “seek” or similar words, expressions or the negative of such terms or other comparable terminology are intended to identify forward-looking statements. Such statements are based on the beliefs and expectations of our management as of the date of this Quarterly Report and are subject to significant known and unknown risks and uncertainties. Actual results or outcomes may differ significantly from those set forth or implied in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth or implied in the forward-looking statements: fluctuations in demand for our non-respiratory and respiratory products; supply chain, production, logistics, distribution and labor disruptions and challenges; the challenges and costs of integrating, restructuring and achieving anticipated synergies as a result of the Combinations; and other macroeconomic, geopolitical, market, business, competitive and/or regulatory factors affecting our business generally, including those arising from the effects of announced or future or amended tariffs, trade policies and global trade relations, as well as those discussed under Part II, Item 1A, “Risk Factors” of this Quarterly Report and Part I, Item 1A, “Risk Factors” of our Annual Report. Investors should not rely on forward-looking statements as predictions of future events because these statements are based on assumptions that may not come true and are speculative by their nature. All forward-looking statements are based on information currently available to us and speak only as of the date of this Quarterly Report. We undertake no obligation to update any of the forward-looking information or time-sensitive information included in this Quarterly Report, whether as a result of new information, future events, changed expectations or otherwise, except as required by law.

Current wording

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. These statements are any statement contained herein that is not strictly historical, including, but not limited to, certain statements under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including under “Outlook” and “Liquidity Outlook,” and statements located elsewhere herein regarding our commercial, integration and other strategic goals, our cost-savings and operational improvement initiatives, industry prospects, our expected results of operations or financial position, and other future plans, objectives, strategies, expectations and intentions. Without limiting the foregoing, the words “may,” “will,” “could,” “would,” “should,” “might,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,” “continue,” “aim,” “strive,” “seek” or similar words, expressions or the negative of such terms or other comparable terminology are intended to identify forward-looking statements. Such statements are based on the beliefs and expectations of our management as of the date of this Quarterly Report and are subject to significant known and unknown risks and uncertainties. Actual results or outcomes may differ significantly from those set forth or implied in the forward-looking statements. The following factors, among others, could cause actual results or outcomes to differ from those set forth or implied in the forward-looking statements: fluctuations in demand for our non-respiratory and respiratory products; supply chain, production, logistics, distribution and labor disruptions and challenges; the challenges and costs of integrating, restructuring and achieving anticipated synergies as a result of the Combinations or other acquisitions; failure to exercise the option to acquire or complete the proposed acquisition of LEX Diagnostics on the anticipated timeline, or at all, including risks and uncertainties related to LEX Diagnostics’ ability to secure FDA clearance and satisfy other customary closing conditions and provisions; inability to realize the anticipated benefits of acquisitions, discontinuances of certain business operations (such as the Savanna Exit) or the Optimization Plan on our anticipated timelines, or at all; delays in the development of or failures or delays in the receipt of approvals for new or enhanced products; and other macroeconomic, geopolitical, market, business, competitive and/or regulatory factors affecting our business generally, including those arising from the effects of announced or future or amended tariffs, trade policies and global trade relations, as well as those discussed under Part II, Item 1A, “Risk Factors” of this Quarterly Report and Part I, Item 1A, “Risk Factors” of our Annual Report. Investors shoul…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We manage our business geographically to better align with the market dynamics of the specific geographic regions in which we operate, with our reportable segments being North America, EMEA and China. Latin America and JPAC are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue in the following business units: Labs, Transfusion Medicine (Immunohematology and Donor Screening product categories), Point of Care and Molecular Diagnostics. We also generate non-core revenue, including through our contract manufacturing business and certain business collaborations, which accounted for $33.4 million and $31.0 million for the three months ended March 30, 2025 and March 31, 2024, respectively.

Current wording

We manage our business geographically to better align with the market dynamics of the specific geographic regions in which we operate, with our reportable segments being North America, EMEA and China. Latin America and JPAC are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue in the following business units: Labs, Transfusion Medicine (Immunohematology and Donor Screening product categories), Point of Care and Molecular Diagnostics. We also generate non-core revenue, including through our contract manufacturing business and certain business collaborations, which accounted for $59.8 million and $51.0 million for the six months ended June 29, 2025 and June 30, 2024, respectively.

Previous wording

For the three months ended March 30, 2025, Total revenues decreased by 3% to $692.8 million as compared to the same period in the prior year. This decrease was primarily driven by variability of our U.S. respiratory products, mainly due to a decrease in COVID-19 revenues, partially offset by an increase in flu revenues. Currency exchange rates had an unfavorable impact of 150 basis points on our growth rate. Our revenues can be highly concentrated over a small number of products, including certain of our respiratory products. For the three months ended March 30, 2025 and March 31, 2024, revenues related to our respiratory products accounted for 17% and 19% of our Total revenues, respectively. The respiratory product revenue included $23.4 million and $50.2 million revenue related to COVID-19 for the three months ended March 30, 2025 and March 31, 2024, respectively.

Current wording

For the six months ended June 29, 2025, Total revenues decreased by 3% to $1,306.7 million as compared to the same period in the prior year. This decrease was primarily driven by variability of our U.S. respiratory products, mainly due to a decrease in COVID-19 revenues, partially offset by an increase in flu revenues. Currency exchange rates had an unfavorable impact of 70 basis points on our growth rate. Our revenues can be highly concentrated over a small number of products, including certain of our respiratory products. For the six months ended June 29, 2025 and June 30, 2024, revenues related to our respiratory products accounted for 13% and 14% of our Total revenues, respectively. The respiratory product revenue included $32.9 million and $69.1 million revenue related to COVID-19 for the six months ended June 29, 2025 and June 30, 2024, respectively.

Previous wording

In February 2024, we initiated a wind-down plan to transition out of the U.S. donor screening portfolio. Specifically, we plan to wind-down only the ORTHO VERSEIA® Integrated Processor platform and microplate assays, which are only sold in the U.S. and have a lower growth and margin profile. This wind-down will not affect any donor screening portfolio outside of the U.S. While our goal is to wind-down this U.S. donor screening portfolio, we will continue to support our existing customers and honor our contractual commitments. The winding down of the U.S. donor screening portfolio, as compared to the prior year periods, contributed to the decline in revenue with a margin lower than our overall margin. Refer to Item 1, “Financial Statements—Note 3. Revenue” for more information. The wind-down of our U.S. donor screening portfolio is expected to be substantially complete by the end of 2025.

Current wording

In February 2024, we initiated a wind-down plan to transition out of the U.S. donor screening portfolio. Specifically, we plan to wind-down only the ORTHO VERSEIA® Integrated Processor platform and microplate assays, which are only sold in the U.S. and have a lower growth and margin profile. This wind-down will not affect any donor screening portfolio outside of the U.S. While our goal is to wind-down this U.S. donor screening portfolio, we will continue to support our existing customers and honor our contractual commitments. The winding down of the U.S. donor screening portfolio, as compared to the prior year periods, contributed to the decline in revenue with a margin lower than our overall margin. Refer to Item 1, “Financial Statements—Note 3. Revenue” for more information. The wind-down of our U.S. donor screening portfolio is expected to be substantially complete by the first half of 2026.

Previous wording

In recent months, the United States has announced tariffs on imports from most countries, including significant tariffs on imports from U.K., Canada, Mexico and China, leading to increasing trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. These actions and the related rising political tensions could negatively impact global macroeconomic conditions and the stability of global financial markets, which could have a material adverse effect on our business, financial condition and results of operations, including through increased supply chain costs. There is substantial uncertainty about the duration of existing tariffs or pauses in tariffs, tariff levels and whether additional tariffs or other retaliatory actions may be imposed, modified or suspended. We continue to closely monitor these events as they unfold and assess their potential impact on our operations to inform our response strategy.

Current wording

In April 2025, the U.S. announced tariffs on imports from most countries, including significant tariffs on imports from U.K., Canada, Mexico and China, leading to increasing trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. These actions and the related rising political tensions could negatively impact global macroeconomic conditions and the stability of global financial markets, which could have a material adverse effect on our business, financial condition and results of operations, including through increased supply chain costs. While trade negotiations are ongoing and certain bilateral trade deals have been announced, there remains substantial uncertainty about the duration of existing tariffs or pauses in tariffs, tariff levels and whether additional tariffs or retaliatory actions may be imposed, modified or suspended. We continue to closely monitor these events as they unfold and assess their potential impact on our operations to inform our response strategy.

Previous wording

The following table compares Total revenues by business unit for the three months ended March 30, 2025 and March 31, 2024:

Current wording

The following table compares Total revenues by business unit for the three and six months ended June 29, 2025 and June 30, 2024:

Previous wording

For the three months ended March 30, 2025, Total revenues decreased to $692.8 million from $711.0 million for the same period in the prior year. Labs revenue increased 5% compared to the prior year period, primarily due to growth in reagents, consumables and services, partially offset by a decline in instrument revenue. Immunohematology revenue increased 1% compared to the prior year period, primarily due to reagent growth. Donor Screening revenue decreased 62% compared to the prior year period, primarily due to the wind-down of the U.S. donor screening business. The Point of Care business unit contributed to revenue decline, driven by a decrease of $15.8 million, or 37% in sales of QuickVue SARS Antigen assays. Molecular Diagnostics revenue increased 6% compared to the prior year period, driven by higher Savanna revenue. Currency exchange rates had an unfavorable impact of 150 basis points on our growth rate for the three months ended March 30, 2025.

Current wording

For the six months ended June 29, 2025, Total revenues decreased to $1,306.7 million from $1,348.0 million for the same period in the prior year. Labs revenue increased 4% compared to the prior year period, primarily due to growth in reagents, consumables and services, partially offset by a decline in instrument revenue. Immunohematology revenue increased 3% compared to the prior year period, primarily due to reagent growth. Donor Screening revenue decreased 61% compared to the prior year period, primarily due to the wind-down of the U.S. donor screening business. The Point of Care business unit contributed to revenue decline, driven by a decrease of $29.8 million, or 16% in sales of QuickVue SARS and Sofia SARS Antigen assays. Molecular Diagnostics revenue increased 14% compared to the prior year period, driven by higher Savanna revenue. Currency exchange rates had an unfavorable impact of 70 basis points on our growth rate for the six months ended June 29, 2025.

Previous wording

Cost of sales, excluding amortization of intangible assets, decreased to $349.5 million, or 50.4% of Total revenues, for the three months ended March 30, 2025, compared to $378.9 million, or 53.3% of Total revenues, for the three months ended March 31, 2024. The decrease in cost of sales, excluding amortization of intangible assets, was driven primarily by procurement-related cost-savings initiatives actioned in 2024.

Current wording

Cost of sales, excluding amortization of intangible assets, decreased to $339.0 million, or 55.2% of Total revenues, for the three months ended June 29, 2025, compared to $361.0 million, or 56.7% of Total revenues, for the three months ended June 30, 2024. The decrease in cost of sales, excluding amortization of intangible assets, was driven primarily by procurement-related cost-savings initiatives actioned in 2024.

Previous wording

The following table summarizes operating expenses for the three months ended March 30, 2025 and March 31, 2024:

Current wording

The following table summarizes operating expenses for the three and six months ended June 29, 2025 and June 30, 2024:

Previous wording

Research and development expense for the three months ended March 30, 2025 decreased by $6.0 million, or 10.1%, to $53.2 million from $59.2 million for the same period in the prior year, primarily due to compensation costs related to cost-savings initiatives actioned in 2024.

Current wording

Research and development expense for the three months ended June 29, 2025 decreased by $10.6 million, or 18.8%, to $45.7 million from $56.3 million for the same period in the prior year, primarily due to cost-savings initiatives actioned in 2024.

Previous wording

We recognized a non-cash goodwill impairment charge of $1.7 billion for the three months ended March 31, 2024.

Current wording

We recognized a non-cash goodwill impairment charge of $1.7 billion for the six months ended June 30, 2024.

Previous wording

Other operating expenses were $6.4 million and $8.0 million for the three months ended March 30, 2025 and March 31, 2024, respectively. Other operating expenses were primarily related to the profit share expense for our Joint Business.

Current wording

Other operating expenses were $5.1 million and $11.5 million for the three and six months ended June 29, 2025, respectively, and $9.3 million and $17.3 million for the three and six months ended June 30, 2024, respectively. Other operating expenses were primarily related to the profit share expense for our Joint Business.

Previous wording

Interest expense, net was $40.0 million and $39.0 million for the three months ended March 30, 2025 and March 31, 2024, respectively. Refer to Item 1, “Financial Statements—Note 7. Borrowings” for more information.

Current wording

Interest expense, net was $40.5 million and $80.5 million for the three and six months ended June 29, 2025, respectively, and $41.0 million and $80.0 million for the three and six months ended June 30, 2024, respectively. Refer to Item 1, “Financial Statements—Note 7. Borrowings” for more information.

Previous wording

For the three months ended March 30, 2025, we recognized a provision for income taxes of $3.9 million in relation to loss before income taxes of $8.8 million, resulting in a negative effective tax rate of 44.3%. For the three months ended March 31, 2024, we recognized an income tax benefit of $92.9 million in relation to loss before income taxes of $1,798.9 million, resulting in an effective tax rate of 5.2%. For the three months ended March 30, 2025, the effective tax rate differed from the U.S. federal statutory rate primarily due to the impacts of operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances. For the three months ended March 31, 2024, the effective tax rate differed from the U.S. federal statutory rate primarily due to goodwill impairment charges that were nondeductible for tax purposes.

Current wording

For the six months ended June 29, 2025, we recognized a provision for income taxes of $29.7 million in relation to loss before income taxes of $238.4 million, resulting in a negative effective tax rate of 12.5%. For the six months ended June 30, 2024, we recognized an income tax benefit of $108.1 million in relation to loss before income taxes of $1,961.8 million, resulting in an effective tax rate of 5.5%. For the six months ended June 29, 2025, the effective tax rate differed from the U.S. federal statutory rate primarily due to the impacts of operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances. For the six months ended June 30, 2024, the effective tax rate differed from the U.S. federal statutory rate primarily due to goodwill impairment charges that were nondeductible for tax purposes.

Previous wording

Adjusted EBITDA was $234.3 million for the three months ended March 30, 2025, compared to $236.6 million for the three months ended March 31, 2024. The decrease was primarily driven by decreases in revenue due to the wind-down of the U.S. donor screening business and sales of QuickVue SARS Antigen assays, partially offset by an increase in Labs revenues and lower operating expenses due to cost-savings initiatives.

Current wording

Adjusted EBITDA was $159.7 million for the three months ended June 29, 2025, compared to $185.6 million for the three months ended June 30, 2024. The decrease was primarily driven by decreases in revenue due to the wind-down of the U.S. donor screening business and decreases in sales of QuickVue and Sofia SARS Antigen assays, partially offset by lower operating expenses due to cost-savings initiatives and an increase in Labs revenues.

Previous wording

Total revenues were $75.0 million for the three months ended March 30, 2025, compared to $76.1 million for the three months ended March 31, 2024, driven by a decrease in Point of Care revenues, partially offset by an increases in Labs and Donor Screening revenues.

Current wording

Total revenues were $158.4 million for the six months ended June 29, 2025, compared to $157.7 million for the six months ended June 30, 2024, driven by an increase of 5% in Labs revenues, partially offset by a decrease in Point of Care revenues.

Previous wording

Adjusted EBITDA was $29.3 million for the three months ended March 30, 2025, compared to $26.1 million for the three months ended March 31, 2024. The increase was primarily driven by the impact from changes in product mix and higher Labs revenues.

Current wording

Adjusted EBITDA was $42.1 million for the three months ended June 29, 2025, compared to $35.7 million for the three months ended June 30, 2024. The increase was primarily driven by the impact from changes in product mix and higher Labs revenues.

Previous wording

As of March 30, 2025, we had $127.1 million in Cash and cash equivalents, a $28.8 million increase from December 29, 2024. Our cash requirements fluctuate as a result of numerous factors, including cash generated from operations, progress in R&D, capital expansion projects and acquisition and business development activities. We believe our organizational structure allows us the necessary flexibility to move funds throughout our subsidiaries to meet our operational working capital needs.

Current wording

As of June 29, 2025, we had $151.7 million in Cash and cash equivalents, a $53.4 million increase from December 29, 2024. Our cash requirements fluctuate as a result of numerous factors, including cash generated from operations, progress in R&D, capital expansion projects and acquisition, restructuring and business development activities. We believe our organizational structure allows us the necessary flexibility to move funds throughout our subsidiaries to meet our operational working capital needs.

Previous wording

Our Credit Agreement consists of a $2,750.0 million Term Loan and an $800.0 million Revolving Credit Facility. Availability under the Revolving Credit Facility, after deducting letters of credit of $12.7 million and $250.0 million borrowings outstanding, was $537.3 million as of March 30, 2025.

Current wording

Our Credit Agreement consists of a $2,750.0 million Term Loan and an $800.0 million Revolving Credit Facility. Availability under the Revolving Credit Facility, after deducting letters of credit of $12.7 million and $390.0 million borrowings outstanding, was $397.3 million as of June 29, 2025.

Previous wording

Capital expenditures, including investments, were $56.2 million for the three months ended March 30, 2025. We continue to make capital expenditures in connection with the expansion of our manufacturing capabilities and other facility-related activities.

Current wording

Capital expenditures, including investments, were $87.2 million for the six months ended June 29, 2025. We continue to make capital expenditures in connection with the expansion of our manufacturing capabilities and other facility-related activities.

Previous wording

Cash provided by operating activities was $65.6 million for the three months ended March 30, 2025 and reflected a net loss of $12.7 million and non-cash adjustments of $123.7 million, primarily associated with depreciation and amortization and stock-based compensation expense, partially offset by $53.1 million in cash outflows for inventories.

Current wording

Cash provided by operating activities was $18.8 million for the six months ended June 29, 2025 and reflected a net loss of $268.1 million and non-cash adjustments of $407.0 million, primarily associated with depreciation and amortization, asset write off related to restructuring, integration and other charges, and stock-based compensation expense, partially offset by $102.6 million in cash outflows for inventories.

Previous wording

Cash used for investing activities of $56.2 million for the three months ended March 30, 2025 was related to purchases of property, plant, equipment, investments and intangibles.

Current wording

Cash used for investing activities of $89.2 million for the six months ended June 29, 2025 was primarily related to purchases of property, plant, equipment, investments and intangibles.

Previous wording

Cash provided by financing activities was $17.6 million for the three months ended March 30, 2025 and was primarily related to net proceeds from the Revolving Credit Facility of $52.0 million, partially offset by payments on long-term borrowings of $36.0 million.

Current wording

Cash provided by financing activities was $120.9 million for the six months ended June 29, 2025 and was primarily related to net proceeds from the Revolving Credit Facility of $192.0 million, partially offset by payments on long-term borrowings of $72.0 million.

Previous wording

Cash used for operating activities was $0.7 million for the three months ended March 31, 2024 and reflected a net loss of $1,706.0 million and non-cash adjustments of $1,791.6 million, primarily associated with a goodwill impairment charge and change in deferred tax assets and liabilities as well as depreciation and amortization and stock-based compensation expense. We benefited from collections on accounts receivables, which contributed cash inflows of $26.4 million, offset by other changes in working capital, including $37.7 million cash outflows for inventories.

Current wording

Cash used for operating activities was $98.6 million for the six months ended June 30, 2024 and reflected a net loss of $1,853.7 million and non-cash adjustments of $1,971.1 million, primarily associated with a goodwill impairment charge and change in deferred tax assets and liabilities as well as depreciation and amortization, asset impairment charge and stock-based compensation expense. We benefited from collections on accounts receivables, which contributed cash inflows of $24.2 million, offset by other changes in working capital, including $95.2 million cash outflows for inventories.

Previous wording

Cash used for investing activities was $20.2 million for the three months ended March 31, 2024 and was primarily related to $66.1 million in purchases of property, plant, equipment, investments and intangibles. We also sold $63.1 million of marketable securities.

Current wording

Cash used for investing activities was $55.5 million for the six months ended June 30, 2024 and was primarily related to $101.4 million in purchases of property, plant, equipment, investments and intangibles. We also sold $63.1 million of marketable securities.

Previous wording

Cash used for financing activities was $18.5 million for the three months ended March 31, 2024 and was primarily related to payments on long-term borrowings of $51.9 million and net proceeds from the Revolving Credit Facility of $40.0 million.

Current wording

Cash provided by financing activities was $144.0 million for the six months ended June 30, 2024 and was primarily related to net proceeds from the Revolving Credit Facility of $253.0 million, partially offset by payments on long-term borrowings of $103.7 million.

Previous wording

There have been no accounting pronouncements issued or adopted during the three months ended March 30, 2025 that are expected to have a material impact on the Company’s financial statements.

Current wording

There have been no accounting pronouncements issued or adopted during the six months ended June 29, 2025 that are expected to have a material impact on the Company’s financial statements.

Previous wording

A comprehensive discussion of our critical accounting estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. There have been no significant changes to our critical accounting policies and estimates during the three months ended March 30, 2025.

Current wording

A comprehensive discussion of our critical accounting estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. There have been no significant changes to our critical accounting policies and estimates during the six months ended June 29, 2025.