Repligen Corporation (RGEN) Q3 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to Repligen's Third Quarter 2026 Earnings Conference Call. My name is Jillian, and I will be your operator. Following management's prepared remarks, we will open the call for questions. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. To provide an opportunity for as many participants as possible, we ask that callers limit themselves to 1 question. I will now turn the call over to Jacob K. Johnson, Vice President of Investor Relations for Repligen. Jacob, Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Repligen's 2026 third quarter earnings call. Joining me today are President and Chief Executive Officer Olivier Loeillot, and Chief Financial Officer Jason Garland. Earlier this morning, we issued our earnings release and supplemental presentation, which are available on the Investor Relations section of our website. Before we begin, please note that today's discussion will include forward-looking statements and certain non-GAAP financial measures. Actual results may differ materially from those expressed or implied by these statements. Due to risks and uncertainties described in today's earnings release and our SEC filings. Reconciliations of non-GAAP to GAAP measures are included in today's earnings release and supplemental materials. 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 will turn the call over to Olivier Loeillot.

Thank you, Jacob. Good morning, everyone, and welcome to our 2026 third quarter call. We had a record quarter with $209 million of revenue. This is a significant milestone as we surpassed our prior peak in the second quarter of 2022. We believe this is another proof point that the industry is poised for its next phase of growth. It also highlights the benefits of our diversified portfolio and this was driven in part by proteins and chromatography. In addition, we were delighted to close the acquisition of BioLife earlier this month. This combination further expands our capabilities in the rapidly growing cell therapy end market, and strengthens our long term growth platform. We will discuss our initial observations and integration efforts in a moment. But first, we delivered $209 million of revenue in the third quarter, which represented 12.5% organic growth while expanding adjusted operating margins by a 170 basis points compared to the prior year. This was an excellent result as we were lapping a very strong quarter in the prior year. Our ability to outpace market growth very significantly this quarter is a testament to our team's strong execution in a market that is still recovering. Following these strong results, incorporating the BioLife acquisition, we are increasing our full year 2026 guidance. Jason will provide more details. Our updated 2026 guidance includes an expected $24 million revenue contribution from BioLife for the period following its close in our fourth quarter. This assumes BioLife annual 2026 revenue on a pro forma basis will be approximately $114 million, above the midpoint of BioLife's most recent guidance. The business is performing well, and we are very confident about delivering our deal model for 2027 and beyond. With the recent acquisition and ongoing integration, we are taking a prudent approach to our initial assumptions for the remainder of 2026. We are narrowing our organic growth outlook to 12% to 13%. At the midpoint, this represents a 50-basis-point increase and assumes fourth quarter growth is within the full year range. This also means we will deliver a gain on our full year commitments and outpacing markets significantly. As I reflect on our end markets, remain encouraged by the continued improvement in the bioprocessing industry. Importantly, our funnel and order activity continue to strengthen. This is particularly true for capital equipment. Capital equipment orders increased mid-teens year-over-year and was the highest orders quarter in 5 years while revenue declined. The tap has not opened as quickly as we would have expected this year, However, we continue to see encouraging signs in our funnel and order book. We are building a backlog for 2027, and we will enter next year in a better position than we did in 2026. As a result, we remain encouraged that we are seeing a gradual improvement in capital equipment demand with a notable pickup in orders for our systems. We are actively executing initiatives that will strengthen our equipment business and prepare us for the next phase of growth. This includes continued investment in innovation, as well as strategic efforts designed to deepen customer engagement and support large scale manufacturing expansion projects. 1 example is our integrated solution team which is focused on addressing customer capacity expansion, such as on-shoring. Consumable demand remained outstanding with 20% growth in the quarter. While services was even stronger, with greater than 20% growth. Our services team continued to execute extremely well. Year to date, our services team has increased the number of systems under contract by nearly 40% despite a muted capital equipment revenue environment. In addition to the incremental service revenue, this allows us to be closer to our customers and provide further insight into their needs. Services represented 7% of our revenue in the quarter, and we expect it to become a larger mix of our business going forward. In short, our base business remains strong, as highlighted by our 12.5% organic growth in the third quarter. Our funnel and orders suggest a continued improvement in the end market. In addition, we continue to execute our innovation strategy to drive above market growth. Moving to our performance by end market, biopharma revenue drove growth while CDMOs declined on a difficult comparison. Year to date, we have seen similar trends for both customer bases. Biopharma growth was strong in all regions, as Europe returned to growth on a more favorable comparison while year to date, biopharma growth has been driven by strength in North America and Asia Pacific. Emerging biotech grew mid-single digits on a difficult comparison from last year. Demand trends remain healthy, as year to date emerging biotech revenue has increased in the high-teens. New modalities were relatively flat, but grew high-single-digits, including the impact of a certain gene therapy platform. This was led by nearly 30% growth in cell therapy. In addition, gene therapy demand grew on an absolute basis and also 25% excluding that gene therapy headwind. We continue to believe new modalities will be accretive to our medium term outlook, and we are excited to expand our capabilities with the addition of BioLife. Moving to our strategy update, wanted to share some initial observations on our first few weeks of ownership of BioLife. I will leave you with the most important takeaway first. We are even more excited about the strategic rationale of bringing our organizations together and the value we will create for patients, customers, and shareholders. Jason and I were fortunate to spend time with our team at BioLife sites. I recently joined the BioLife team again in both Boston and Indianapolis, to celebrate the closing. We walked away impressed by our shared culture of innovation and customer centricity. We are thrilled to expand our offerings for the cell therapy market. Customer feedback has been very encouraging, and we have received a number of positive responses after the acquisition. After months of thoughtful planning, our combined teams are now focused on executing the integration plan and realizing the opportunities we identified ahead of closing. In fact, our teams are hosting integration workshops in Waltham as we speak. We have already completed actions to deliver a sizable portion of our operating expense synergies. This includes capturing public company and certain leadership costs, which represent more than half of our anticipated Year 1 synergies. As it relates to cost of goods sold, our team is already hard at work evaluating potential options to improve CryoStorm scrap rates. Finally, our commercial teams are now collaborating to achieve revenue synergies. We recently cross trained both commercial teams. We continue to believe our offerings will benefit from BioLife's trusted customer relationships. In addition, our Asia Pacific team has begun to explore the opportunities to increase awareness of CryoStor in the region, particularly in China. As we look ahead to 2027, we remain focused on outpacing market growth. Assuming the market is growing high-single-digits, and with the accretion of BioLife, we are positioned to grow our reported top line at least 25% next year, absence a material change in foreign exchange rates. This will result in our revenue exceeding $1 billion which represents another significant milestone for our company. Additionally, I wanted to spend some time on our Asia strategy. As Jason will discuss in more detail, we had another very strong quarter in China, with greater than 40% growth. In China, we are advancing several strategic initiatives to strengthen our position in the market, including ongoing technology transfer with our OEM partner as we work to recapture share. Notably, China recently published its latest 5-year biotech plan. The government expects the industry to grow at over 20% CAGR through 2030. This speaks to the growing activity in this country, and we remain convinced China will be the fastest growing biopharmaceutical market in coming years. Beyond China, there are significant growth opportunities in the broader Asia Pacific region. Last week we opened a new training and innovation center in South Korea. This underscores our commitment to a strategically important market that has become 1 of the world's leading hubs for biologics and CDMO manufacturing. Before I turn the call over to Jason, I will provide some more detail on our franchise level performance. I will note that all references to our 2026 expectations are on a reported basis. Starting with filtration. As expected, the previously disclosed ACF headwind was most pronounced in the third quarter, and resulted in an 11% decline in filtration revenues. I note this includes a 2-point headwind from our Polymem divestment and foreign currency. So the decline was slightly greater than we expected. This was largely timing related with most of our systems order plan for delivery in 2027 per customer request. We are encouraged by the hardware backlog we are building for next year. We now expect filtration to be flat to slightly down for the year. This includes the inorganic impact from the sale of PolyMem. Turning to chromatography. Revenue grew over 50%, with some help from a favorable comparison in the prior year. This was again driven by growth in Opus columns, with continued growth from CDMO and biopharma customers. In particular, we continue to see significant traction with large scale columns. now expect chromatography growth of at least 30% for the full year. We had another great quarter in proteins, with more than 40% growth, again driven by strength across our portfolio, including positive traction in ligands, growth factors, and our custom and catalog resins. We are also pleased to share we recently extended our supply agreement with Ecolab and are excited about our continued partnership. Our protein strategy is working marvelously and we continue to expect mid-teens growth for the full year. Our analytics franchise had another record quarter, with 20% growth, a strong outcome given we faced our most difficult prior year comparison. The growth was driven by a robust demand in consumables and services, while capital equipment remained healthy. Our downstream protein concentration offerings were recently recognized in the USP chapter 507 standard. These are widely accepted quality standards used by biopharma manufacturers and regulators. This is a significant milestone that provides external validation of the technology and strengthen our credibility with biopharma customers. From a commercial standpoint, this recognition should help us reduce barriers to adoption, support broader development of SoloVPE PLUS across products and sites, and strengthens the longer term opportunity for FlowVPX as customers adopt the technology more broadly. In addition, we have seen traction recently with our PAT-enabled systems, which further expands the FlowVPX opportunity. As the industry continues its journey towards AI and digitization, we have engaged with several key customers who are sharing their AI enabled process development and manufacturing strategies. This highlights the growing importance of our advanced PAT and digital twin capabilities. Given momentum in downstream demand, and a growing contribution from our upstream analytics, we now expect analytics growth of at least 30%. Before I hand the call over to Jason, I wanted to reiterate how proud we are of our Q3 results as we outpace industry growth again and how excited we are about the growth opportunities in front of us. This is especially true as we add BioLife cell therapy capabilities to our portfolio. The progress we are making in delivering our strategy is increasingly reflected in our results. This is a testament to our team's strong execution and hard work. We have several initiatives underway to drive future growth including our integrated solution team and Asia Pacific strategy. Combined with our Fit for Growth investments and transformation office, these efforts are helping us build the capabilities and discipline needed to deliver profitable growth. Now I will turn the call over to Jason for the financial highlights.

Thank you, Olivier Loeillot. Good morning, everyone. Today, we are happy to share another strong quarterly results in Q3. These results, from our continued execution, coupled with the strategic acquisition of BioLife, allow us to increase our guidance once again. I look forward to sharing the details shortly. Before we discuss the quarter, let me highlight that unless otherwise noted, all financial measures discussed reflect adjusted non GAAP measures. As shared in our press release, we delivered strong third quarter revenue of $209 million This is reported year over year growth of 11% or 12.5% growth on an organic basis. Which excludes the impact of acquisitions, divestitures, and foreign exchange. The previously announced sale of PolyMem was slightly under a 1-point headwind to reported growth, and foreign currency was also just under a 1-point headwind as the dollar has strengthened. And for clarity, we recognize de minimis tariff refunds in the quarter. As Olivier provided details on our product franchise performance, I will now share more color on our regional performance. Starting with quarterly revenue mix, North America represented approximately 49% of our total, EMEA represented 34%. And Asia Pacific and the rest of the world represented approximately 17%. North America grew 6% driven by strength in proteins and analytics. While lapping our strongest quarter in the prior year. EMEA grew over 20% on broad based strength and a favorable comparison. And Asia Pacific declined slightly on a tough comparison with record sales in the third quarter of 25. We continue to deliver on our strategic priority of Asia Pacific growth, with third quarter orders breaking our prior record. Asia Pacific demand remains very healthy with high-teens growth year to date. China demand was again robust, with greater than 40% revenue growth in the quarter and strong orders. Year to date, China sales have grown greater than 50%. Transitioning to profit and margins, Despite the anticipated mix headwind, we had strong margin performance in the third quarter. Adjusted gross profit was $111 million and adjusted gross margin was 53%. This is a 30-basis-point decline versus last year, and consistent with our expectation that the third quarter would represent the low point for gross margin in 2026. Volume leverage and price execution were positive drivers of margin expansion, but were more than offset by product mix and inflation. Tariffs had a de minimis impact on margin, and year to date gross margin has increased 140-basis-point versus last year. Continuing through the P&L, our adjusted income from operations was $33 million in the third quarter, up 24% year-over-year. This translated to an adjusted operating margin of 15.9%. Which was an increase of 170-basis-point year over year. Adjusted EBITDA was $44 million in the quarter, or 20.9% adjusted EBITDA margin. Underlying our margin expansion in the quarter was strong leverage, achieved with a modest adjusted OpEx growth of 5%. Given recent trends, we plan to make some investments through the end of this year to support our expected growth in 2027. We will remain thoughtful about balancing investments in the business and expanding margins. I would note our GAAP results include a $41 million intangible asset impairment related to an intellectual property license agreement that was signed many years ago that unfortunately did not lead to a positive outcome. As an unusual noncash and onetime event, the impact of this charge is not included in our adjusted results. Moving to the bottom line, adjusted net income was $30 million, a 16% year over year increase. Our third quarter adjusted effective tax rate was 25% due to the timing of a specific item in the quarter that we do not expect to repeat. Our full year outlook is unchanged at approximately 22%. Adjusted fully diluted earnings per share for the third quarter was $0.53 compared to $0.46 in the same period in 2025 or an increase of 15%. We continue to see strong earnings conversion from our robust revenue growth. Finally, our cash, cash equivalents, and marketable securities position at the end of the third quarter was $863 million, up $53 million sequentially from the second quarter. This was driven by strong cash flow from operations primarily offset by $5 million of CapEx in the quarter. In October, we deployed approximately $550 million of cash, including fees, and net of cash received for the BioLife transaction. As a result, our pro forma cash balance is currently greater than $300 million. I will now outline the improved outlook in our adjusted financial guidance. For clarity, our guidance includes the contribution of BioLife for the period following the closing of the acquisition on October 6. As Olivier mentioned, given the momentum of our underlying business, and with the partial quarter contribution from BioLife, we are increasing our guidance. We are now guiding to $844 million to $852 million of revenue, or $848 million at the midpoint. This represents 14.5% to 15.5% reported growth or 12% to 13% organic. This is an increase of 50 basis points at the midpoint versus our prior organic growth guidance. This assumes approximately $24 million of revenue from BioLife. This is offset by approximately 1-point of headwind from the sale of our PolyMem operations we announced earlier this year. In addition, we now assume neutral foreign currency, which had been a tailwind in our prior guidance. Our reported growth of 14.5% to 15.5% assumes the following across our franchises. Filtration is expected to be flat to slightly down. Chromatography will grow greater than 30%, We expect proteins to grow mid-teens. Analytics is expected to achieve more than 30% growth And as I previously mentioned, we expect $24 million from a partial quarter contribution from BioLife. We will initially share BioLife revenue as a separate franchise, though over time, we may evaluate our overall franchise reporting structure. We continue to expect 110- to 160-basis-points of gross margin expansion for the year. So with BioLife, we will likely be above the midpoint of this range. We are raising our adjusted operating income guidance to a range of $135 to $139 million and our adjusted operating margin guidance to 16% to 16.3%. This represents 22 to 52 basis points of operating margin expansion. Our updated guidance reflects our strong year to date performance and includes BioLife, which is accretive to our operating margin. We are extremely pleased with our margin performance this year, Our disciplined cost control and strong execution have allowed us to outperform our initial expectations. As I mentioned previously, we do expect to make investments in the fourth quarter and into 2027 to support future growth. Moving to the income statement. Our guidance assumes $18 million of adjusted other income. This reflects favorable interest income trends due to rising rates, offset by the cash deployed for the BioLife acquisition. This will reduce interest income to approximately $1.5 million in the fourth quarter. As mentioned earlier, we continue to assume an adjusted tax rate of approximately 22%. Putting this together, we expect adjusted fully diluted earnings per share to be between $2.05 and $2.09. This is up $0.34 to $0.38 versus 2025 or up 21% at the midpoint. The midpoint reflects a $0.01 increase from our prior guidance. This assumes BioLife is slightly dilutive to earnings given we will recognize nearly a full quarter of expenses but a less proportionate amount of revenue from BioLife in the quarter. As Olivier mentioned, we have already completed actions to deliver a sizable portion of our operating expense synergies. As a result, we are well positioned to deliver on at least $0.05 of Year 1 accretion in 2027. We expect CapEx spend to continue to be approximately 3% to 4% of 2026 revenue. For additional context, at the midpoint, our guidance assumes fourth quarter organic growth is in the range of our updated full year outlook. We also expect fourth quarter gross margin to be within our full year guidance. We expect operating expenses to be up low-double-digits million sequentially, as we plan to make some investments in our base business. And it will include a contribution of nearly a full quarter of BioLife operating expenses. Before I close, I want to touch on our medium term margin outlook. And also provide an update on our strategic IT investments and AI efforts. First, on margins. We have outlined a path to 30% EBITDA by 2030. We are not formally updating these targets. But as we have mentioned previously, BioLife will be accretive to our growth and margins. With BioLife, we believe we could achieve this milestone earlier. This gives us the opportunity to explore reinvesting some of this benefit in areas that accelerate revenue growth instead of achieving this target sooner. Potential investments include additional commercial resources and R&D innovation spending. As evidenced by our year to date performance, we are committed to margin expansion and have made good progress towards our goals this year. We continue to see opportunities from volume leverage, productivity, and net pricing. We will balance this with the investments required to support and drive future growth. 1 area we have invested in this year is strengthening our IT organization and modernizing our capabilities. We have world class tools and have onboarded key talent this year including a new CIO. Our team is focused on optimizing our data infrastructure as the foundation for more broad based internal AI deployment. We have made considerable progress on these efforts, including AI pilots, which are showing tangible results. We plan to leverage these initial learnings more broadly in our organization. In addition, we have launched regular training to empower our employees in their use of AI tools. Finally, our operations team is working to drive productivity at our manufacturing sites through increased investments in automation. We are excited about the extensive list of opportunities ahead of us. As we wrap up the call, Olivier and I would like to thank our global Repligen team for another quarter of strong execution. Our record results increased guidance, progress in the BioLife integration, and continued investments in innovation and growth are all reflections of the team's hard work and commitment. We believe we are well positioned to continue outpacing the market and creating long term value for our customers and shareholders. With that, I will turn the call back to the operator and open the lines for questions.

We will now begin the question and answer session. Please limit yourself to 1 question. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Brendan Smith with TD Cowen. Brendan, your line is open. Please go ahead.

Great. Thanks for taking the questions, guys. Maybe I wanted to ask 1 on kind of this combined Repligen BioLife outlook. I guess how should we think about maybe the cadence of integration benefits here and really where you see the most potential maybe for immediate or near term upside versus some other aspects that will likely take a bit more time. And, I guess, how much of your vision for this integration is really contingent upon any reacceleration of cell therapies broadly, or do you kind of see the current state of that space enough to drive growth there kind of heading into next year? Just any color on your kind of underlying assumptions there would be great. Thanks.

Hey. Good morning, Brendan, and thanks for the question. Yeah. So as far as the first part of the question is concerned, I mean, we have already completed action to deliver a sizable portion of our operating expense synergies. As we mentioned earlier, this really includes capturing some of the public company and certain leadership costs. But also, we are working on longer-term type of action, which is the bag opportunity. And as you know, they had a pretty high scrap rate, and we are working on it with them to improve that. And that is a little bit more in the, what I call mid- to long-term type of action here. As far as the cell therapy market is concerned, I think we mentioned in July when we signed the deal, like, we. We have made very careful assumption as far as the growth of the business for the next 5 to 10 years. And we said we are capitalizing mostly on the current commercial drugs a very high growth. And in fact, those commercial drugs have been growing more than 20% in sales over the last several quarters now. We have assumed to be really on the safe side that there could be no FDA approval of cell therapy for the first 2 years after we acquired the business. And as you certainly know, Brendan, there have been 3 cell therapy approved this year already. So we are very confident about our ability to deliver on the business model for BioLife in 2027 and beyond as well.

And I would just add that then there is no change in our view of being at least $0.05 accretive for that first 2027 year.

Great. Thanks, guys.

Your next question comes from the line of Matt Larew with William Blair. Matt, your line is open. Please go ahead.

Hi. Good morning. I wanted to ask on filtration. You mentioned that was maybe slightly worse than expected for you in the quarter, but there was some timing that affected that. Could you just talk about sort of what led to that? Was it ATF or other parts of the franchise? And to the extent it was not ATF, just curious if you could comment on ATF and what your confidence is sort of looking into 2027 given that there were some pushouts earlier this year?

Yep. Good morning, Matt. So first of all, I would like to say, like, it is a testament that we have a really diversified portfolio of products because, yeah, where filtration was maybe a little bit weaker than we expected, you know, the 3 other franchises brought in extraordinary it extraordinarily well. In fact, we had a record quarter for both analytics and chromatography in the history of the company. But, yeah, so revenue decline indeed as expected. I mean, you know, we had the headwind of the gene therapy program. We have the 2 customer headwind on the ATF side. And also we sold the PolyMem business. But it has been a little bit higher than we thought, and the reason is really because of the system business. I mean, and then you heard us saying we had the highest quarter of order in system for the last 5 years, which is fantastic news. The less positive news was that these cells are gonna come in 2027. So the recognized sales of systems that are sitting under filtration So it is a very broad portfolio of products under filtration. Unfortunately, are not gonna happen either in Q3 or Q4 of this year. But they are all gonna happen in 2027. Which is why we are very confident that filtration will be back to historical growth level in 2027.

Okay. Thank you.

Your next question comes from the line of Dan Arias with Stifel. Dan, your line is open. Please go ahead.

Hey. Good morning, guys. Thank you. Jason, can you just maybe talk about product mix and how you think that sets you up into next year? And I guess I am thinking specifically about filtration and equipment. Historically, I think filtration has been above average in equipment below average. So how should we think about the impact of those contributions stepping up if you guys are right about seeing a rebound there? You think the net effect mix is positive or negative as you look out a bit?

Yes. Thanks, Dan. So first, just for clarity, the far majority of our equipment sits in the field franchise. So you know, the only thing that is meaningful that is really outside of it would be our analytics business that we sell our equipment through there. So that really is 1 in the same sort of dynamic filtration overall, to your point, ends up being accretive because of the pieces of ATF and other elements and some of the consumables that flow that are above our margin. So we. For 2026, again, mix becomes a push, plus or minus, in terms of what we are seeing this year versus last year. You know, we are still, as you know, going through our budgeting process for 2027. But see that is a similar case. So again, even as the systems piece of the equipment, which to your point would be lower than the average we are going to have other pieces of filtration in the other segments that allow for a lift. And then you have got, of course, proteins, analytics, that are accretive overall. So I think, again, in the end, mix becomes a plus or minus around the neutral level that we will be able to continue to manage.

Your next question comes from the line of Douglas Schenkel with UBS. Douglas, your line is open. Please go ahead.

Good morning. I want to ask a couple of questions on equipment. So revenue continues to lag expectations despite improving order trends and the growing backlog. Olivier or Jason, can you just describe what is driving that disconnect? Is it customer project delays, delivery timing, and any other factors that are worth calling out. And then can you talk a little bit about book to bill and how much of the backlog represents committed orders with defined delivery schedules? I am really trying to get at how much visibility and, essentially, what needs to happen for conversion into revenue to occur as we think about 2027? Thank you.

Yes. Good morning, Douglas. So I will start just by repeating. We had the highest order intake of capital equipment in quarter 3 of this year since 2021. And this is not like a light statement. I mean, it is something we have been waiting for a long time. And we think that is really setting us up for a really great year of 2027. We already know today, end of October of 26, that we are going to enter into 2027 with a much stronger equipment backlog than we had when we entered in 2026. So that definitely really something we are extremely happy about. Other good news is we do not think the equipment path has really opened yet. I mean, if you think about it, we have been hoping to see it opening more than we had seen it so far. But even with the tap probably being only 5%, 10% open, we have managed to deliver the highest quarter for the ever in the story of Repagen. So it means, like, when the tap finally opens, it is gonna be really potentially gigantic for all of us here in the industry, and we are really looking forward to it. So as far as revenue recognition are concerned, I mean, it is it is good and bad. I mean, we probably will not recognize a lot of it this year. it is all sitting in 2027. So all of these orders that we have gotten so far they are all gonna be recognized in 2027. So it does not go beyond. And to your question, is decision making still being delayed? The answer is yes. Absolutely. I mean, we have got the highest funnel even after all of these orders. We still have the highest tunnel we ever had on the equipment side What it did not completely raise the velocity of decision making. The speed at which customers really push a button of an order, but the funnel is very high. The order intake has been at the highest level. So we are still very confident about what is coming next. We want it to open more. that is the only piece here.

Okay. that is super helpful. Thank you very much.

Your next question comes from the line of Casey Woodring with JPMorgan. Casey, your line is open. Please go ahead.

Great. Thank you for taking my questions. I just wanted to clarify the 2027 comments you made earlier. I guess, what is the implied organic growth rate you are assuming? Or maybe asked another way, what do you expect as far as M&A contribution from BioLife in 2027? Just been trying to pin down where you expect organic to land next year. And then I guess on your assumption of the high single digit market growth rate for next year, that is the same you are assuming for this year. Things seem to be improving from an underlying perspective. So, you know, I guess the question there is just how conservative is that end market view from your perspective, and what could drive upside to that? Thank you.

Yes. Good morning, Casey. So let me start with the first part of the question. We. That framework is not a formal guidance for 2027. And you know that very well, we are only giving guidance towards the end of February, and then we are aiming to do the same this year again. But we just wanted to highlight the very strong reported growth we are gonna expand next year with the acquisition of BioLife. And the fact we are gonna exceed $1 billion sales threshold in 2027. that is a really big milestone for our company. I mean, obviously, who would have thought would be above a billion US dollar back a couple of years ago or so, and that is really why we decided to provide that data point. We are still going through budget exercise right now, and then bear with us. I mean, we have only consolidated the BioLife now for about 20 days or so. And so we are still learning about the business and figuring out exactly how we will 2027 will play out. What does remain exactly the same as before is that we are still aiming to outpace market growth by more than 500 basis points, which, by the way, we have done for the whole of 2025, and we are very close to the 500-basis-point above market in 2026. Even though we said with the headwind we had, we might be only 300-basis-point. Above that. So that is really saying exactly the same for next year. As far as the market. overall market growth is concerned, I mean, we are just watching and listening to what people say right now. And, and it is fair to say, like, at this stage, people are pretty careful about how 2027 will play out. I think there are 2 big swing factors for market growth, Casey, next year. The first 1 is really gonna be capital equipment pickup. I mean, and, again, even though we had a fantastic order intake in quarter 3, as I just mentioned to Douglas, I mean, we really want to see the tap opening much more fully than we have seen right now. That could be a huge swing factor for the overall market growth. And the second 1 I would just mention is probably the approval. I mean, this year has played out pretty nicely so far. On the cell and gene therapy side. it is a little bit lower on the monoclonal antibody side and biosimilars. So I have always said we want to see more FDA approval that could be another big swing factor for 2027.

Understood. Thank you.

Your next question comes from the line of Puneet Souda with Leerink Partners. Puneet your line is open. Please go ahead.

Hi, guys. Thanks for the questions here. I will keep it to 1. Just on key topic around on-shoring. Wondering, Olivier, anything in the order book that you are seeing suggesting on-shoring contribution right now? what is the latest thought on that? And how do you think that plays out in 2027 for you? Thank you.

Yeah. Thanks for the question, Puneet. I think you heard us say we have won several RFP so far this year, which for us is a great sign because we did not even have a seat at the table back a year ago. We won 1 RFP in Q1, 1 RFP in Q2, and 2 RFPs in Q3. Close to 3. In fact, we did not count the number 3 because it was more going on the analytical side of the hardware portfolio. But anyway, so we want several RSPs. Now the question is, are they all on-shoring related or not? And I tell you, we are open, it is sometimes it is a little bit difficult to pinpoint. Yeah. This is on-shoring or this is just something that would have happened anyway. I can still tell you, like, I do not think we have seen the beginning of the on-shoring project potential that I am actually convinced we are gonna see over the next few years now. When we entered into 2026, I really thought we would see a lot of those RFPs that are purely on-shoring related coming our way. We have probably only seen very few of these. I do still believe we are gonna see many coming. Once our customers are big pharma companies feel a bit more confident about how to split their capital between US, Europe, and Asia. And I really think this is gonna come sooner than later now. So still very bullish about it. it is fair to say we are probably 9 to 12 months delayed versus what I thought we would be today. But, certainly, RFPs coming next year, orders probably next year, and certainly some deliveries towards the end of next year and mostly in 2028 and beyond. Here.

Got it. that is helpful. Thank you.

Your next question comes from the line of Dan Leonard with RBC Capital. Dan, your line is open. Please go ahead.

Thank you very much. I was hoping you could talk about biosimilars as a growth driver. We just saw the first biosimilar for Keytruda filed with the FDA. And, you know, with that context, can you speak to when the biosimilar inflection might occur for your business And how do you feel about your wallet share in the biosimilar market more broadly?

Yeah. Good morning, Dan. We are really excited about what is coming on the biosimilar side. And, in fact, when you think about ATF, which, as you know, has been a little bit more precious this year with those 2 headwinds with the 2 customers. We have had numerous good news on the ATF side. Well, 1 of them being like by the end of quarter 3, we had won almost as many new products as many new customers as we had for the full year of 2026. 2025. Sorry. But very importantly, a lot of these are going to biosimilars. And we started to see a really notable pickup for ATF, and then that is something we are really excited about because for the reason you mentioned, there will be a lot of products falling off the patent cliff over the next 2 to 3 years. And to be designed into multiple of these is gonna be a very nice tailwind for us. Over the next several years for sure.

Okay. Thank you.

Your next question comes from the line of Matt Hewitt with Craig Hallum. Matt, your line is open. Please go ahead.

Good morning, and congratulations on the strong quarter. I was hoping to touch on the margins a little bit. I think you noted that you are seeing some higher inflation pressures. And I am just curious, is some of the investment that you are making internally on AI and some of the manufacturing efficiencies that you are investing in, is that a function of looking for ways to offset some of those inflationary pressures or how are you addressing that? Thank you.

Yeah. Hey. Good morning, Matt. So, yeah, it is a great question. You know, again, I think just like everyone else that the overall, whether you term it from oil or overall general inflationary pressures, we certainly have some of that as well. At first, I would say the our sourcing team is doing a fantastic job in finding offsets and helping to negotiate and work with suppliers to find the best solution. So that is really our first line of defense on that. I think then when you look at that broader overall how do we expand our gross margin, how do we continue to drive productivity, that is where exactly, the efforts that the team has been driving is jumping in, particularly on the AI side. Whether it is more, I will say, intelligent inspections to drive, better quality. We have done a lot of work this year and will continue to do next year on automation itself. Right, in terms of the advancements that we can generate. And, you know, so we have had a lot of great focus from the manufacturing team to help that broader picture of continuing to drive a 100-plus points of gross margin expansion like we target and are doing this year. And the other great news is that we have added a lot of good IT leadership underneath and behind the manufacturing efforts. To, again, add a different set of technologies, a different, way to look at our data infrastructure, to drive, you know, smarter decision making and really excited about the progress we have made internally on our overall AI and I will call it a-- or IT rather modernization and fit for growth. So thanks for the question, Matt.

Thank you.

Your next question comes from the line of Mac Etoch with Stephens. Mac, your line is open. Please go ahead.

Hey, good morning, thank you for taking my questions. Maybe Olivier, you know, sticking with the equipment and maybe 1 on analytics, just I think recently, you noted that 80% of systems sold over the prior, you know, last 3 months has included process analytics up from maybe, call it, 20% to 25% last year. Can you just provide us an update with how that attachment rate is trending in Q3? And what is driving the setup? Is it customer pull through? Is it integrated solutions bundling, on-shoring RFP mix, etcetera? Thank you.

Hey. Good morning, Mac. Yeah. I know we are very excited about what is going on with analytics I mean, had another record quarter, in fact, record quarter ever for the company with 20% growth. Interestingly enough, beyond equipment, we had very strong sales of both consumables, but also services You heard me saying earlier, we are now servicing 38% more of our system versus the beginning of this year, and then it is still a long run away. So service is gonna be really accretive to our growth over the next several years. But 1 of the big events really that happened recently for us is the USP chapter 507 recently recognized our SoloVPE PLUS technology as being really the technology which is aligned with the official standard to measure protein concentration. And that is a really, really big deal for us because where we knew people were using our technology mostly today for protein concentration. And as you just alluded to it, this is gonna be another big accelerator for the FlowVPX side of the picture which is really this inline protein concentration tool that indeed our customers are using now much more broadly than they were a year ago. And you are right. 75% to 80% of any system we are selling, there is a FlowVPX attached. And that is 1 of the other reason why this analytical business has been growing very nicely. And we love it obviously a lot, because beyond the growth of analytics, this is also enabling us to differentiate ourselves very, very strongly on the equipment side, downstream equipment side. And with the upcoming tap opening much more broadly, we think that is gonna become a huge differentiating advantage for us. So a lot of great stuff happening on the on the analytical side. I will just end by saying as you know, we are in the upgrade cycle of the SoloVPE install base, where we have seen quite a lot of upgrade already. We are actually pretty much at the beginning of the cycle here. So we are really poised for several other great quarter of our analytical product portfolio and finally, on the 908 side where I was always open saying the integration had taken us more time than probably expected initially. We are now really running full speed, and our funnel of opportunity has increased by 50% since the beginning of the year. So this should be another really nice tailwind for analytical business in 2027 and beyond as well.

I appreciate the color.

Your next question comes from the line of Jess Justin Bowers with Deutsche Bank. Justin, your line is open. Please go ahead.

Thank you. Good morning, everyone. So Olivier, just sticking with PAT, it sounds, can you refresh us on the opportunity for. In terms of the replacement cycle for flow? And then Part 2 is just. It sounds like systems are the primary driver of the filtration revisions. Can you discuss how the consumables piece of the franchise is performing? This year?

Yeah. So on PAT, I kind of already answered quite a bit of your question with Mike earlier. I mean, we think. I made the analogy to the iPhone when the iPhone was launched with a camera where nobody really thought why do I need a camera? I have my own camera. it is beautiful. And now probably 80% of people buying a new iPhone is because of the better quality of the camera. So I think the analogy is like people did not really realize there was a tool called FlowVPX that would enable them to measure protein concentration in line. And this now that probably bought 1 or 2 system over the last 2 to 3 years, they realized that they love it and that this is becoming a really big key differentiator and that now they will not even imagine probably running a system without having the ability to measure protein concentration live. So according to that, this is becoming really a big differentiator for us and the. Yeah. And I forgot the second half of your question. Can you repeat again? Yeah. It was just around filtration, and it sounds like the systems have coming in a little wider than what your expectation were. So just trying to understand how the consumables piece is trending and, you know, versus expectations and how that is performing this year? Yeah. No. So excluding some of the anticipated headwinds. Yeah. Exactly. So the 2 are somewhat linked to each other, Justin, if you think about it, I mean, particularly on the ATF side, I mean, if people delay buying equipment and so on, then you might have a little bit less of the flow of new consumables coming in. So where the flow of consumable from existing product that have been either on the market to commercialize or in late phase is at a good level. it is fair to assume like there was less hardware installed over the last 6 to 12 months and probably less new consumables are coming from this lack of new hardware. But as I mentioned earlier, in the first 9 months of the year, we got as many new customers slash new application wins as we had for the full year of 2025. So I am really very confident that we are gonna be back to very nice growth trend for ATF from 2027 onwards. And then outside of ATF, we had a pretty good performance of our flat sheet cassette business, which is probably 1 of the few area where we really have a direct competitor, not a lot of differentiation. And it is fair to say we are gaining market share on that side because that part of the business has been doing really well this year. And then finally, flat sheet management where the growth overall has been nice. We were probably hoping to see even more growth than we have which is maybe 1 of the other factor why filtration finally is a little bit lower than we thought. But from a margin point of view, as you know, margin are quite significantly lower anyway. Thank you.

Your next question comes from the line of Michael Polark with Wolfe Research. Michael, your line is open. Please go ahead.

Hey. Good morning. I want to better understand the BioLife fourth quarter guidance and what it might suggest for a good 2027 model inputs. So $24 million for the fourth quarter you did not own it for 6 days, so almost a full quarter. The year ago in fourth quarter 25 was about $25 million. So it looks like you are modeling it flat to maybe up a little bit on a, you know, full quarter basis. And it had otherwise been a 20% growth asset. So I wanna understand, is this just a normal model haircut? Hey. You are learning a bunch more. So let's model a little lower than where they were running. or is there something specific about that adjustment? Then the related question is just running into 2027. Is the good number for now the $115 million, you know, the current run rate, or is 20% growth, still reasonable for modeling purposes? Thank you.

Yeah. No, great question. I think we just really need to impress the. In those first few days of October, they were. They had a lot of shipments in responding to some very specific customer needs. And so on a, you know, I will say, run-rate basis, there was a disproportionate amount of sales in those first days. And so it really is not the math about flat year over year. So I would caution you against taking that view. And, of course, we will continue to see how they will they will deliver in the fourth quarter and then into next year. Again, I think you are thinking about all the pieces in the right way. We, again, have just owned them for what, 20 days. You know, and so we are continuing to get our arms around their 2027 outlook. Certainly, we have our models and expectations. But before we finalize the budget and a guide on that, we are gonna spend the right time to do it. Again, no change in the view overall, though, that they will still be at least $0.05 accretive for us kind of top to bottom in the P&L. So really excited about what we have learned, and Olivier highlighted that we are even more excited as we spent more time there. And excited about the market. So more to come to talk through that.

And, Mike, just to add to what Jason said, with the $24 million plus what they recognized during the first few days of October plus our Q3 results, we are aiming for full-year $114 million in sales for the BioLife business, so which is above the midpoint of the last guidance Rod gave at the last earnings call he had for BioLife separately.

Your next question comes from the line of Paul Knight with KeyBanc. Paul, your line is open. Please go ahead.

Thanks. Olivier Loeillot. And could you talk to the Ecolab renewal and also looking at this 40% proteins growth is this to imply that we are now at a kind of critical mass of the years of development at that particular product line. And 40% could happen again in the quarter or years ahead.

Yep. Good morning, Paul. Yeah. So starting with Ecolab, yes, we are indeed very pleased that we have just extended our supply agreement with them. This is really building on the very strong and productive partnership we have had between the 2 companies. I have been with Repligen for the last 3 years. I have to say we are becoming closer and closer, supporting each other, and they have an incredible momentum, So we see a really meaningful opportunity to build on that success in for several years ahead of us. As far as the broader protein franchise is concerned, you heard me saying and I love all of my 4 big franchises, but this 1, I think we have done a stunning job to just reinvent ourselves because where we were a pure OEM supporter of our 3 companies back a few years ago. So beyond now the Purolite collaboration, we have our own data in our hands very broadly on both growth factors. But also on our own custom catalog ligands for nonmonoclonal antibody application. And we have had incredible traction for the last several quarters now. In fact, year to date, our protein business has been growing 34% So we are. it is still a bit lumpy, which is why a Q4 will be a little bit more challenging. We have high comp in qualifier for protein, but we have got so many opportunities across the entire protein franchise that the next several years are gonna be extremely exciting for that franchise here.

Thanks.

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, Jillian, and thank you all for joining us today. We are really very pleased with our third quarter results. We are also very encouraged by the continued momentum we have across our business. With the addition of BioLife and the strategic investment we are making across our entire portfolio and all regions, we are extremely well positioned to capitalize on the growth opportunities ahead of us. Thank you again, and have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.