BIO-TECHNE's 2025 Profit Drop: A Deep Dive into One-Time Costs

BIO-TECHNE Corp. (ticker: TECH), a key supplier of reagents, instruments, and services for the life sciences industry, recently released its annual financial report. To understand the company's performance over the past year, let's dive into the details from its 2025 Form 10-K filing. While the company saw its sales grow, a look deeper into its income statement reveals that significant strategic costs heavily impacted its profitability.

Healthy Sales Growth Meets Cost Headwinds

For the fiscal year ending June 30, 2025, BIO-TECHNE reported a 5% increase in consolidated net sales, reaching $1.22 billion compared to $1.16 billion in the previous year. This growth was driven by solid performance across its two primary business segments:

• Protein Sciences: The larger segment, providing biological reagents and analytical tools, saw its revenue climb 5% to $870 million.
• Diagnostics and Spatial Biology: This segment, which develops diagnostic products and advanced tissue analysis assays, grew its sales by 6% to $346 million.

However, this top-line growth did not translate to the bottom line. Net earnings attributable to the company fell sharply to $73.4 million ($0.46 per diluted share) from $168.1 million ($1.05 per diluted share) in fiscal 2024.

To visualize how the company's revenue was channeled through its various costs to arrive at its final profit, the following flow diagram breaks down the income statement.

The Story Behind the Shrinking Profits

The significant drop in net income can be traced directly to a surge in operating expenses, particularly within Selling, General, and Administrative (SG&A) costs. SG&A expenses jumped 26% to $588.5 million for the year. The filing identifies several key drivers for this increase:

• Asset Impairment Charges: The company recorded a substantial $80.5 million charge for the impairment of assets held-for-sale. This is directly related to its strategic decision to divest its Exosome Diagnostics business. An impairment charge is a non-cash expense that companies take when the value of an asset on their books is deemed to be lower than its recoverable amount.
• Litigation Costs: A non-recurring litigation charge of $41.8 million hit the books in 2025. This stemmed from a binding arbitration award related to a dispute with the company's former CEO.
• Restructuring Activities: BIO-TECHNE incurred $28.2 million in restructuring and related costs as it works to optimize its global manufacturing processes and improve operating margins. These strategic moves, while costly in the short term, are aimed at improving long-term efficiency.

Strategic Shifts and Future Outlook

The financial results clearly reflect a company in transition. Following the end of the fiscal year, on August 5, 2025, BIO-TECHNE announced a definitive agreement to sell its Exosome Diagnostics business for $15 million. This move validates the impairment charges taken during the year and signals a strategic refocusing of its portfolio.

While revenue growth remains steady, BIO-TECHNE's 2025 performance was defined by significant one-time expenses. These costs, tied to litigation and a strategic divestiture, overshadowed the solid underlying growth in its core businesses. For investors, the key challenge is to weigh these short-term pains against the potential long-term gains from a more streamlined and focused operation. The company's ability to successfully integrate recent acquisitions like Lunaphore in the high-growth spatial biology market, while effectively managing its operational footprint, will be critical to its future success in the competitive life sciences landscape.