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November 14, 2025 • 4 min read
In the complex world of life sciences, understanding the health of companies that provide essential research and diagnostic tools is key. One such company is BIO-TECHNE Corp (TECH), a global developer of reagents, instruments, and services. Let's dive into its latest quarterly report filed with the SEC for the period ending September 30, 2025, to uncover the story behind the numbers.
For its first quarter of fiscal 2026, BIO-TECHNE presents a clear case of strategic repositioning. While total sales remained nearly flat, the company achieved a significant boost in profitability, driven by deliberate restructuring efforts, including the sale of a non-core business.
At first glance, BIO-TECHNE's revenue of $286.6 million was down just 1% from the $289.5 million reported in the same period last year. In the current challenging market for life sciences tools, this stability is noteworthy. However, the more compelling story is found in its improved profitability.
Operating income surged an impressive 19% to $47.7 million, up from $40.0 million a year ago. This was largely due to an improved gross margin, which expanded to 65.6% from 63.2%. The company accomplished this by reducing its cost of sales by over 7% year-over-year, signaling that its cost-management initiatives are yielding positive results.
The following flow diagram provides a visual breakdown of how BIO-TECHNE's revenue was converted into profit for the quarter.
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In the chart, you'll notice a revenue category not allocated to a specific business segment. This primarily consists of approximately $5.4 million in revenue from the Exosome Diagnostics business, which was held for sale and subsequently divested during the quarter, along with a small adjustment for sales between the company's own divisions.
BIO-TECHNE's results are best understood by examining its two business segments, which are on different trajectories.
Protein Sciences: As the company's largest division, providing foundational research tools like proteins and antibodies, this segment posted sales of $202.2 million. This represents a 1% decrease from the prior year (a 3% decline on an organic basis, which excludes currency effects). Its operating margin saw a slight compression to 38.4% from 39.4%, reflecting lower sales volume as this more mature segment navigates market headwinds.
Diagnostics and Spatial Biology: This segment is where the company's strategic actions are most visible. Reported sales fell 4% to $79.5 million, but this number requires a closer look. During the quarter, BIO-TECHNE completed the divestiture of its Exosome Diagnostics business. The filing clarifies that excluding the impact of this sale, the segment achieved 3% organic growth. More importantly, its operating margin more than doubled, soaring from 5.1% to 11.2%. The company directly attributes this dramatic improvement to the divestiture and ongoing productivity initiatives, underscoring the success of its restructuring.
While profitability was a clear strength, cash flow from operations decreased to $27.6 million from $63.9 million in the prior-year quarter. This was primarily attributed to changes in working capital, such as the timing of tax and salary-related payments, rather than a fundamental issue with earnings quality. On the balance sheet, the company demonstrated fiscal discipline by paying down $46 million of its long-term debt, reducing the outstanding balance to $300 million.
In conclusion, BIO-TECHNE's latest quarter was defined by strategic execution rather than headline growth. By divesting a non-core asset, the company has significantly improved its profitability profile, particularly in its higher-growth Diagnostics and Spatial Biology segment. The path forward will involve sustaining this operational discipline while working to reignite organic growth across its entire portfolio. For now, the focus on building a more efficient and profitable foundation appears to be paying off.
Last updated: November 14, 2025