Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OraSure Technologies Inc (OSUR, Financial) reported Q1 revenue in the top half of their guidance range for both total and core revenue.
- The integration of Sherlock Biosciences is progressing well, enhancing OSUR's product pipeline with molecular diagnostics innovation.
- The company is ahead of schedule in transitioning the manufacturing of SMS products to their facilities in Bethlehem, Pennsylvania.
- OSUR's international diagnostics business showed growth, driven by the hepatitis C self-test and strong international demand.
- The company has a strong balance sheet with $248 million in cash and no debt, allowing for strategic investments and stock repurchases.
Negative Points
- Core revenue decreased by 2% year-over-year, with Sample Management Solutions revenue declining by 16% due to disruptions in consumer genomics.
- The US diagnostics business faces headwinds due to potential budget cuts and staffing reductions in public health organizations.
- The Together Take Me Home program is expected to end due to funding cuts, impacting revenue by approximately $4 million in 2025.
- There is significant disruption from a large customer in the consumer genomics segment, with no expected revenue from them in Q2.
- Uncertainty in NIH funding is affecting academic and research labs, contributing to mixed market trends in Sample Management Solutions.
Q & A Highlights
Q: How are conversations with alternative funding sources for international revenue, particularly for HIV testing, given the funding uncertainty?
A: Carrie Eglinton Manner, President and CEO, explained that conversations with multiple funding sources, including US and international health departments, are going well. Movement that had stopped is now restarting, leading to a steady but flat outlook. The multilateral funding sources show more stability, and the trajectory for international revenue remains flat due to ongoing uncertainties.
Q: Did you see any pull forward in demand due to potential tariffs, and how are you tracking future ordering trends?
A: Carrie Eglinton Manner stated that there was no pull forward in demand. The company is closely monitoring the tariff situation, with minimal impact expected due to their concentrated manufacturing in the US and Canada. Kenneth McGrath, CFO, added that they built up some inventory at the end of Q1 as a precaution.
Q: Regarding the Together Take Me Home initiative, does the $4 million headwind assume no contribution in Q4, and what are the alternative avenues post-termination?
A: Kenneth McGrath confirmed that the $4 million headwind includes $1.5 million in Q1, with the rest split between Q2 and Q3. The program ends in Q3, and they are exploring alternatives to continue the program due to its demonstrated value in identifying HIV-positive patients.
Q: What is the status of the SMS genomics customer, and what are the expectations for their inventory levels and ordering activity?
A: Carrie Eglinton Manner noted that they anticipate no volume from the customer in Q2 and have limited visibility on future orders. Despite this, the business grew year-over-year without the disruption, thanks to diversification and expansion efforts.
Q: Can you provide more details on the $40 million buyback program and any plans for capital deployment?
A: Kenneth McGrath explained that the buyback is spread evenly over two years, with $5 million per quarter. Carrie Eglinton Manner added that they are focused on M&A opportunities to accelerate innovation and growth, alongside investments in Sherlock's molecular diagnostics platform.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
