Josh Waldman

Patrick credited innovation, process analytics in biopharma, and the LabX platform, expecting mid-single-digit lab growth.

Shawn said automation/digitalization areas perform well, with chemical the softest of the three main end markets.

Patrick framed PI as a replacement business with mid-market and X-ray innovation providing a long growth runway.

Patrick noted service approximately balanced across lab and industrial portfolios. PI has stronger service business within industrial while core industrial has less. Conscious decision to overinvest in service with strategic programs. $1 billion milestone with ~1/3 of installed base penetrated.

Shawn said H2 2026 implies ~2% organic growth range, not a significant ramp. H2 will have less pricing and acquisition benefit. January and February are goofy months with low seasonality and Chinese New Year. Only 1.5 months backlog. Will learn more after full Q1.

Patrick highlighted 8% service growth including 1% acquisition benefit. Continued targeting mid-to-high single digit growth in 2025 and 2026. Long-term growth expected above company average. CEO personally prioritizing service capture opportunity with great programs in place.

Patrick confirmed bioprocessing strength visible across portfolio: process analytics sensors, lab QA/QC solutions, and industrial tank/scale weighing. Anticipates momentum continuing into 2026 with strong customer engagement. Strength in both sensor consumables and equipment.

Shawn explained Chinese rate drop from 145% to 30% on ~$50M exports was biggest change. Short-term mitigation mix of pricing (2% → 3%), supply chain optimization, and cost savings.

Patrick noted good visibility through internal systems with no dramatic change. Confident in Q3 based on funnels and leads. Acknowledged fast product turnover limits long-range visibility.

Patrick clarified biggest core Industrial reduction was China, not US. US had some project delays in Q2 but these were larger one-off automation projects, not a trend.

Shawn didn't break out bioproduction OEM specifically but noted 60% of core Industrial serves pharma, biopharma, food manufacturing, and specialty chem.

Patrick clarified growth was broad across pharma, food, and product inspection. Replacement cycles expected to pick up as budgets free. 2025 still considered transitory.

Shawn noted pricing is more agile than supply chain adjustments, will use both levers with differentiated approach.

Management declined to guide 2027 margins but said divestitures and the Cambodia acquisition should be tailwinds, cautioning against annualizing the Q4 run rate.

Birgit said CRL often retains work when biotechs are acquired by pharma clients. In other cases, CRL gains access through the acquiring pharma. Net impact is neutral to positive tailwind, never a headwind.

Birgit explained pharma Q1 bookings were below prior year's exceptionally strong Q1 2025 (when pent-up demand was released after restructuring). Current levels described as adequate and stable with proposals also up, signaling upcoming quarters should improve.

Foster confirmed better visibility from clients emerging from cautious period. Cancellations were from large complex studies with different clients for different reasons. General toxicology was stronger in Q2 which feeds specialty work. Pease noted Q2 cancellation rate as percent of bookings was not too dissimilar from last 18 months.

Management said reagent pull-through follows instrument CapEx placements, but that it is too early to bound the magnitude of the AI-driven opportunity.

Max attributed DX upside to global NBS strength and IDx outperformance (partially instrument timing). Both areas have upside potential in FY26 given prudent initial assumptions.

Prahlad denied budget flush, characterized improvement as cautious optimism from greater regulatory/policy clarity. Max added reagents slightly better than expected (flat vs expected down low single digits).