ORASURE TECHNOLOGIES INC Q4 FY2024 earnings call

• Delivered Q4 revenue in the top half of guidance range; core revenue grew 10% YOY.
• In December 2024, acquired Sherlock Biosciences to expand innovation pipeline.
• Secured FDA approval in December for a labeling change to OraQuick HIV self-test, expanding age range to 14+.
• Received $7.5M award through Rapid Response Partnership Vehicle for Marburg virus test development, potential up to $11M.
• Generated positive cash flow from operations for core business.
• Progressing with sample management solutions expansion into blood proteomics, self-collected urine, and self-collected blood samples.
• Acquisition of Sherlock aligns with innovation strategy; Sherlock's CTNG test in clinical trials, expected FDA submission by end 2025.
• Advancing efficiency agenda via automation, facility consolidation, and insourcing.

In Q4, core revenue was $36.5 million, growing 10% year over year. Diagnostics revenue grew 9% and Sample Management Solutions revenue grew 14% year over year. The International Diagnostic business had $41 million in revenue in 2024, with approximately 80% associated with donor-funded programs. Risk assessment testing revenue in Q4 was $2.1 million, with plans to wind down remaining inventory through the first half of 2025.

• Q1 2025 total revenue guidance: $27.5M - $31.5M; core revenue $27M - $31M (includes $1M risk assessment revenue).
• Q1 COVID-19 revenue expected ~$0.5M.
• Midpoint of core revenue guidance flat YOY after exiting molecular service and risk assessment testing businesses.
• Gross margin in Q1 low 40s, expected to expand significantly in 2025 towards 50% target.
• 2025 operating expenses include ~$10M in innovation, with $7-8M related to Sherlock acquisition.

• Uncertainty in PEPFAR funding impacting international diagnostic business, included in Q1 guidance.
• Potential reductions in NIH research funding affecting academic and research segment.
• Tariff discussions and their potential impact on manufacturing, though reshoring efforts are underway.

Q: Jacob Johnson inquired about global uncertainty, PEPFAR impact, and academic end market.

A: PEPFAR is most closely monitored, with academic not seeing significant slowdown yet.

Q: Casey Woodring asked about BARDA contract and scrap expense.

A: BARDA contract is back-end loaded, and scrap expense was a one-time event.

Q: Andrew Cooper questioned Q1 guidance, PEPFAR progression.

A: Timing issues with PEPFAR and a large consumer genomics customer affect Q1 guidance.

Q: Brandon asked about tariffs and OpEx for Sherlock.

A: Reshoring efforts reduce tariff exposure, and OpEx for Sherlock is expected to be ~$20-25M, mostly for clinical trials.

Q: Daniel asked about consumer genomics timing and international end markets.

A: Consumer genomics timing is due to a single large customer, and international end markets have bipartisan support but are closely monitored.