All right, we're live. Welcome, everybody, to the grand finale of the UBS Healthcare Conference. I'm Dan Leonard, the Life Science Tools and Diagnostics Analyst at UBS, and we're pleased to be hosting Repligen this morning, Jason Garland, CFO, and Steven Chehames from Investor Relations. Good morning. Thank you both for being here. Thank you. So you just reported your third quarter. I thought we'd start off, I'd start off by asking you to just hit a couple key highlights from the third quarter results. Yeah, no, absolutely. We were very pleased with the momentum in the quarter results. I think the market is continuing to show positive signs for us, as well as just our team's execution within the quarter. I mean, we had revenue up 10%, we had orders up 6%, and then we also shared that orders number was about 4% higher than revenue as well. So again, continuing that momentum. When you look at some of the pieces, large pharma continued to really be a strong place for us. So that's been probably one of the earliest, you know, say, things getting back to more normal levels and has continued to do so. But then also really encouraging to see CDMO now for the second quarter see strength both at the Tier 1 and Tier 2, right? Because that's when we saw earlier signs of recovery, let's say, you know, nine months, 12 months ago, it was kind of that mix of, well, is it Tier 1, Tier 2, and now, you know, now two quarters in a row we've been able to see both of those pace nicely. And then, you know, if you look at some of the other dynamics, consumables were very strong. One of the highest quarters we'd seen in a while, last couple years, I think. And then, but equipment also showed some good signs again, and that's been a bit more of a choppy, I'll say, recovery really across the industry, but saw good strength there. And then I'd just highlight two new modalities of a big focus for us. 20% or more than 20% growth, a record quarter for us. And so continue to see that our offering and our ability to offer customer solutions in that space is really picking up a lot of momentum. So overall, great quarter. Anything I missed, Steven, you'd highlight? Spot on. Great. So if you were looking at your heat map, a lot would be green. Yes, as you see that I have them on here, and that's exactly what we look at. A lot of greens on the heat map today. I know that coming into the quarter, you were expecting seasonal softness, and you didn't see that. What was the biggest source of upside surprise if you had to name one or two things that were divergent from your plan rolling into the quarter? I would say though that, Dan, that from a seasonality, you know, third quarter was a bit more in line with that first half, right? And then our guide obviously implies a nice tick up in the fourth quarter. So I would say that the seasonality was as we expected, right? And that third quarter, you know, tends to be a little bit lighter. Just a lot of, you know, I can poke on my boss, you know, who said, "Hey, I'm French. I like to take a month off in the summer." And so certainly the, I'll say some of the European business we see slows down a little bit, and that's typically what hits in that seasonality in the third quarter. And then you see that kind of that recovery in the fourth. I think really it's what we had expected for the third quarter and what we had planned for. And then you mentioned consumable strength being the best it had been in a couple of years. Remind me, you know, where destocking fits into that narrative? Yeah, you know, so I think for us, we believe that it's primarily behind us. You know, the, I'll say what we're seeing within consumables. And again, you know, our company, that consumables covers a lot of different ground, right? And so, you know, so it also is important to look at the pieces. ATF, for example, would sit in, you know, most of that would sit in the consumable side, and that was a really big source of strength for us. So both from a franchise perspective for filtration and then in consumables as well. But so, you know, our view is that a lot of that stocking, destocking has taken place. There's still going to be pockets of it, but overall, we think we're largely past that. Anything you'd flag from a regional dynamic? You know, we saw strong performance really across all the regions with the exception of China, right? And China has been, you know, certainly a soft spot for us this year. You know, we talked about it being about 4% of our sales. So it's where we expected. I think we'd say that we're hopeful that it's kind of bottomed or bouncing on the bottom, right? And so that certainly as we go into next year, we won't see the same order of magnitude of headwind that we saw in 2024. But when you look at the other regions, again, North America continuing to do well. And then if you take out China from the rest of Asia, again, a lot of great momentum there. And that will continue to be a big focus for us as well. Again, Olivier spent a fair amount of his career in Asia and really feels like there's a lot of great opportunity there that we can continue to, I'll say, tap into a bit more and even grow in a lot of spaces that may not be in China. But again, we think that starts to get back. But 2025 is for China, again. It's probably neutral, is the way we're thinking about it at the moment. Okay, and Asia ex-China is a big priority for you guys? Yeah, absolutely. Absolutely. I mean, South Korea, Japan especially, Singapore, those are kind of, if I cut the order, the three big players and areas that we're doing well in, but that we feel like there's a lot more opportunity in room. You look at a lot of the, I mean, South Korea especially, the big CDMO players, there's just going to be a lot of opportunity to continue to partner there. Okay. And I know you made a couple comments, or Olivier made a couple comments on the call around the order book quality. You know, he made some comment about the 50% probability funnel. Can you revisit that? What's the 50% probability funnel and what's the importance of that metric? Yeah, and that's a great question. So when we have our commercial team and our product team, you know, out in the market determining where's the next opportunity, right? What's the next customer that we can partner with? What programs are out there? What new facilities? You know, we capture all those in a pretty robust, you know, database. And then we track the opportunity. And then as time goes on, we track effectively what's the probability of that converting to an order. And so certainly there's a time element, right? As the further you go along, you'd hope that probability would tick up. And then there's obviously just the inherent opportunity in how we think we are competitively and creating value. And so that funnel is one that we look at. And the greater than 50% probability is, again, there's a lot of other tail of smaller things that might be less than that. But as that goes greater than 50% and then even up to the 90%, then again, we're more satisfied or expecting it to be able to convert. And so when we look at that as a, okay, what's the leading indicator of our order growth, if we don't have it sitting in that pipeline, then there's, you know, less chance that the orders will grow. And so that's why we are highlighting that our greater than 50% probability funnel or order pipeline was up over last year. And so that's the, is it 30%? 30%. Yeah, it was over last year, and so that's again a great indicator that there's traction in the market. There's a lot of opportunities being, you know, I'll say worked, and that can result in orders on the other day. Two things. One, so that was messaged or communicated in part to convey the quality of the funnel, correct? Yep. Yeah, because again, the quality of the funnel would be, well, if you're heavier on the lower than 25% or lower than 50%, right? Not same level of quality. Yep. All right. So the funnel has gotten higher quality. Yep. But then just the magnitude of that growth, I wasn't sure what to do with. I mean, you don't want me putting 30% growth in a forward period. Yeah, right. I'm trying to figure out how to reconcile or frame that in context of something I'd put in a spreadsheet. No, that's a good point. I mean, again, you know, I think we cut it off at 50%, 75%, and 90%, right? So as that, if we were to parse that out, of course, that growth rate would likely sort of temper a little bit. But again, it's still 50%, right? So it's not all going to convert by definition. And so again, that, but if you don't have it, it's back to my point. If you don't have it there, you're not going to book an order six, you know, three, six, nine months later. Got it. Yeah, and Dan, to Jason's point, there's varying degrees of those 50% probabilities converting to orders. So if it's a small scale project, it's probably in that three to six months, larger scale, six to nine or even longer as well. So it's spread across. Can you talk about the importance of that book-to-bill metric? I know at times you thought it was overly obsessed over and maybe not the best metric to use for forecasting your business. I'd love to learn more. Yeah, no, in fact, you didn't have, you haven't heard us say book-to-bill this quarter. Even when asked, you know, look, our view is that it was a great metric to understand when was there an inflection point in sort of the downward trend of the market and how, you know, we hit that point where, all right, things are going back and at what level and speed. And again, if you're not bringing in more than you're selling out, you're just decreasing backlog and/or not keeping up with growth. And so it was such an important metric as we've gone through like the last year and a half. I think as you go forward though, it's just less relevant. And it's really about the growth rates that we talk about. And are you growing your sales? Are you growing your orders? And so again, we've, you know, just, we're trying to transition away from it. And that's why you didn't hear us use the term. And we're just saying, hey, at least maybe hopefully it was clear to everybody. If orders are 4% higher than sales on an absolute basis, that that would have been, you know, equivalent to a book-to-bill. But we really do think that that's less of a relevant metric in a more normalized environment. And we'll probably speak less about it. This is our like weaning off sort of point. Is the idea that if revenue is growing at a rapid clip and orders are also growing at a rapid clip, you might have a book-to-bill, which isn't impressive, but hey, your orders are growing at a rapid clip and so is revenue. And so. Yeah, I mean, absolutely, right? And to your point, again, why your book-to-bill can be great if your revenue's low. That's not what you want, right? You know, so it's just a lot, there's a lot of, you know, nuance to the metric and you have to look at a lot of pieces underneath. And that's why I think we're just back to, look, are we growing those, you know, at the levels we need to? And again, we will still walk into every quarter where we still need to book orders within that quarter to then ship out, right? And so that's the other piece that we look at. And so, again, by definition, was it maybe a third of that of our revenue is still going to be kind of always the one-to-one by definition because you're, you know, you're only walking in with maybe two-thirds in backlog. So that's the other way that you've got to kind of think about this too. Okay. So if I heard you correctly, you know, destocking isn't a theme for Repligen at this point. So the customer base, I guess you could almost infer from that, the customer base is largely normalized, but your revenue growth rate remains below trend, below your standard. So what's the, you know, what's the gap between those two at this point? Dan, it's a great question. I think that, you know, if you look at some of the, again, the soft spots that we are paying close attention to, I mentioned China, right? So again, in an overall market growth, China has historically been a very big contributor to that. So if it is, you know, below the average of market growth rate or even a drag for us at the moment, you know, that has an impact. I think the other area that we continue to watch, and I think, you know, a lot of folks have been talking about this is sort of this, you know, call it, you know, emerging biotechs or early space, where again, if you were to look at our total pharma as an example, you know, our growth is largely in the big accounts, right? You know, maybe the second, you know, tier accounts, but the small tail of more of the emerging has certainly been a softer spot for us. And so we hear, you know, kind of some mixed results on trials, right? New trials. We also hear, you know, kind of this dynamic as well with funding where it's, in both cases, they're both better than last year, but maybe not, you know, picking up at the rate that everyone's looking. So that's the other area that we continue to watch. Again, I think that we were encouraged by the picking up or now more consistent activity with that Tier 2 CDMO. That was a space as well that we think ends up being, you know, a good indicator of the market overall. And I do think this hardware, you know, sort of dynamic and spend is still going to be something that the industry and Repligen are going to kind of continue to watch. And I think those end up being some of those drags against some of the other positive signs we're seeing. But net-net, we still see the right, you know, positive momentum. How important were China and emerging biotech to the former trendline growth for the market? You know, I don't know the numbers, but certainly China has been a big contributor to growth for the industry for a while, right? And you can argue as well that maybe even some of our peers and others in the industry had an even larger, I'll say, you know, exposure and opportunity in China than Repligen did. So that's why again, we're at a point where, okay, yeah, it's been a drag this year, but at 3%-4% of total business, right? It doesn't have the same kind of impact that it did. Do you remember at its peak where we were at? For our percent of revenue? Yeah. It was about 10% of overall revenue. But just keep in mind, so at the peak, it was about $80 million, but about $20 million of that was COVID-related. So true base revenue of China was about $60 million at the peak. Yeah. So it's hard to say on the overall, but I think everyone would suggest that you don't grow at some of the, that the growth rate the industry is seeing was certainly buoyed by China growth. And so that's what we'll have to continue to watch when that comes back. And look, there's some positive signs there, right? Some stimulus, I think that you can see more clear line of sight to getting into the industry and the players there. And, you know, we're going to have to continue to watch. I don't think it's, our view is that this is not a long-term issue, but how long it takes to get back or when it gets back to more of a growth, I think is still the open question. But I think we'd be naive to believe that that won't be a continued source of growth for the industry. Yeah. Yeah. What I struggle with is if the historical trendline for the bioprocessing industry is call it 10% growth, you know, how much of that was China, how much of that was emerging biotech, and if I want to adopt a different view on the go forward, what's the new number? Yeah, absolutely. And again, the go-forward sort of short-term versus medium-term, right? And how that plays out over time. But I think both of those start to come back. And then, you know, maybe this is a good time to talk about just, you know, your fourth quarter seasonal ramp here and your confidence in that ramp to think about just the immediate term here. Yeah. So again, I mean, right from the beginning of the year when we gave our initial guide, we always recognized that fourth quarter would be a strong step up from certainly the first half and the third quarter with the seasonality we talked about. And that's playing out exactly as we expected. You know, here we are certainly now with a month and a half to go. I think Olivier as well mentioned that October was where we had expected it to be from an order. So again, there's good visibility to the demand. And now frankly, it's on us to execute and get things out the door. So we have line of sight to that. And again, for the guide, we feel good about the range that we've shared. Okay. Another thing you shared on the earnings call was a few framing thoughts for 2025. Yeah. Can you revisit those? Yeah. I mean, a couple of the things I wanted to just kind of make sure that folks were thinking about was the impact that the restatement on this one transaction that we had to correct for, as well as some other what at the time was kind of de minimis COVID business that we had in the first half, that we think about that now as a headwind in 2025. I mean, honestly, we were really excited about not talking ex-COVID or, you know, or base, you know, and really wanted to put that behind us in 2024 and then in the 2025. But the reality is we will walk in with about $11.5 million of headwind for COVID business in 2025. And you know, that could be almost two points of growth, right? That's why we just wanted to kind of reiterate that we still feel that this low double-digit growth in 2025 is a very reasonable way to think about where we're going to land. We obviously haven't given guidance and we'll do so in February. But that low double-digit growth would be ex-COVID, right? And so that's how we're thinking about that. And I might even go further on the margin level too. You know, gross margin in 2024 got about a half a point better because of the restatement as well. And we had been talking prior to that that we could get about 100-200 points of gross margin expansion in 2025 and kind of the next couple of years, I'll say, as we tick that back up. And I'd say that view is unchanged at the gross margin level. The op margin though, you know, we actually get a full point or nearly a full point of increase in 2024 from the restatement. It's just that, you know, 100% margin coming through on the with that volume leverage, you get a full point. And so now as we're thinking about op margin, it may be that similar one to 200 points of expansion where we had kind of suggested before that it would be the gross margin plus something else on top of that. So that's what we're sorting through. I think the takeaway is absolutely see line of sight to margin expansion. Recognize that's something that's been a priority for us. And just want to, and we kind of end up in the same point end point that we've been expecting to, but now with a different jump off. And so that expansion year-over-year ends up being compressed at the operating margin level. It sounds like you're even more optimistic on the gross margin line. Yeah. Yeah. Instead of thinking 100-200 basis points off. Yeah. It's 50 points. We'll be able to work through that. Yeah. Absolutely. Yeah. Yeah. Okay. Anything specific you would point to? I know it's 50 basis points and. Yeah. No. So for next year, I mean, it will. I mean, one thing I'll highlight too is as it relates to profitability though, and I can go back to this a little bit more, but we will see some price lift. And I can share some more thoughts on price this second. But in terms of our margin expansion, we'll see some benefit from price. We'll continue to get volume leverage, right, as we grow. And then, you know, I'd say that the team just continues to build the muscle on generating, you know, I'll say good old-fashioned productivity, right, out in our factories. And we have what's called our Repligen Performance System, RPS. It's how we track our programs and our projects and, you know, factory by factory, you know, and we'll, and again, the thing I like to share is that this isn't a one-time, oh, let's get back to where we need to be. This is a muscle that good, you know, manufacturing, sophisticated manufacturing companies have year after year. And because every year you walk in with pressure from inflation, you walk in with pressure from salary increases for your labor, and you've got to offset that with productivity. And so that's how we see the kind of the equation playing out. And just back to price, because I know that's been a question as well. You know, we've typically seen 1%-2% price, I'll say net realization. And what do I mean by net realization? Meaning we always go out and raise, you know, I'll say our catalog or our list prices, and then it's a dialogue with customers, you know, around, okay, do they take that on or do they get a discount off of that? And certainly there's a lot of things that come into play. When we walked in the 2024, we assumed that market conditions would, I'll say, prevent us from seeing a lot of that falling through, right? And so we were very clear that our assumptions for the year were more of a, call it a flat price. I mean, the good news is that customers continue to see the value we're bringing. They see the, you know, the competitiveness that we offer. And therefore, we will end up now in 2024 with about 1%-2% price benefit. And that gets us kind of back to more of that normal run rate. And we feel like that also translates to sticking around in 2025. So that will be a part of that equation too. Okay, so that was a source of upside in 2024. Yeah. It's been a help for us as well with, you know, all the puts and takes on margin. And so that's definitely been a tailwind for us. Thanks. And then, you know, thinking about your growth opportunity over more of a midterm framework, what are the implications of the different revenue mix you have compared to your peer set? You're more clinically exposed and commercially exposed. Yeah. No, we have a lot of discussion about this one because, you know, okay, you're on the one side, once you've got a program hit the commercial, it's kind of a steady state flow. You're going to grow with whatever that market adoption is for the drug or, you know, or the treatment that you're supporting. And you love that because it kind of goes on autopilot. It's sometimes a lot more work, but you get a lot more opportunity and you get to really take a lot of different shots on goal with the clinical space. And that's where, again, we continue to see that companies see the value that Repligen can bring with starting in the clinical space and working through the phases and even being able to support even commercial if it gets there, right? Because not everything gets there, you know, and be able to scale up. And that scaling, I think, or that ability to scale, I think is what people really value with us. I also think that when you look at some of the products that we are bringing to market, you know, like our RS 10 that we just introduced this year, again, we're finding that a lot of companies, both, you know, smaller as well as bigger companies see the value it can bring in that clinical environment. And it also then allows where you've got, again, in the new modality space, especially where oftentimes that scaling isn't a scale up, it's a scale out, right? You might have multiple small, you know, lines, right? Especially for individualized medicine as an example. You know, you're not going to go from RS 10 to, you know, RS 30. You might have two or three or whatever RS 10s. And so again, we can fit into that different environment. And we bring a lot of great automation and differentiation and kind of, I'll say, upgrading that lab scale sort of product for the system. And so I think that's where we still will benefit. And we'll love to see the portfolio shift to the commercial because you get that flow. But I think the clinical is still going to be a big source of growth for us. Okay. If I tried to wrap that into some type of a spread versus industry growth rate, so let's say the industry is growing eight or the industry is growing 10, do you have an algorithm in mind about how much faster than industry Repligen ought to grow? I mean, we've typically been five to 10 points above market, you know, kind of call it pre-COVID. You know, we do believe that we still will get back there. I think it's just that timing. So whether you're five or 10 or when and, you know, how does the market look overall in 2025, again, a lot of great signs. But, you know, we need to kind of see how that plays out. And we still see 2025 is still a bit more of a transition, right? And certainly, you know, I talked about how we're thinking about it back to that low double-digit growth. But, you know, that differentiation and the market difference, you know, we have to see where that plays out. But absolutely, it's still part of the algorithm. And I mean, this is where you get some of the benefit of being maybe still the smaller player in the block in some areas as well. And, you know, we see that we're just continuing to take share, especially in that systems business. We've been really, really happy with the filtration systems business that we've had this year. And that really is, again, about bringing a differentiated, you know, products and adding different value. And that really is a, you know, a take share, you know, sort of play for us. It's not a, you know, building out what we have. And we see good momentum with, again, all sizes of companies around that too. You know, as I understand the industry, the share battles happening today really don't show up in anyone's P&L for another three to five years because the drugs matriculate to currently competing in process development. How do you feel like your share picture and your win rate and such is looking in those earlier phases, which is what's going to contribute to your revenue growth three to five years from now? Yeah. Again, it's back to what I was just saying, especially in that filtration system. That's where we do feel like we've got a really strong hit rate. And that we are taking share. And again, we're bringing, for us, we think differentiated products along a lot of different elements. It's the automation. And for example, the other thing that we really are excited about is we're adding in-line process analytics technology as well into the systems. And so, you know, Olivier talks about, he says, "Hey, you know, when iPhones came out, you're like, 'Why do I have a camera? I'm not going to, I've got my nice, you know, SLR I'm going to use. Why do I need that?'" Now, that's what we use every day. And you wouldn't buy, you know, an iPhone or a phone without that camera technology. And so that's the way we're thinking about what our process technology added to our systems brings. It's a, "Oh, that's a nice thing." And then, you know, years from now, you're not going to be able to live without it because of the real-time data that it gives you. And you can, you know, have that, I'll say, smart thinking about, "Well, how do I optimize my process real-time because I have real-time analytics? How do you view the biosimilar opportunity for Repligen? Yeah. We're excited about that. I mean, the reality is that when a lot of, you know, things came out and even the first round of biosimilars, we just didn't have the product offering that we do today. But, you know, as they now come up and companies, they're able to take a step back and look at their processes, right? Because as you, you know, again, it's back to the commercial conversation we're having. Once you get to commercial, everyone loves that process and you just kind of put it, you know, on autopilot, so to speak, and you don't want to change it. But when you have biosimilars come through, that gives, you know, companies a chance to say, "All right, are there other things that I want to do differently?" And so again, in an environment where we're offering products that increase yield, right, or increase efficiency, why wouldn't companies be looking at that opportunity when they have to kind of open up the books, if you will, and kind of redesign and look at opportunities around that? And so that's why we think, you know, biosimilars will continue to be a great source of opportunity for us. Do you have a path to get back to that 30% operating margin zip code that you enjoyed during COVID? I think we're continuing to look at what that feels like over time. You know, again, I absolutely see this clear path to margin expansion. We talked a little bit about for 2025 and that continues. You know, I think that we need to understand how the footprint of the business has changed, right? I mean, one bigger drag for us is just a little bit on the, you know, our proteins and that whole business, you know, enjoys, you know, above average margin rates. And we had a business that was, you know, by far majority, you know, proteins right from the start and has continued. That's not the case today, right? Because we had a lot of other offerings. And so I think that's one dynamic is understanding our product mix. I think too we're in this kind of space and phase of our company growth where, again, at our size versus some big players, you still need a lot of the same things, right? You still need a CFO, whether you're this size or this, right? You're right. And so there's this, you know, I'd say scaling and optimization of more of the OpEx level that you'll continue to get leverage on as we grow and grow. And so I have to understand what that horizon looks like, but I do see this path of, you know, kind of ongoing margin expansion. Okay. And then maybe in the final three minutes we have here, could you revisit the recent commentary on M&A? I think the investor community is largely struggling with what's the right deal for Repligen and how does that look like today versus what it looked like a few years ago? Yeah. So first and foremost, our strategy and our criteria and our lens is unchanged, right? It's number one, first and foremost is, can that company bring differentiated technology that we can't develop ourself as fast or, you know, with a higher return? Or can you get there faster? Can we add value to that, right? So again, a standalone company that looks great, but that we're not helping on commercial synergies or that we're not helping to integrate technologies, again, less of an interest for us. And then you get into all the financial metrics, right? Is it accretive to top line growth? Is it maybe not a growth accretive, but it's accretive at the margin rate? And certainly, of course, the overall return sort of view of the world and, you know, an EPS accretive and at what point in time. And you take all those elements and you're looking for targets and companies that meet as many as possible, right? But you may not get them that meet all of them. And so for us, and I think the dialogue that we've been trying to share and that Olivier's been talking about is, you know, we've been primarily smaller, you know, bolt-on, smaller targets. It's just as much work to do, or it's twice the amount of work to do to, I'll say, you know, $20 million revenues as it is to do, you know, $140, right? And it's literally twice the amount of work. And so how do we, at our stage of growth as a company, looking for some bigger targets that we can absorb easier, that we can still add value, that bring all that differentiation? That's where we're kind of saying we're at a stage where it may be a bigger number in the past. But that discipline and that criteria and the lens are really still consistent. Is there a timeframe over which you think, I know it's hard to predict, but where you might execute on one of these larger deals which would then, you know, give investors a better appreciation for what that looks like as we'll see it? Like, is that something you hope to do in a 12-month timeframe, a 24-month timeframe, or just more indeterminate? Look, I'll just say that we've got a healthy pipeline. You know, we've got a lot of, we have a lot of our views as to what, you know, great targets are out there. And then we certainly have a lot of people knocking on our door with, "Hey, here's some other things you may not have thought about." So it's healthy. And, but again, these things can take time to find the right, you know, deal. And again, what you might want may not be for sale, right? And then sometimes it's about, well, what is for sale? And again, then I'm back to, well, if that's all that's for sale, but it only meets four of my five criteria, is that okay, right? Or do I wait for that other one that's the five out of five that may not come or that will be highly competitive, you know, in a process? And those are the trade-offs, guys, that we're making every day on that. Fully understand. Great. Well, with that, we're out of time. Jason, Steven, thank you both for joining us this morning. Thanks, guys. Thanks, everybody. Take care.