Good morning, everybody. I'm Mahlouk Surguide. I cover life science tools and diagnostics here at Barclays. With me I have Jim Hippel, CFO of Bio-Techne, and David Clair, IR. I guess to start off, let's do the cleanup crew from some of the comments that were made yesterday. Interpretation is that the academic government market's hitting pretty hard on you guys and that the 3 Q's are going to be real soft. Just, you know, we want to kind of clean up some of the commentary. I appreciate the opportunity to spite the cleanup potential effort here. It's always a pleasure to be down here in Miami at this conference with you. Thanks for having us. Yeah, academic market and what's going on there and how they pertain to us. Let's start making it very clear with regards to what our exposure is, regardless of what your beliefs are with regards to the state of the academic market. Let's talk about our exposure, because I think it's been misinterpreted and misrepresented, perhaps, by a few publications out there. We've always said that 20% of our global revenue is academic, and roughly half of that is in the US, so call it 10%. We have always estimated, because it was difficult to tell exactly, we have always estimated that roughly half of our academic revenue is not directly, but indirectly influenced by NIH, meaning it comes from academic institutions that receive NIH funding. Obviously, with the announcements that came out in early February regarding what was then the freeze on reviewing new grants, as well as the proposed 15% cap on indirect costs, we said, you know, let's do a bottoms-up look at it and make sure we understand this for sure and what our exposure is. We took a look at what the database is and all the academic institutions in the US that receive NIH funding and mirrored that with our customer database, with over 1,000 customers, and took the assumption, the worst-case assumption, which was going out, was published by a couple of analysts back in early February, was that, my gosh, if this reduction comes into play, it'll probably have to be funded indirectly, have to be funded out of direct, and it might be as much as an 8% reduction in NIH, is kind of what was being floated out there. I said, all right, worst-case scenario, 8% reduction. Let's take a look at all of our TTM revenues from all of our customers that we know get NIH funding. Now, does all of our revenue from those customers come from NIH funding? No, but I can't differentiate from one or the other. Worst-case scenario, 8% reduction on all those customers, what would that look like long-term? It's about a 50 basis point hit, 50 basis points. It's a rounding error with regards to all the other moving parts we have in our business. That's to kind of level set the exposure. Let's talk about what's really happening now. Obviously, it's been a month. The The month of February has been a month of distraction, to say the least, for our customers and academics in the US, as a result of distraction for the tools companies that are providing them. Here are the facts, and I'll be very specific in terms of, you know, we use the words, well, it's gotten softer in February because of this academic. I mean, that's going to be natural, right? If it wasn't, you'd think we were relying. Let me give you a better sense of the magnitude. We started out in January with very solid growth in academic. It was actually better than it was in our second quarter. That momentum pretty much reversed, is how I'd put it. It reversed in February. Where we stand today, quarter to date, is about flat growth in our overall US academic revenue. More importantly, the first 10 days here of March, we're back to low single-digit growth. It is continuing to accelerate. You know, during all this distraction in February, yeah, it gave up the gains that we had in January, but now we're seeing it pick back up again here in March. I personally expect to see that continue to improve as the month continues and going forward, because I think there was a very important, very important message that was sent out of the NIH on Friday, which definitely calmed us down. You know, we're reaching out to our customers to see how they feel about it. I imagine it's going to calm them down as well, which is that the new incoming NIH director basically said, first day on the job on March 24, they're turning the spigot back on and reviewing NIH grants. Obviously, that's a big relief, because the longer if that was going to be hung up on the courts or the longer it was going to take for that to get re-engaged, the more of a potential air pocket there'd be in the future. Now we're talking about a month or two, max, not a big deal. That is a huge relief. It should relieve a lot of anxiety from some of our academic customers who were thinking about their next grant down the road. Secondly, in the same statement, they said that it was also going to take a hard look at the 15% cap reduction and understand kind of the impact of that, which is, to me, code for it's open for some negotiation. Yeah. About that 15% cap reduction, another thing I think is misconstrued about it is if you actually read the actual document that came out of the NIH in that initial February announcement, it basically said, not that they were going to cut NIH funding, but they were going to use the money that was previously earmarked for indirect, and they're going to refund that back into additional direct NIH funding grants. You can very easily make the argument, and finding their argument, it's actually in the writing, that their intention is actually to increase the level of funding for NIH directly, not decrease it. I know some of the pushback on that would be, then how are academic institutions going to cover this indirect cost if it doesn't come out of some other direct funding bucket? Some of the feedback we've heard from our customers, and it's consistent with some of what I've heard certain analysts have written some reports recently on their feedback from academic customers, is that, you know, is 15% a bit probably too much of a cap? Some of these caps or some of these indirect reimbursements that some of these universities were getting, some of our own customers were shocked to hear that peer institutions were getting so much. That is 60%. Yeah, 60% plus kind of things. I can tell you firsthand, I visit a lot of these customers myself. I've been through their institutions, and I always joke that their cafeterias look nicer than the place I take my wife for dinner, and some have nice zen gardens and everything else, right? These indirect funds often go into a general fund that can be used for anything. To think that this is somehow going to have a drastic reduction in NIH funding, I think everyone's got it wrong. I think if the administration actually works this out, it comes to an arrangement where it's fair for everybody, it could be an increase in NIH funding across the board. It's the uncertainty in the meantime that causes anxiety and causes concern. February, I think, was that month, but it appears as though we're past that. With an incoming new NIH director and kind of settling the dust a little bit, I think it's only going to get better from here. When you're thinking about redeploying that, it's like the $4 billion in savings, right, into direct funds. Arguably, you're going to go towards the bleeding edge of all the research, right? Proteomics, you have multiomics, the spatial stuff. That should be also beneficial to how you guys are set up. Walk us through kind of the new products, or obviously Lunaphore with the spatial, and how that's been playing out with you guys. Now that you're starting to see it come back in March, like up to low singles, are these ongoing? Obviously, there are work that were ongoing grants that were just kind of paused. As that kind of continues to build momentum, where in your portfolio do you see that kind of playing out first? Yeah, first of all, thanks for mentioning that, because the analogy I always use, and I try to explain this to others outside the company, is with NIH funding, when it goes up and it goes down, kind of all boats rise, and all boats may drift down a bit. What is, and we've been saying this for years, what's most important to us, to our company, is where the current in the water is. Honestly, for the last three or four years, through all the COVID years, when double-digit increases in NIH funding were occurring, we weren't in the current. We were growing, but we weren't growing double-digit in academic. Why? Because most of that extra funding was being directed towards COVID research, infectious disease research, vaccine development. That's not our wheelhouse. That's not our strength of our portfolio. Our strength in our portfolio is around chronic disease. By the way, that's where the administration has been very public in saying that's where they want to refocus and reprioritize all their funding, including NIH grants, is around chronic disease. They have specifically called out cancer, oncology. They have called out diabetes. They have called out neurology. Guess what? Those are probably the three top areas of applications where our tools and reagents are used. What is way more important for us as a company is getting back in that current. As a company, we are much less concerned about the absolute levels of NIH funding, as long as they are not draconic reductions, than we are about where that money is being spent. We are very encouraged about the future with regards to at least what is being said about what the priorities would be for that spending going forward. Our applications are all geared towards those, towards oncology, towards spatial. You mentioned COMET, for example. We think we're extremely well positioned to benefit from that. Kind of the same vein of thinking on the biopharma side, right? You guys have always been a bigger push into cell therapy and some of the newer modalities. Biopharma with the restructuring. You have biotech as obviously still biotech right now. Talk about from the demand perspective that you guys have seen there. You've had a pretty big step up there in the last quarter, some continued improvement. Talk about demand across that. Biopharma, so biotech and big pharma combined make up 50% of our revenue. By far, it's our largest and most important end market. Of that 50%, as a reminder, roughly 20% is smaller biotech, and roughly 30% is what we call larger pharma customers. Our hypothesis, which set for our kind of soft guidance back in August for our fiscal year 2025, was kind of a staggered approach to recovery, where we would start to see the smaller biotech momentum increase in our second quarter, which is the December quarter. That was really predicated on the fact that there's been a nice step up in funding in biotech throughout 2024 relative to 2023, and even relative to pre-COVID, and that that funding would eventually start turning to spending by the time we got to the end of our calendar year 2024. Following that, in our third quarter, which we are in right now, would be a flip on China from being negative growth to positive growth, so no longer being the big headwind that it was to our growth rate. The last step to the staircase on the road to recovery was the large pharma, which at the time we had hypothesized would start to show strength for us in our Q4, the June quarter, simply because, going back as to why, why we think pharma is poised for recovery in our space, is that if you step back even further, pharma is not trying to recover. Pharma is doing great, really, as a whole. The pharma sector is doing fine. What 2024 was, was a year of reprioritization of their pipelines, largely due to the IRA Act. They reprioritized from a less risk to a less risk from a more risk kind of portfolio, meaning more on downstream clinical activities, less on discovery. It does not mean they cut discovery completely, because that is their future, but they just brought that pendulum back from maybe where it was geared more towards the higher risk funding during the COVID days. If you actually look, the amount of R&D increases that our pharma customers spent last year in 2024 increased at a pretty good clip. It was just more narrowly focused toward that clinical stage activity, which does not necessarily go to tools companies. Running clinical trials are very expensive, and it goes to other types of costs other than just tools and supplies, right? Our thesis was that after that normalization of their pipeline, they would go back, they'd still have the normal increases that they typically have, because they're doing fine financially, but that those increases would be spread more evenly across their entire R&D portfolio, not just shuffled towards one end of it. We would not see that as a company more than likely until the March-April time frame, because you got to remember, our customers, even at big pharma, for the most part, who we interact with and who actually makes the purchasing decision is the individual lab person in the wet lab at the bench. By the time those budgets get approved, these big companies and get circulated all the way down to the person in the lab, it often takes a few months, right? That was the thesis. From an overall perspective, it's played out very well. In fact, we're ahead of schedule, right? We grew mid-single digit in Q1 when we were expecting to grow low single digit. We grew 9% in Q2. Admittedly, we talked about the fact that we had some large customers, particularly in cell therapy, but also in our diagnostics reagent OEM business, that we had forecasted for us to deliver that in our third quarter, but called us up in mid-November and said, we're ahead of schedule. We want to take delivery now. I don't see that as a bad thing. I see that as a good thing. When you adjust for that, we still grew in the high range of the mid-single digits in our second quarter, which is more or less where we got it to. If you ask what's changed from or what's different from our assumptions, it's a little bit of the mix of it. So biotech, in fact, the smaller biotech has gradually improved. We started to see that in early September and continued into October. What surprised us was that the large pharma started to show a momentum shift, call it mid-November, and it actually outpaced our biotech. That surprised us a bit. What we were hearing from our customers is that all year long, they had these purchases for whether it was large bulk purchases for reagents for a new project they want to start or even instrumentation. It was in their budget, but they were told all year they couldn't spend it. It never got approved. They made one last run of it in November, and their evil CFOs let it go through. The good news is we saw that kind of continue all the way in through to January to where we're at today. I give you that detail because how I think about that is that we get questions around, well, is this a big budget flush and spend it or lose it kind of thing. That's not what our customers were saying. We've heard that in the past before as well, where there's this edict coming down from middle management that says, hey, there's rumors that we're not going to get budget next year, so spend everything you got. That was not the message. The message was we had this in our budget all year long. We went ahead and set it up. We sent it up the giant chain and it got approved. Now, I can just tell you as an evil CFO myself, sitting in my customer shoes, if I was really concerned about what the budget spend was going to be for discovery and other projects next year, I would not be giving these false pretenses to my team that they can now spend now. We saw it as an early indicator that our thesis is hopefully correct. Again, the momentum we have seen in the early part of calendar 2025 has not deterred us from that thesis. It's not really that that was the fear, is what you're saying. It's like essentially a pull forward, a budget flush. We're not going to get it next year. I think the reaffirming of our guidance for the back half of the year says just that, Luke, because I think what was also missed is that this was not just a reaffirmation. It was actually a beat and a raise. Because if we had thought it was going to continue at the pace that we thought back in August, we would have actually guided Q3 to be lower, low single digits, perhaps, because of these large orders that were originally in our forecast that came out of it. That is not what we guided to. We guided to mid-single digit growth, which is more or less consistent with what our guidance has been from the get-go. We actually messaged strength and momentum improving as opposed to the other way around. Now the order book has kind of shaken out over the quarter. That momentum, you said, is just continuing and building on each other. Like that back half, you feel a lot more confident then? Yeah, I mean, we'll see how it works in your mouth. Right, I'm looking towards my mouth, but at the end of the day, what we're seeing right now is consistent with what we've been messaging, frankly, all year, and definitely consistent with what we messaged at the end of January. The only thing we didn't know at the end of January was that two days later, these edicts from NIH were going to come down, but we've already discussed that. I think a lot of that is behind us now. It's a relatively small part of our business, and for the most part, can be mitigated. Sounds good. Let's talk about a little bit of a competitive landscape on the antibody side. You're one of the big four. I always describe it big four, big five. Talk about pricing and competitive dynamics there, where you guys are seeing your share gains, particular customer set, or is it from a particular modality, and then how that bleeds into the GMP side on your proteins and how those two play off? Yeah, I mean, as you mentioned, antibodies are probably one of the most competitive pieces of our business. The lucky good thing for us, there's not any one product category that makes up such a huge majority of our portfolio that if it ever became a problem, it's going to bring your company down or anything like that. Obviously, antibodies is an important part of our portfolio, the most competitive. I would say the competitive dynamics aren't no different now than they've been in the 11 years now that I've been with Bio-Techne. We have some very formal competitors, but I think we hold our ground more than hold our ground very well. It's becoming harder to track, admittedly, because a lot of former public companies that were antibody companies are now no longer visible from an external perspective in terms of how they're really doing. While they were public, we know we were taking share. We know that we were incrementally taking share from those companies. Based on whatever intelligence we have today, both from fellow investors, analysts, peers, customers, there is nothing to suggest that has changed. When it comes to, it is different by region to some extent, but in the Western markets, like the US and Europe, we are very competitive from a price perspective for what I would call the high-quality premium antibodies. We are not the price leader by any means. Where our antibodies are kind of specialized, which is around those that are used to detect cytokines, which is our specialty in proteins, we are extremely strong there and absolutely known for our quality. It is very reassuring. I will use an example. We were just in China in December and visited customers like we always do. In China in particular, when the economy is down and things are tough there from a budget perspective, you become even more hypersensitive to competition and even local competition, right? We asked the customers, every customer we went to, we asked towards the end of the conversation, if you do not mind sharing what drives your purchasing behavior. What are your top three or four or five things? Almost verbatim consistently across the customer base, and this is in China, number one, quality. Number two, availability, being that it is China, that can be a problem sometimes. Number three, the broadness of your portfolio. Number four, price. Number five, is it locally made or not? That was almost hands down the criteria in order. At the end of the day, what you got to step back and remember is scientists are scientists no matter where they reside in the world, and they want their experiments to work and work the first time. It gave us some reassurance that even in the tough times that China is facing right now, we're still very competitive in the antibody world. On China, a lot of on the diagnostic side, we see increasing competition from local players there. Give us the landscape there from you just kind of walk through it a little bit. Are you seeing increased competition from local Chinese players in some of your pieces of your business? Where do you think that your portfolio would be at most at risk there and where you kind of have your moat? Honestly, it's similar for China as it is everywhere globally. I mean, the most competitive part of our portfolio is antibodies globally, as well as it is in China. It's arguably nothing's easy in our portfolio to make, but it's arguably the easiest thing to make. There are a lot of small antibody companies in China. There's still hardly any that are nearly close to the breadth of what we can offer and some of our larger peer companies can offer. That's probably the more competitive space. Proteins will probably be second, but even there, there's only maybe one or two notable players that even have business in the West as well. We see them more as global players than China-specific players. When it comes to our instrument portfolio, which by the way, in China, we have our heaviest concentration of instruments. It's more like 50% of our business as opposed to 10% globally everywhere else. For the most part, our platforms don't have much in the way of competition, globally, much less in China. The CapEx environment has been tough globally everywhere, as it has been for us. The consumables that are unique to our instruments, that are needed to run our instruments, have grown double digit, eight out of nine last quarters. They grew high teens last quarter. By the way, this is true for China as well. Even though China overall has been depressed, it shows that the value our instruments bring to our customers even in China. We are very excited that when the markets come back, and we think that's starting to turn now, we'll see some pent-up demand for some instruments because the capacity, I would think, is starting to run pretty low. Yeah, on the stimulus side with China, we've heard from peers that they're starting to see a lot of those bookings and orders start coming through for the higher-end CapEx equipment. You guys kind of fit in that mid to smaller range of that CapEx side. Talk about the order book from the stimulus and how you see this time playing out differently than in your past. Yeah, so one thing is I hate to even call it really stimulus because traditionally in China, when there was stimulus, it was almost like a blank check. And then every life science tool company would see a 30% or 40% growth. I don't know if you guys might see only a 10% or 15% growth. But we'd see a 30%-40% pop, and then it would settle back down again. We definitely validated this when we were there in December. This is a very, very targeted program to upgrade technological equipment across many industries across China. As it pertains to life sciences, it's very specific that you basically have to demonstrate that you're decommissioning an instrument and replacing it with one with higher technology. You have to prove essentially to the government its technological merit. It is very niche and very narrow. Yeah, the higher-end instrumentation is going to be more applicable to them. For us, we have our three instrument lines. We got Maurice for biologics. We have Simple Western, and then we have our Simple Plex. Simple Plex is still relatively new, so there's nothing really there to upgrade. Maurice did replace iCE instruments, but China loves our biologics instrumentation, and they replaced all their iCEs right away. There's not a whole lot there to replace. Our Simple Western, there's still some Chinese customers that have the old West's instrument box that we decommissioned. That's where we're actively working with our customers to upgrade them to Jess. We've been asked the question, how do you know so much about the industry about what's going on with stimulus? Because it seems like certain companies, I'm not saying all, but have been more kind of ambiguous about it. It's really because, at least in our case, we actually have to go with our customers and help them fill out the applications so that we can say, here's what's different. Here's why it's technologically better, etc. That all being said, it's not a big needle mover. This is not going to be a big spike, but it does provide a nice base as we head into 2025 to work from. We actually saw a couple of those orders come through in Q2. We're going to see a few more come here in Q3. The bulk will probably happen in our Q4. What's more important is when we were in China in December, we were hearing not only from our team, but also from our customers that the National Academy of Sciences, which is kind of the equivalent of NIH for China, for the first time in probably a couple of years, was starting to message that they're encouraging the submission of grants. They haven't heard this for a long time. It is an early indication that finally China might start to be getting back to a more normalized funding pattern of grants throughout their country. We haven't seen it yet, and we were told not to expect to see it until sometime after the Chinese New Year, that month-long celebration. We are kind of there now, and we'll see if that starts to materialize. Our teams there definitely feel as though China has bottomed. We're hoping to get into the black here in our Q3. It'll be probably a mid-single digit growth year in calendar 2025, but a nice gradual steady improvement. Long term, we still have a lot of faith in China. Never count China out. At the end of the day, they have 1.2 billion people. They're still well behind in healthcare relative to the rest of the world. They've been very public about their statements that they want to be a leader globally, much less in Asia. They got a long ways to go, and they need Western tools companies to help them get there. Great. Thank you. That's all the time we have. All right. Feels like the momentum is kind of coming back and building. It is in this room. I'll tell you that. All right, Louk. Thanks so much. I appreciate it. Appreciate it.