Quidelortho Corporation
02/19/2026 | Press release | Distributed by Public on 02/19/2026 05:03
Annual Report for Fiscal Year Ending December 28, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve material risks and uncertainties. This discussion should be read in conjunction with the section entitled "Future Uncertainties and Forward-Looking Statements" on page 4and the "Risk Factors" starting on page 26of this Annual Report. In addition, our discussion of QuidelOrtho's financial condition
and results of operations in this Item 7 should be read in conjunction with our Consolidated Financial Statements and the related Notes included elsewhere in this Annual Report.
Overview
Our vision is to advance diagnostics to power a healthier future. With our expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine, we aim to support clarity for clinicians and patients to help create better health outcomes. Our global infrastructure and commercial reach support our customers across more than 140 countries and territories with quality diagnostics, a broad test portfolio and market-leading service. We operate globally with manufacturing facilities in the U.S., U.K. and China and with sales centers, administrative offices and warehouses located throughout the world.
We manage our business geographically to better align with the market dynamics of the specific geographic regions in which we operate, with our reportable segments being North America, EMEA, China, JPAC and Latin America. We generate our revenue in the following business units: Labs, Transfusion Medicine (Immunohematology and Donor Screening product categories), Point of Care and Molecular Diagnostics. We also generate non-core revenue, including through our contract manufacturing business and certain business collaborations, which accounted for $112.9 million, $94.2 million and $125.0 million for fiscal years ended 2025, 2024 and 2023, respectively.
For fiscal year ended 2025, Total revenues decreased by 2% to $2,730.2 million as compared to the prior year. For fiscal year ended 2024, Total revenues decreased by 7% to $2,782.9 million as compared to the prior year. These decreases were primarily driven by variability of our U.S. respiratory products, mainly due to a decrease in COVID-19 revenues, partially offset by an increase in flu revenues. Currency exchange rates did not significantly impact our growth rate for fiscal year ended 2025. Currency exchange rates had an unfavorable impact of approximately 60 basis points on our growth rate for fiscal year ended 2024. Our revenues can be highly concentrated over a small number of products, including certain of our respiratory products. For fiscal years ended 2025, 2024 and 2023, revenues related to our respiratory products accounted for approximately 15%, 18% and 24% of our Total revenues, respectively. The respiratory products revenue included revenue related to COVID-19 of $80.2 million, $184.9 million and $409.1 million for fiscal years ended 2025, 2024 and 2023, respectively.
Wind-Down of U.S. Donor Screening Portfolio
In February 2024, we initiated a wind-down plan to transition out of the U.S. donor screening portfolio. Specifically, we are winding-down the VIP platform and microplate assays, which are only sold in the U.S. and have a lower growth and margin profile. This wind-down will not affect any donor screening portfolio outside of the U.S. While we wind-down this U.S. donor screening portfolio, we will continue to support our existing customers and honor our contractual commitments. The winding-down of the U.S. donor screening portfolio, as compared to the prior years, contributed to the decline in revenue with a margin lower than our overall margin. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 3. Revenue" for more information. The wind-down of our U.S. donor screening portfolio is expected to be substantially complete by the first half of 2026.
Restructuring and Other Charges
In the second quarter of 2025, we launched multi-year, enterprise-wide cost-reduction, strategic productivity and margin improvement initiatives (the "Optimization Plan") that aim to (i) realign our costs with our long-term revenue expectations, (ii) drive operational efficiencies in manufacturing and distribution cost bases and (iii) support and align with our strategy to invest in key priorities. The cumulative pre-tax charges to be incurred by us to implement the Optimization Plan are expected to be approximately $100 million through 2027. The Optimization Plan is expected to deliver net cost savings of approximately $50 million to be achieved through 2027. The key initiatives of the Optimization Plan are:
•Rationalization and consolidation of facilities to reduce operational costs, improve processes, and optimize resource allocation;
•A structured approach to procurement to drive identified sourcing cost savings; and
•A distribution rationalization plan, mainly in EMEA, to streamline a complex corporate structure to reduce costs and improve efficiency.
We continue to monitor our operations for cost-reduction, strategic productivity and margin improvement opportunities to streamline our operations globally and identify additional cost savings. We may expand our cost-reduction, strategic productivity and margin improvement initiatives in the future, the costs of which could be material.
Additionally, in the second quarter of 2025, we announced a strategic refocusing of our Molecular Diagnostics business, including our plan to discontinue the development of the SAVANNA platform, which exit we expect to be substantially complete by the first half of 2027, and our intent to acquire LEX Diagnostics.
Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 17. Restructuring, Integration and Other Charges" for further details regarding these actions.
Recent Macroeconomic Trends and Challenges
In April 2025, the U.S. announced tariffs on imports from most countries, including significant tariffs on imports from the U.K., Canada, Mexico and China, leading to increasing trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. In addition, the U.S. has announced potential new tariffs and related tariff actions affecting companies in the pharmaceutical and biotechnology industries, including a Section 232 national security investigation of imports of personal protective equipment, medical consumables, and medical equipment, including devices. These actions and the related rising political tensions could negatively impact global macroeconomic conditions and the stability of global financial markets. Currently, as a result of recently effected tariffs, we are incurring incremental costs of parts and materials that we use to produce products, as well as incremental costs to ship finished goods to customers. Although the Company plans to, and we have thus far, substantially offset such incremental costs through operating measures, including supply chain adjustments, current and future tariffs could have a material adverse effect on our business, financial condition and results of operations, including through increased supply chain costs. While trade negotiations are ongoing and certain bilateral trade deals have been announced, there remains substantial uncertainty about the duration of existing tariffs, tariff levels, implementation of announced tariffs or imposition of additional tariffs, the potential implications of the Section 232 investigations, litigation challenging tariffs and whether additional tariffs or retaliatory actions may be imposed, modified or suspended. We continue to closely monitor these events as they unfold and assess their potential impact on our operations to inform our response strategy.
Outlook
Our financial performance and results of operations will depend on future developments and other factors that are highly uncertain, continuously evolving and unpredictable, including the occurrence, spread, severity, duration and emergence of new variants of respiratory diseases, including flu, strep, RSV and COVID-19.
Demand for our respiratory products, which includes our COVID-19 products, declined in 2025 compared to 2024 due to the continued decreased occurrence, severity and duration of COVID-19 in an endemic environment. We expect overall demand for our non-respiratory and respiratory products to continue to fluctuate and pricing pressures on certain products to persist as a result of a number of factors, including increased supply, emergence and spread of new variants, and the demands of the respiratory season, which are variable and typically more prevalent during the fall and winter.
A recent research report was issued regarding the potential for the adoption of a dry chemistry VBP program in the Jiangxi province of China. At this time, we have no indication that such a program will be implemented or if our products would be included in such a program. Should this occur, we would seek to implement remediation efforts to offset potential costs. Based on current information, we believe that any potential business impact would likely be insignificant to our total annualized revenue.
Because our business environment is highly competitive, our long-term growth and profitability will depend in part on our ability to retain and grow our current customers and attract new customers through developing and delivering new and improved products and services that meet our customers' needs and expectations, including with respect to product performance, product offerings, cost, automation and other work-flow efficiencies. We expect to continue to evaluate strategic opportunities to (i) expand our product lines and services, production capabilities, technologies and geographic footprint and address other business challenges and opportunities, and (ii) rationalize and consolidate facilities with the goal to improve our long-term results.
While we expect the revenues and financial results from our non-respiratory and respiratory products to be affected by the highly competitive environment and our respiratory products to be affected by the demands of the respiratory season, we intend to continue our focus on prudently managing our business and delivering improved financial results, while at the same time striving to introduce new products and services into the market.
Results of Operations
Comparison of fiscal years ended 2025, 2024 and 2023
Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31. Fiscal years ended 2025, 2024 and 2023 were 52 weeks.
Revenues
The following table compares Total revenues by business unit for fiscal years ended 2025, 2024 and 2023:
| Fiscal Year Ended | |||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 |
2024(1)
|
2023(1)
|
% Change
2025 vs. 2024
|
% Change 2024 vs. 2023
|
||||||||||||||||||||||||
| Labs | $ | 1,505.7 | $ | 1,427.2 | $ | 1,425.8 | 6 | % | - | % | |||||||||||||||||||
|
Immunohematology(2)
|
543.8 | 522.0 | 512.0 | 4 | % | 2 | % | ||||||||||||||||||||||
|
Donor Screening(2)
|
52.6 | 115.1 | 135.9 | (54) | % | (15) | % | ||||||||||||||||||||||
| Point of Care | 601.6 | 694.6 | 892.4 | (13) | % | (22) | % | ||||||||||||||||||||||
| Molecular Diagnostics | 26.5 | 24.0 | 31.7 | 10 | % | (24) | % | ||||||||||||||||||||||
| Total revenues | $ | 2,730.2 | $ | 2,782.9 | $ | 2,997.8 | (2) | % | (7) | % | |||||||||||||||||||
(1) Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
(2) As a result of the wind-down of the U.S. donor screening portfolio, the Transfusion Medicine business unit is shown in its two product categories: Immunohematology and Donor Screening.
For fiscal year ended 2025, Total revenues decreased to $2,730.2 million from $2,782.9 million for the prior year. Labs revenue increased 6% compared to the prior year, primarily due to growth in reagents, consumables and services, partially offset by a decline in instrument revenue. Immunohematology revenue increased 4% compared to the prior year, primarily due to reagent growth. Donor Screening revenue decreased 54% compared to the prior year, primarily due to the wind-down of the U.S. donor screening business. Point of Care revenue decreased 13% compared to the prior year, primarily due to decreases in sales of QUICKVUE SARS and SOFIA SARS Antigen assays. Molecular Diagnostics revenue increased 10% compared to the prior year, driven by higher SAVANNA revenue. Currency exchange rates did not significantly impact our growth rate for fiscal year ended 2025.
For fiscal year ended 2024, Total revenues decreased to $2,782.9 million from $2,997.8 million for the prior year. The increase in Labs revenue was primarily related to growth in reagents, consumables and services, partially offset by decreased COVID-19 and non-core revenue compared to the prior year. Immunohematology revenue increased 2% compared to the prior year, primarily due to reagent growth. Donor Screening revenue decreased 15% compared to the prior year, primarily due to the wind-down of the U.S. donor screening business. The Point of Care business unit contributed to revenue decline, driven by a decrease of $188.6 million in sales of QUICKVUE SARS Antigen assays, primarily due to a COVID-19 government award in the prior year, and a decrease of $5.8 million in sales of SOFIA SARS Antigen assays. Molecular Diagnostics sales decreased by $7.7 million, primarily driven by lower demand. Currency exchange rates had an unfavorable impact of approximately 60 basis points on our growth rate for fiscal year ended 2024.
Cost of Sales, Excluding Amortization of Intangible Assets
Cost of sales, excluding amortization of intangible assets, was $1,456.0 million, or 53.3% of Total revenues, for fiscal year ended 2025, compared to $1,496.4 million, or 53.8% of Total revenues, for fiscal year ended 2024. The decrease in cost of sales, excluding amortization of intangible assets as a percentage of revenue, was driven primarily by procurement-related cost-savings initiatives actioned in 2024.
Cost of sales, excluding amortization of intangible assets, was $1,496.4 million, or 53.8% of Total revenues, for fiscal year ended 2024, compared to $1,500.7 million, or 50.1% of Total revenues, for fiscal year ended 2023. The increase in cost of sales, excluding amortization of intangible assets as a percentage of revenue, was driven primarily by product mix, partially offset by a prior year COVID-19 government award, along with the corresponding inventory reserve release of $39 million.
Operating Expenses
The following table summarizes operating expenses for fiscal years ended 2025, 2024 and 2023:
| Fiscal Year Ended | |||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 |
% of Total Revenues |
2024 |
% of Total Revenues |
2023 |
% of Total Revenues |
|||||||||||||||||||||||||||||
| Selling, marketing and administrative | $ | 746.3 | 27.3 | % | $ | 766.8 | 27.6 | % | $ | 763.2 | 25.5 | % | |||||||||||||||||||||||
| Research and development | 186.2 | 6.8 | % | 218.7 | 7.9 | % | 245.0 | 8.2 | % | ||||||||||||||||||||||||||
| Amortization of intangible assets | 189.2 | 6.9 | % | 203.4 | 7.3 | % | 204.8 | 6.8 | % | ||||||||||||||||||||||||||
| Restructuring, integration and other charges | 263.6 | 9.7 | % | 127.2 | 4.6 | % | 113.4 | 3.8 | % | ||||||||||||||||||||||||||
| Goodwill impairment charge | 700.7 | N/M | 1,822.6 | N/M | - | N/M | |||||||||||||||||||||||||||||
| Asset impairment charge | 9.7 | N/M | 56.9 | N/M | 4.5 | N/M | |||||||||||||||||||||||||||||
| Other operating expenses | 97.7 | 3.6 | % | 51.8 | 1.9 | % | 27.1 | 0.9 | % | ||||||||||||||||||||||||||
* N/M - Not meaningful
Selling, Marketing and Administrative Expenses
Selling, marketing and administrative expenses for fiscal year ended 2025 decreased by $20.5 million, or 2.7%, to $746.3 million from $766.8 million for the prior year, primarily due to lower costs of outside services and lower compensation costs related to cost-savings initiatives actioned in 2024.
Selling, marketing and administrative expenses for fiscal year ended 2024 increased by $3.6 million, or 0.5%, to $766.8 million from $763.2 million for the prior year, primarily due to higher incentive-based employee compensation costs, partially offset by compensation costs related to cost-savings initiatives and lower advertising costs.
Research and Development Expense
Research and development expense for fiscal year ended 2025 decreased by $32.5 million, or 14.9%, to $186.2 million from $218.7 million for the prior year, primarily due to lower third-party material and outside service spend, compensation costs and clinical costs related to cost-savings initiatives actioned in 2024.
Research and development expense for fiscal year ended 2024 decreased by $26.3 million, or 10.7%, to $218.7 million from $245.0 million for the prior year, primarily due to lower employee compensation costs and costs of outside services.
Amortization of Intangible Assets
Amortization of intangible assets for fiscal years ended 2025, 2024 and 2023 was $189.2 million, $203.4 million and $204.8 million, respectively. The decrease in amortization expense in fiscal year ended 2025 compared to fiscal year ended 2024 was primarily driven by intangible assets that became fully amortized by the end of 2024.
Restructuring, integration and other charges
Restructuring, integration and other charges were $263.6 million, $127.2 million and $113.4 million for fiscal years ended 2025, 2024 and 2023, respectively. The increase in costs in fiscal year ended 2025 compared to fiscal year ended 2024 was primarily driven by restructuring and other charges. The increase in costs in fiscal year ended 2024 compared to fiscal year ended 2023 was primarily due to integration charges related to employee compensation and consulting costs. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 17. Restructuring, Integration and Other Charges" for more information.
Goodwill Impairment Charge
During fiscal years ended 2025 and 2024, we recognized non-cash goodwill impairment charges of $700.7 million and $1.8 billion, respectively. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 8. Goodwill and Intangible Assets, Net" for more information.
Asset Impairment Charge
During fiscal years ended 2025 and 2024, we recognized impairment charges of $9.7 million and $56.9 million, respectively, related to the long-lived assets classified as assets held for sale. Refer to Part II, Item 8, "Financial Statements and
Supplementary Data-Note 7. Assets Held for Sale" for more information. Asset impairment charge was $4.5 million for fiscal year ended 2023.
Other Operating Expenses
Other operating expenses were $97.7 million, $51.8 million and $27.1 million for fiscal years ended 2025, 2024 and 2023, respectively. The increase in costs in fiscal year ended 2025 compared to fiscal year ended 2024 was primarily related to (i) the contract termination cost of $65 million and (ii) the legal accrual in connection with the resolution of a contractual dispute, partially offset by (iii) a $20.0 million write off of the tax assessment refund in fiscal year ended 2024 and (iv) decline in profit sharing expense for our Joint Business. The increase in costs in fiscal year ended 2024 compared to fiscal year ended 2023 was primarily related to the $20.0 million write off of the tax assessment refund. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 3. Revenue" for information related to the contract termination cost and -Note 4. Segment and Geographic Information" for more information.
Non-operating Expenses
The following table summarizes non-operating expenses, net for fiscal years ended 2025, 2024 and 2023:
| Fiscal Year Ended | |||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 |
% Change
2025 vs. 2024
|
% Change 2024 vs. 2023
|
||||||||||||||||||||||||
| Interest expense, net | $ | 177.6 | $ | 163.5 | $ | 147.6 | 8.6 | % | 10.8 | % | |||||||||||||||||||
| Loss on extinguishment of debt | 5.1 | - | - | N/M | N/M | ||||||||||||||||||||||||
| Other expense, net | 5.8 | 7.1 | 20.6 | (18.3) | % | (65.5) | % | ||||||||||||||||||||||
* N/M - Not meaningful
Interest Expense, Net
Interest expense, net was $177.6 million, $163.5 million and $147.6 million for fiscal years ended 2025, 2024 and 2023, respectively. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 9. Borrowings" for more information.
Loss on Extinguishment of Debt
Loss on extinguishment of debt was $5.1 million for fiscal year ended 2025, and was related to the termination of the Prior Credit Agreement. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 9. Borrowings" for more information.
Other Expense, Net
Other expense, net was $5.8 million, $7.1 million and $20.6 million for fiscal years ended 2025, 2024 and 2023, respectively. The decrease in Other expense, net in fiscal year ended 2025 compared to fiscal year ended 2024 was primarily related to Prior Credit Agreement amendment fees in the prior year, partially offset by net foreign currency losses. The decrease in Other expense, net in fiscal year ended 2024 compared to fiscal year ended 2023 was primarily related to (i) a prior year release of tax reserves upon the settlement of certain U.S. federal tax matters, with an offsetting benefit recorded to income tax expense, and (ii) Prior Credit Agreement amendment fees, partially offset by loss on investments in the prior year. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 5. Income Taxes" for more information.
Income Taxes
For fiscal years ended 2025 and 2024, we recognized income tax expense of $24.1 million in relation to loss before taxes of $1,107.7 million and an income tax benefit of $79.5 million in relation to loss before taxes of $2,131.5 million, resulting in effective tax rates of (2.2)% and 3.7%, respectively. For fiscal years ended 2025 and 2024, the effective tax rate differed from the U.S. federal statutory rate primarily due to goodwill impairment charges that were nondeductible for tax purposes.
We recognized an income tax benefit of $79.5 million, resulting in an effective tax rate of 3.7% for fiscal year ended 2024, compared to an income tax benefit of $19.0 million, resulting in an effective tax rate of 65.3% for fiscal year ended 2023. For fiscal year ended 2023, the effective tax rate differed from the U.S. federal statutory rate, primarily due to a decrease in our pre-acquisition U.S. federal reserves for uncertain tax positions due to settlement of certain tax matters partially offset by net operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances and Global Intangible Low-Taxed Income.
On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Our results for the fiscal year ended 2025 include the impacts of OBBBA on our Consolidated Financial Statements.
Segment Results
We operate under five geographically-based reportable segments: North America, EMEA, China, JPAC and Latin America. Beginning in the fourth quarter of 2025, we determined that the JPAC segment, previously included in "Other," meets the quantitative thresholds for separate reporting under ASC 280. This determination was based on JPAC's segment revenue exceeding 10% of the combined reported segment revenue. As Latin America is the only remaining immaterial operating segment, results are reported separately. This change in segment reporting did not have an impact on our previously reported Consolidated Financial Statements. Prior periods have been revised to align with the current period presentation.
The key indicators that we monitor are as follows:
•Total revenues - This measure is discussed in the section entitled "Results of Operations."
•Adjusted EBITDA - Adjusted EBITDA by reportable segment is used by our management to measure and evaluate the internal operating performance of our reportable segments. It is also the basis for calculating certain management incentive compensation programs. We believe that this measurement is useful to investors as a way to analyze the underlying trends in our core business, including at the segment level, consistently across the periods presented and to evaluate performance under management incentive compensation programs. Adjusted EBITDA consists of Net loss before Interest expense, net, Provision for (benefit from) income taxes and depreciation and amortization and eliminates (i) certain non-operating income or expense items, and (ii) impacts of certain non-cash, unusual or other items that are included in Net loss and that we do not consider indicative of our ongoing operating performance. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 4. Segment and Geographic Information" for a reconciliation of Adjusted EBITDA by reportable segment to Loss before income taxes.
North America
Total revenues and Adjusted EBITDA for North America were as follows:
| Fiscal Year Ended | |||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 |
% Change
2025 vs. 2024
|
% Change
2024 vs. 2023
|
||||||||||||||||||||||||
| Total revenues | $ | 1,488.9 | $ | 1,619.8 | $ | 1,877.1 | (8) | % | (14) | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 807.0 | $ | 892.1 | $ | 1,025.2 | (10) | % | (13) | % | |||||||||||||||||||
Total revenues were $1,488.9 million for fiscal year ended 2025, compared to $1,619.8 million for fiscal year ended 2024. The decrease was primarily driven by decreases in sales of QUICKVUE and SOFIA SARS Antigen assays and the wind-down of the U.S. donor screening business, partially offset by an increase in Labs revenues.
Total revenueswere $1,619.8 million for fiscal year ended 2024, compared to $1,877.1 million for fiscal year ended 2023. The decrease was primarily driven by (i) a decrease in Point of Care revenues, primarily due to a COVID-19 government award in the prior year, (ii) the wind-down of the U.S. donor screening business and (iii) the settlement award from a third party related to one of our collaboration agreements in the prior year.
Adjusted EBITDA was $807.0 million for fiscal year ended 2025, compared to $892.1 million for fiscal year ended 2024. The decrease was primarily driven by decreases in sales of QUICKVUE and SOFIA SARS Antigen assays and the wind-down of the U.S. donor screening business, partially offset by an increase in Labs revenues and lower operating expenses due to cost-savings initiatives.
Adjusted EBITDA was $892.1 million for fiscal year ended 2024, compared to $1,025.2 million for fiscal year ended 2023. The decrease was primarily driven by (i) a COVID-19 government award in the prior year, along with the corresponding inventory reserve release of $39 million, (ii) the wind-down of the U.S. donor screening business and (iii) the settlement award from a third party related to one of our collaboration agreements in the prior year, partially offset by a decrease in employee compensation costs and other operating expenses.
EMEA
Total revenues and Adjusted EBITDA for EMEA were as follows:
| Fiscal Year Ended | |||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 |
% Change
2025 vs. 2024
|
% Change
2024 vs. 2023
|
||||||||||||||||||||||||
| Total revenues | $ | 360.7 | $ | 335.8 | $ | 327.3 | 7 | % | 3 | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 82.6 | $ | 46.5 | $ | 41.0 | 78 | % | 13 | % | |||||||||||||||||||
Total revenues were $360.7 million for fiscal year ended 2025, compared to $335.8 million for fiscal year ended 2024. The increase was primarily driven by increases in Immunohematology and Point of Care revenues.
Total revenueswere$335.8 million for fiscal year ended 2024, compared to $327.3 million for fiscal year ended 2023. The increase was primarily driven by increases in Immunohematology and Point of Care revenues.
Adjusted EBITDA was $82.6 million for fiscal year ended 2025, compared to $46.5 million for fiscal year ended 2024. The increase was primarily driven by increases in Immunohematology and Point of Care revenues, product mix and lower distribution and selling costs and other operating expenses due to cost-savings initiatives.
Adjusted EBITDA was $46.5 million for fiscal year ended 2024, compared to $41.0 million for fiscal year ended 2023. The increase was primarily driven by increases in Immunohematology and Point of Care revenues.
China
Total revenues and Adjusted EBITDA for China were as follows:
| Fiscal Year Ended | |||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 |
% Change
2025 vs. 2024
|
% Change
2024 vs. 2023
|
||||||||||||||||||||||||
| Total revenues | $ | 334.7 | $ | 325.0 | $ | 310.1 | 3 | % | 5 | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 141.2 | $ | 130.5 | $ | 127.2 | 8 | % | 3 | % | |||||||||||||||||||
Total revenues were $334.7 million for fiscal year ended 2025, compared to $325.0 million for fiscal year ended 2024. The increase was primarily driven by an increase of 5% in Labs revenues, partially offset by decreases in Donor Screening and Immunohematology revenues.
Total revenues were $325.0 million for fiscal year ended 2024, compared to $310.1 million for fiscal year ended 2023. The increase was primarily driven by an increase in Labs revenues, partially offset by a decrease in Point of Care revenues.
Adjusted EBITDA was $141.2 million for fiscal year ended 2025, compared to $130.5 million for fiscal year ended 2024. The increase was primarily driven by an increase in Labs revenues, partially offset by decreases in Donor Screening and Immunohematology revenues.
Adjusted EBITDA was $130.5 million for fiscal year ended 2024, compared to $127.2 million for fiscal year ended 2023. The increase was primarily driven by an increase in Labs revenues, partially offset by a decrease in Point of Care revenues and the impact from changes in product mix.
JPAC
Total revenues and Adjusted EBITDA for JPAC were as follows:
| Fiscal Year Ended | |||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 |
% Change
2025 vs. 2024
|
% Change
2024 vs. 2023
|
||||||||||||||||||||||||
| Total revenues | $ | 293.0 | $ | 279.4 | $ | 272.7 | 5 | % | 2 | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 73.2 | $ | 69.9 | $ | 58.5 | 5 | % | 19 | % | |||||||||||||||||||
Total revenues were $293.0 million for fiscal year ended 2025, compared to $279.4 million for fiscal year ended 2024. The increase was primarily driven by increases in Labs and Immunohematology revenues.
Total revenues were $279.4 million for fiscal year ended 2024, compared to $272.7 million for fiscal year ended 2023. The increase was primarily driven by an increase in Labs revenues, partially offset by a decrease in Immunohematology revenues.
Adjusted EBITDA was $73.2 million for fiscal year ended 2025, compared to $69.9 million for fiscal year ended 2024. The increase was primarily driven by increases in Labs and Immunohematology revenues.
Adjusted EBITDA was $69.9 million for fiscal year ended 2024, compared to $58.5 million for fiscal year ended 2023. The increase was primarily driven by an increase in Labs revenues and a decrease in operating expenses, partially offset by a decrease in Immunohematology revenues.
Latin America
Total revenues and Adjusted EBITDA for Latin America were as follows:
| Fiscal Year Ended | |||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 |
% Change
2025 vs. 2024
|
% Change
2024 vs. 2023
|
||||||||||||||||||||||||
| Total revenues | $ | 252.9 | $ | 222.9 | $ | 210.6 | 13 | % | 6 | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 78.4 | $ | 63.6 | $ | 56.8 | 23 | % | 12 | % | |||||||||||||||||||
Total revenues were $252.9 million for fiscal year ended 2025, compared to $222.9 million for fiscal year ended 2024. The increase was primarily driven by an increase in Labs revenues.
Total revenues were $222.9 million for fiscal year ended 2024, compared to $210.6 million for fiscal year ended 2023. The increase was primarily driven by increases in Labs and Immunohematology revenues, partially offset by a decrease in Point of Care revenues.
Adjusted EBITDA was $78.4 million for fiscal year ended 2025, compared to $63.6 million for fiscal year ended 2024. The increase was primarily driven by an increase in Labs revenues, partially offset by an increase in operating expenses.
Adjusted EBITDA was $63.6 million for fiscal year ended 2024, compared to $56.8 million for fiscal year ended 2023. The increase was primarily driven by increases in Labs and Immunohematology revenues, partially offset by an increase in operating expenses and a decrease in Point of Care revenues.
Liquidity and Capital Resources
As of December 28, 2025 and December 29, 2024, our principal sources of liquidity consisted of the following:
| (Dollars in millions) |
December 28, 2025 |
December 29, 2024 |
|||||||||
| Cash and cash equivalents | $ | 169.8 | $ | 98.3 | |||||||
| Amount available to borrow under the Revolving Credit Facility | $ | 596.6 | $ | 589.0 | |||||||
| Working capital including cash and cash equivalents, current | $ | 481.2 | $ | 220.1 | |||||||
As of December 28, 2025, we had $169.8 million in Cash and cash equivalents, a $71.5 million increase from December 29, 2024. Our cash requirements fluctuate as a result of numerous factors, including cash generated from operations, progress in R&D, capital expansion projects and acquisition, restructuring and business development activities. We believe our organizational structure allows us the necessary flexibility to move funds throughout our subsidiaries to meet our operational working capital needs.
Debt Capitalization
On August 21, 2025, we entered into the Credit Agreement by and among us, as borrower, Bank of America, and the other lenders and L/C issuers party thereto. Pursuant to the Credit Agreement, the Lenders provided us with (i) a $1.15 billion Term Loan A, (ii) a $100.0 million DDTL Term Loan A, (iii) a $1.45 billion Term Loan B and (iv) a $700.0 million Revolving Credit Facility. The Financing is guaranteed by certain of our material domestic subsidiaries and is secured by liens on substantially all of our assets and the Guarantors' assets, excluding real property and certain other types of excluded assets. Loans under the Credit Agreement will bear interest at a rate equal to the Term SOFR, plus the Applicable Rate, or Base Rate, plus the Applicable Rate (each as defined in the Credit Agreement). On the Closing Date, we borrowed the entire amount of the Term Loan A and the Term Loan B, and the effective interest rates as of December 28, 2025 were 6.87% and 8.43%, respectively.
We used the proceeds of the Term Loan A and the Term Loan B, along with its cash on hand, to (i) repay the remaining $2.21 billion and $490.0 million owed under the previous term loan and previous revolving credit facility, respectively, under the Prior Credit Agreement, which was terminated upon such repayment, including principal, accrued interest and outstanding fees and (ii) pay the fees and expenses incurred in connection with the Financing.
Availability under the Revolving Credit Facility, after deducting letters of credit of $23.4 million and $80.0 million borrowings outstanding, was $596.6 million as of December 28, 2025.
The Term Loans are subject to quarterly amortization at a quarterly rate of 1.25% and 0.25% of the aggregate initial principal amount of the Term A Loan and the Term B loan, respectively, as are set forth in the Credit Agreement. The Term Loan A Facilities and the Revolving Credit Facility will mature on August 21, 2030, and the Term Loan B will mature on August 21, 2032. The Company must prepay loans outstanding under the Credit Agreement in an amount equal to the Net Cash Proceeds (as defined in the Credit Agreement) from (i) certain property dispositions and (ii) the receipt of certain other amounts not in the ordinary course of business, such as certain insurance proceeds and condemnation awards, in each case, if not reinvested within a specified time period as contemplated in the Credit Agreement.
The Credit Agreement contains affirmative and negative covenants that are customary for credit agreements of this nature. The negative covenants include, among other matters, limitations on asset sales, mergers, indebtedness, liens, investments and transactions with affiliates. The Credit Agreement contains two financial covenants: (i) a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) as of the last day of each fiscal quarter of (a) 4.50 to 1.00 for each fiscal quarter in the first three years following the Closing Date and (b) 4.25 to 1.00 for each fiscal quarter thereafter; and (ii) a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00 as of the end of any fiscal quarter for the most recently completed four fiscal quarters. We were in compliance with the financial covenants as of December 28, 2025.
Receivables Purchase Agreement
On March 31, 2023, we entered into an amendment to our existing RPA, by and among Ortho-Clinical Diagnostics US FinanceCo I, LLC ("Ortho FinanceCo I"), as Seller, our wholly owned receivables financing subsidiary, Wells Fargo Bank, N.A., as administrative agent (the "Agent"), Ortho-Clinical Diagnostics, Inc., as the Master Servicer and as an Originator ("Ortho Inc."), Quidel, as an Originator, and certain Purchasers. Under the RPA, as amended, Ortho FinanceCo I may sell receivables in amounts up to a $150.0 million limit, subject to certain conditions, including that, at any date of determination, the aggregate capital paid to Ortho FinanceCo I does not exceed a "capital coverage amount," equal to an adjusted net receivables pool balance minus a required reserve. Ortho FinanceCo I has guaranteed the prompt payment of the sold receivables, and to secure the prompt payment and performance of such guaranteed obligations, Ortho FinanceCo I has granted a security interest to the Agent, for the benefit of the Purchasers, in all assets of Ortho FinanceCo I. Ortho Inc., in its capacity as Master Servicer under the RPA, is responsible for administering and collecting the receivables and has made customary representations, warranties, covenants and indemnities. We have also provided a performance guaranty for the benefit of Ortho FinanceCo I to cause the due and punctual performance by Ortho Inc. of its obligations as Master Servicer.
Capital Expenditures
Annual capital expenditures, including investments, net of proceeds from government assistance allocated to fixed assets, were approximately $182 million, $195 million and $196 million in fiscal years ended 2025, 2024 and 2023, respectively. We continue to make capital expenditures in connection with the expansion of our manufacturing capabilities and other facility-related activities.
Cash Flow Summary
| Fiscal Year Ended | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Net cash provided by operating activities | $ | 105.2 | $ | 83.0 | $ | 280.2 | |||||||||||
| Net cash used for investing activities | (192.7) | (149.9) | (187.6) | ||||||||||||||
| Net cash provided by (used for) financing activities | 155.8 | 48.8 | (265.8) | ||||||||||||||
| Effect of exchange rates on cash | 3.0 | (2.9) | (1.2) | ||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 71.3 | $ | (21.0) | $ | (174.4) | |||||||||||
Fiscal Year Ended December 28, 2025
Cash provided by operating activities was $105.2 million for fiscal year ended 2025, and reflected a net loss of $1,131.8 million and non-cash adjustments of $1,362.8 million, primarily associated with a goodwill impairment charge, depreciation and amortization, asset write off related to restructuring, integration and other charges, and stock-based compensation expense, partially offset by $148.3 million and $117.5 million in cash outflows for inventories and accounts receivable, respectively.
Cash used for investing activities was $192.7 million for fiscal year ended 2025, and was primarily related to purchases of property, plant, equipment, investments and intangibles.
Cash provided by financing activities was $155.8 million for fiscal year ended 2025, and was primarily related to proceeds from long-term borrowings, net of discount and debt issuance costs of $2,559.3 million, offset by payments on long-term borrowings of $2,289.2 million and net payments from the Revolving Credit Facility of $118.0 million.
Fiscal Year Ended December 29, 2024
Cash provided by operating activities was $83.0 million for fiscal year ended 2024, and reflected a net loss of $2,052.0 million and non-cash adjustments of $2,293.7 million, primarily associated with a goodwill impairment charge and change in deferred tax assets and liabilities, as well as depreciation and amortization, asset impairment charge and stock-based compensation expense. Cash provided by operating activities was also driven by $134.1 million of cash outflows for inventories.
Cash used for investing activities was $149.9 million for fiscal year ended 2024, and was primarily related to $195.1 million in purchases of property, plant, equipment, investments and intangibles, partially offset by $9.3 million in net proceeds from the sale of the McKellar, San Diego, CA facility. We also purchased $7.2 million and sold $63.1 million of marketable securities during fiscal year ended 2024.
Cash provided by financing activities was $48.8 million for fiscal year ended 2024, and was primarily related to net proceeds from the Revolving Credit Facility of $198.0 million, partially offset by payments on long-term borrowings of $143.0 million.
Fiscal Year Ended December 31, 2023
Cash provided by operating activities was $280.2 million for fiscal year ended 2023, and reflected a net loss of $10.1 million and non-cash adjustments of $485.2 million, primarily associated with depreciation and amortization, stock-based compensation expense, change in deferred tax assets and liabilities and accretion of interest on deferred consideration. In addition, we benefited from collections on accounts receivables, which contributed $160.0 million to Cash provided by operating activities, offset by other changes in working capital, including $211.6 million of cash outflows for inventories.
Cash used for investing activities was $187.6 million for fiscal year ended 2023, and was primarily related to $209.3 million in purchases of property, equipment, investments and intangibles and $13.5 million in proceeds from government assistance allocated to fixed assets. We also purchased $60.1 million and sold $78.3 million of marketable securities during fiscal year ended 2023.
Cash used for financing activities was $265.8 million for fiscal year ended 2023, and was primarily related to payments on long-term borrowings of $228.0 million, payments of deferred consideration of $30.3 million and payments of tax withholdings related to vesting of stock-based awards of $13.5 million.
Liquidity Outlook
Short-term Liquidity Outlook
Our primary source of liquidity, other than our holdings of Cash and cash equivalents, has been cash flows from operations. Cash generated from operations provides us with the financial flexibility we need to meet normal operating, investing and financing needs. We anticipate that our current Cash and cash equivalents, together with cash provided by operating activities and amounts available under our Revolving Credit Facility, will be sufficient to fund our near-term capital and operating needs for at least the next 12 months.
Normal operating needs include the planned costs to operate our business, including amounts required to fund working capital, R&D and capital expenditures. Our primary short-term needs for capital, which are subject to change, include expenditures related to:
•interest on and repayments of our long-term borrowings and lease obligations;
•acquisitions of property, equipment and other fixed assets in support of our manufacturing facility expansions;
•the continued advancement of R&D efforts;
•support of commercialization efforts related to our current and future products, including support of our direct sales force and field support resources; and
•potential strategic acquisitions and investments.
Due to the risks inherent in the product development process, we are unable to estimate with meaningful certainty the costs we will incur in the continued development of our product candidates for commercialization. Our R&D costs may be substantial as we move product candidates into preclinical and clinical trials and advance our existing product candidates into later stages of development.
The primary purposes of our capital expenditures are toinvest in manufacturing capacity expansion,acquire certain of ourinstruments, acquire scientific equipment, purchase or develop IT and implement facility improvements. We plan to fund the capital expenditures with the cash on our balance sheet.
We are focused on expanding the number of instruments placed in the field and solidifying long-term contractual relationships with customers. In order to achieve this goal, in certain jurisdictions where it is permitted, we have leveraged a reagent rental model that has been recognized as more attractive to certain customers. In this model, we lease, rather than sell, instruments to our customers. Over the term of the contract, the purchase price of the instrument is embedded in the price of the assays and reagents. Going forward, we intend to increase the number of reagent rental placements in developed markets, a strategy that we believe is beneficial to our commercial goals because it lowers our customers' upfront capital costs and therefore allows purchasing decisions to be made at the lab manager level. For these same reasons, the reagent rental model also benefits our commercial strategy in emerging markets, where permitted by law. We believe that the shift in our sales strategy will grow our installed base, thereby increasing sales of higher-margin assays, reagents and other consumables over the life of the customer contracts and enhancing our recurring revenue and cash flows. During fiscal year ended 2025, we transferred $167.3 million of instrument inventories from Inventories to Property, plant and equipment, net, further increasing our investment in property, plant and equipment.
Long-term Liquidity Outlook
Our future capital requirements and the adequacy of our available funds to service any long-term debt outstanding and to fund working capital expenditures and business development efforts will depend on many factors, including:
•our ability to realize revenue growth from our new technologies and create innovative products in our markets;
•outstanding debt and covenant restrictions;
•our ability to leverage our operating expenses to realize operating profits with revenue growth;
•competing technological and market developments; and
•our entry into strategic collaborations with other companies or acquisitions of other companies or technologies to enhance or complement our product and service offerings.
Contractual Obligations and Off-Balance Sheet Arrangements
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations relating to debt, income taxes, lease arrangements, purchase obligations and licensing arrangements are provided in Part II, Item 8, "Financial Statements and Supplementary Data-Note 9. Borrowings," "-Note 5. Income Taxes," "-Note 10. Leases" and "-Note 13. Commitments and Contingencies," respectively.
We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations.
Recent Accounting Pronouncements
Information about recent accounting pronouncements is included in Part II, Item 8, "Financial Statements and Supplementary Data-Note 1. Basis of Presentation and Summary of Significant Accounting Policies."
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses. Our critical accounting estimates are those that significantly affect our financial condition and results of operations and require the most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.
Allowance for Contractual Rebates
We record revenues primarily from product sales. These revenues are recorded net of rebates that are estimated at the time of sale, and are largely driven by various customer program offerings, including special pricing agreements and promotions. Rebates are calculated based on historical experience, estimated distributor inventory balances, contractual and statutory requirements and other relevant information, and are recorded as a reduction of sales. These rebates are presented as either an offset to trade accounts receivable or a liability based on forms of settlement. The allowance for contractual rebates involves estimating adjustments to revenue based on a high volume of data including inputs from third-party sources. In addition, the determination of such adjustments includes estimating rebate percentages which are dependent on estimated end-user sales mix
and customer contractual terms, which vary across customers, the related balance of which was $28.7 million of our rebate reserves at December 28, 2025.
Goodwill and Intangible Assets
The useful lives of intangible assets with definite lives are based on the expected number of years the asset will generate revenue or otherwise be used by us and the related amortization is based on the straight-line method. Goodwill, which has an indefinite life, is not amortized but instead is tested at least annually for impairment, or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include:
•the asset's ability to continue to generate income from operations and positive cash flow in future periods;
•any volatility or significant decline in our stock price and market capitalization compared to our net book value;
•loss of legal ownership or title to an asset;
•significant changes in our strategic business objectives and utilization of our assets; and
•the impact of significant negative industry or economic trends.
If a change were to occur in any of the above-mentioned factors or estimates, the likelihood of a material change in our reported results would increase.
For goodwill, the entity has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. The quantitative impairment test compares the fair value of a reporting unit with the carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, goodwill is impaired and the loss is recorded.
As a result of the identification of indicators of impairment during the first quarter of 2024, we performed an interim impairment test that resulted in a non-cash goodwill impairment charge of $1.7 billion for the North America reporting unit. For our annual evaluation for impairment of goodwill as of September 30, 2024, we bypassed the qualitative assessment and proceeded directly to the quantitative goodwill impairment test for all reporting units. We concluded that the China and JPAC reporting units' carrying values exceeded their respective estimated fair values. As a result, we recorded non-cash goodwill impairment charges of $17.3 million and $61.4 million in the fourth quarter of 2024 for the China and JPAC reporting units, respectively.
During the third quarter of 2025, the sustained decline in our stock price and market capitalization was a triggering event requiring an interim goodwill impairment assessment for all reporting units. Based on our interim goodwill impairment assessment in the third quarter of 2025, we concluded that the EMEA, China and Latin America reporting units' carrying values exceeded their respective fair values. As a result, we recorded a non-cash goodwill impairment charge of $614.8 million, $68.1 million and $17.8 million in the third quarter of 2025 for the EMEA, China and Latin America reporting units, respectively, which represented a full impairment of the goodwill allocated to these reporting units.
This quantitative analysis required us to make estimates and assumptions in order to calculate the fair value of our reporting units. The quantitative goodwill assessment for all reporting units consisted of a fair value calculation that combines an income approach, using a discounted cash flow method, and a market approach, using the guideline public company method. The quantitative goodwill impairment assessment requires the application of a number of significant assumptions, including estimates of future revenue growth rates, EBITDA margins, discount rates and market multiples. The projected future revenue growth rates and EBITDA margins, and the resulting projected cash flows are based on historical experience and internal annual operating plans reviewed by management, extrapolated over the forecast period. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to the reporting units. Market multiples are based on the guideline public company method using comparable publicly traded company multiples of revenue and EBITDA for a group of benchmark companies.
We believe the assumptions that were used in the quantitative goodwill impairment assessment are reasonable and consistent with assumptions that would be used by other marketplace participants.
Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 8. Goodwill and Intangible Assets, Net" for more information on the goodwill impairment recognized in 2024 and 2025.
Income Taxes
Significant judgment is required in determining our provision for income taxes, current tax assets and liabilities, deferred tax assets and liabilities, and our future taxable income, both as a whole and in various tax jurisdictions, for purposes of assessing our ability to realize future benefit from our deferred tax assets. A valuation allowance may be established to reduce our deferred tax assets to the amount that is considered more likely than not to be realized through the generation of future taxable income and other tax planning opportunities. As of December 28, 2025, we had a valuation allowance of $249.8 million, which
represents the portion of our deferred tax assets that management believes is not more likely than not to be realized. We will continue to assess the need for a valuation allowance on our deferred tax assets by evaluating both positive and negative evidence that may exist.
We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained during an audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While we believe that we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcome of examinations by tax authorities in determining the adequacy of our provision for income taxes. Refer to Part II, Item 8, "Financial Statements and Supplementary Data-Note 5. Income Taxes" for more information on income taxes.
Inventory Valuations
We periodically review inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, we make assumptions about the future demand for and market value of the inventory and based on these assumptions estimate the amount of any obsolete, unmarketable, slow moving or overvalued inventory. We write down the value of our inventories by an amount equal to the difference between the cost of the inventory and the net realizable value. If actual market conditions are less favorable than those projected by management at the time of the assessment, however, additional inventory write-downs may be required, which could reduce our earnings.
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