Bio-Rad Laboratories Bets on Digital PCR, Margins and Smarter M&A Growth

Bio-Rad Laboratories (NYSE:BIO) is pursuing a multi-year effort to improve growth, expand margins and strengthen free cash flow, with management emphasizing portfolio focus, operating discipline and a more selective approach to acquisitions.

Speaking at a Bernstein conference, Chief Financial Officer Roop Lakkaraju said the company’s relatively new executive team has been assessing its businesses from the ground up, including where Bio-Rad has a competitive advantage and where it may need to change its technology or portfolio.

“We are operators,” Lakkaraju said, describing a leadership group that has experience evolving businesses in difficult markets. The company is focused on identifying markets where it has a “right to win,” using M&A as a potential supplement to growth, and improving margins and cash generation.

Digital PCR Remains a Central Growth Area

Lakkaraju highlighted Bio-Rad’s Droplet Digital PCR business as a key opportunity. Digital PCR enables absolute quantitation and is particularly applicable to rare-event detection, he said, citing oncology, minimal residual disease and wastewater management as examples.

Bio-Rad’s droplet-based approach, assay library of more than 400,000 assays and more than 12,000 technical publications using its digital PCR technology support its market position, according to Lakkaraju.

He said next-generation sequencing and PCR are generally complementary rather than directly substitutive technologies. Sequencing can identify what researchers are looking at, while PCR can be used for absolute or approximate quantitation, he said. Research labs commonly use multiple technologies, including real-time PCR, qPCR, digital PCR and sequencing, depending on the application.

The company’s acquisition of Stilla Technologies, which closed June 30 of the prior year, broadened its digital PCR lineup to include entry-level instruments. Lakkaraju said Bio-Rad had previously been concentrated in mid- to high-end applications and lacked an entry-level product as instrument price points declined.

Stilla’s QX700 products have supported double-digit growth over the past three quarters, ranging from low double-digit growth to more than 20%, Lakkaraju said. He also described the products’ modular architecture as a potential source of future research-and-development leverage.

Bio-Rad currently uses partnerships with companies including Biodesix, Gencove and Insight Molecular to apply its digital PCR technology in diagnostic settings. Lakkaraju said the company sees a longer-term opportunity to expand digital PCR further into diagnostics.

Uneven Research Markets Continue to Affect Demand

Lakkaraju said market conditions remain challenging across life-science tools and diagnostics. Bio-Rad has historically had meaningful exposure to academic and government customers as well as early-stage biopharma companies, including those involved in cell and gene therapy.

While later-stage and commercial-stage biotechnology customers have shown improvement, early-stage biotech spending has remained weaker, he said. Funding and activity in cell and gene therapy are below prior levels, according to Lakkaraju.

The company is evaluating ways to participate more in later-stage biopharma activity, though replacing technology already used in clinical programs can be difficult. Bio-Rad may instead seek opportunities in new customer programs, he said.

In academic and government markets, Lakkaraju said instrument sales of QX700 products suggest customers are continuing to invest in research despite a soft environment. However, customer sentiment remains cautious, particularly in the U.S., amid uncertainty about whether expected funding will be received.

He said changes in how the National Institutes of Health deploys funding, including a greater emphasis on multi-year grants, have created uncertainty for research institutions. The White House was seeking further reductions to the 2026 NIH budget, while Congress was pushing for at least flat funding, according to Lakkaraju.

Elsewhere, he said funding conditions in Europe have deteriorated as governments direct spending toward areas such as defense and energy. Asia-Pacific markets excluding China have been positive for Bio-Rad, while conditions in China remain uncertain. China represents a mid-single-digit percentage of Bio-Rad revenue and is more weighted toward diagnostics than tools, he said.

M&A Strategy Shifts Toward Commercially Established Assets

Lakkaraju acknowledged that some earlier acquisitions, including Dropworks and Curiosity Diagnostics, resulted in impairments. He said Bio-Rad had spent much of the prior eight to 10 years pursuing early-stage technology companies, which required the company to develop, productize and commercialize the acquired technology.

The company has since shifted its approach toward businesses with products already in the market, existing revenue and established market positions. Bio-Rad is not seeking transformative acquisitions, Lakkaraju said, but is targeting companies in the roughly $100 million to $500 million revenue range across tools or diagnostics.

Acquisitions must provide differentiated technology and potential synergies in areas such as R&D, commercial infrastructure or manufacturing, rather than simply add revenue, he said.

Lakkaraju also addressed Bio-Rad’s stake in Sartorius, calling it a monetizable asset but saying Bio-Rad is not interested in, nor able to, acquire Sartorius. He said Bio-Rad’s priority is improving its own operations, growth and cash flow.

Restructuring and Margin Goals

Bio-Rad announced restructurings in February 2025 and the second quarter of 2026. Lakkaraju said the actions were part of a methodical effort to align the company’s cost structure with its strategy, rather than restructurings undertaken solely for cost reduction.

He said customer focus remains central to the company’s plans, while management is also working to retain employee engagement through communication and direct engagement with teams worldwide.

Looking ahead, Lakkaraju said Bio-Rad aims to reach a mid-teens operating margin within the next few years. He characterized that target as a point along a broader journey toward peer-level operating margins, supported by more consistent top-line growth.

About Bio-Rad Laboratories (NYSE:BIO)

Bio-Rad Laboratories, Inc is a life science research and clinical diagnostics company headquartered in Hercules, California. Founded in 1952 by David and Alice Schwartz, the company develops, manufactures and markets products used by academic, pharmaceutical, biotechnology, healthcare and government customers.

Its Life Science segment provides instruments, reagents, consumables and software for applications including genomics, digital PCR, gene expression analysis, protein purification, cell biology and biopharmaceutical quality control.