Selena Lu : Got it. Just final questions on the gross margin. It does come better than what we expected, given the lower volume. Can you share a little bit the drivers of that? And then what’s your expectation for the full year?
Roop Lakkaraju: Yes. Hi, this is Roop. I’ll take this to start. First of all, it did come in a little bit stronger, which we were very happy about, and part of it was expected just based on the cost actions we’ve taken and these sort of things. But also what played a part is the mix. And so that helps support a little bit of a stronger gross margin there. I think, as we think about the rest of the year, and as Andy pointed out, we feel good about the overall view for the full year on the gross margin. Based on mix and quarter-to-quarter movement, we may see a slight movement in that gross margin, but overall for the full year, we still feel very confident as it relates to how it fits in with our overall outlook for the year.
Operator: We’ll go next now to Jack Meehan with Nephron research.
Jack Meehan: Thank you. Good afternoon. First question is for Norman. I was just wondering if you give a little bit more color on when we should expect updates in terms of the management hires for the new COO and also the plan for the new head of diagnostics.
Norman Schwartz: Yes, I think we’re getting pretty close on the, on the diagnostics higher. I think we’ll have something to announce pretty soon. And, you know, we’ve got a really good pool of candidates on the COO side that’ll probably take a little longer, but we’re pretty encouraged.
Jack Meehan: Great. And then for Roop, first, welcome to Bio Rad and had a couple of questions for you. The first is, could you just talk about, as you’re new in the seat, how you went about sizing up the guidance for 2024? And second is if you just talk about the cadence you’re expecting for margins starting from 9.7 to get to the full year target, how you feel like that phases throughout the year and how you got confidence in that.
Roop Lakkaraju: Sure. So, first of all, thank you for the welcome. In terms of the process on the guidance, first of all, the company has an existing process, business review cadence that was already in existence. And so part of this was really for me to seamlessly integrate into the existing processes as part of those processes. We start out with looking at revenue on a quarterly basis, quarterly basis with our sales teams and walking through revenue drivers and market conditions and these sort of things, and then profiling that against what we were expecting and understanding how mix might affect the next piece, which is the margins and these sort of things. There’s also a number of cost actions that have been taken historically that we were also monitoring the impact of those cost actions, as well as kind of market dynamics around materials, pricing, logistics trends, these sort of things, and how that might affect the margin profile.
So we then just kind of walk down through the different areas of the P&L. When we got to the opex, it really is more around a run rate, the effect of things like merit and how that plays through. So we walked through that analytically and then getting down, obviously to the operating income based on the different drivers and our expectations and feedback from our sales team on how the ramp might look, how then that might flow through the factory. From an absorption standpoint, it gave us confidence on reiterating our guidance overall. And also, just to finish off the thought, I think, to your phasing conversation question, that also gave us perspective on how to think about the quarter-to-quarter trend through the year. And if there’s any kind of specific things that we need to call out or think about more specifically.
Operator: Thank you. We’ll go next now to Conor McNamara at RBC Capital Markets. Hey, guys, thanks for the questions.
Conor McNamara: And I know just one for you. You know, I appreciate the color on the management departures and how that, you know, the timing was, you know, a lot of it was personal related. But can you give us more color on how other non management employee retention has been? Has there been any fallout from some of these departures?
Roop Lakkaraju: No, there hasn’t. I mean, you know, obviously in a company of our size and, you know, actually any size, you have a. You have a certain amount of turnover that’s natural every year and the, you know, in the kind of the five to 10% range. But no, these departures have not precipitated any, anything else.
Conor McNamara: Okay, thanks for that. And then just, you know, the color you gave on some of these ddPCR partnerships, those are some great announcements. But can you just kind of talk about some of the revenue opportunity for bio rad? And is that, you know, do you see additional equipment placements as a result of these, there’s consumable pull through what’s kind of the expected ramp of any sales benefit for some of those announced partnerships.
Andy Last: Yes. Yes. Thanks, Connor. This is Andy. So there’s slightly different profile for each of these announcements. Allegheny is much more focused on real clinical insight around, you know, minimal residual disease and how best to deploy our technology to, you know, be more effective in that area. So that’s really a value creation through insight, learning, clinical, you know, clinical information. The onco site is more tangible in that, you know, this is to generate longer term systems placements and test sales for oncite in particular. And then we will have some beneficial effect from that. But that’s kind of a long term strategy. It will have no material impact in the very near term. And then genoscopy, we are the platform they chose to develop on.
