# Bio-Techne (TECH) Financial Model Free Excel 3-statement financial model and company analysis for Bio-Techne. - Canonical: https://finamodel.com/companies/bio-techne - Industry: Laboratory Equipment - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/TECH.xlsx ## Model Purpose This model provides a comprehensive equity valuation and cash flow forecast for Bio-Techne, enabling an analyst to assess the impact of recent portfolio pruning (such as the Exosome Diagnostics divestiture) and the margin expansion trajectory of its core consumables-driven life sciences business. ## Company Overview Bio-Techne Corporation (TECH) is a global life sciences company that develops, manufactures, and sells bioactive reagents, analytical instruments, and precision diagnostics for the research and clinical diagnostic markets. The company provides critical tools that assist scientific investigations into biological processes, drug discovery, and clinical diagnoses. Business segments: * Protein Sciences (approximately 71.5% of FY2025 revenue) * Diagnostics and Spatial Biology (approximately 28.5% of FY2025 revenue) Key geographies include the US, EMEA, and APAC, with recent macro headwinds in China impacting overall growth. The business model is highly recurring and asset-light, relying on a "razor and razorblade" strategy where proprietary instrument placements drive high-margin, long-term consumable pull-through. Bio-Techne holds a strong competitive position with a portfolio of over 6,000 proteins and 400,000 antibody types. Recently, the company shifted from being a serial bolt-on acquirer to sharpening its strategic focus, divesting its Fetal Bovine Serum (FBS) business and its Exosome Diagnostics (ExoDx) CLIA-lab service in early FY2026 to improve overall segment profitability. ## Revenue Deep Dive ### Protein Sciences (PSS) * **Segment name:** Protein Sciences * **Revenue driver formula:** (Installed Instrument Base x Consumable Pull-Through Rate) + (Reagent Volume x Average Selling Price) * **Historical growth rate:** 5% to 8% organic CAGR (FY2025 organic growth was 5%) * **Key growth levers and headwinds:** Driven by biopharma R&D spending, cell and gene therapy workflows, and NIH funding. Headwinds include recent softness in the China market and US administrative uncertainties. * **Pricing dynamics:** High pricing power due to proprietary, highly specified antibodies and designer proteins. * **Revenue recognition notes:** Primarily recognised at a point in time upon shipment of consumables and instruments. * **Seasonality:** The fiscal fourth quarter (ending June 30) is typically the strongest due to academic and government budget cycles. ### Diagnostics and Spatial Biology (DSS) * **Segment name:** Diagnostics and Spatial Biology * **Revenue driver formula:** Spatial Biology Instrument Placements + (Diagnostic Controls Volume x Price) * **Historical growth rate:** 6% to 12% organic CAGR (FY2025 organic growth was 6%) * **Key growth levers and headwinds:** Adoption of the COMET spatial biology suite and clinical diagnostic testing volumes. * **Pricing dynamics:** Competitive but stable, driven by long-term contracts for diagnostic controls. * **Revenue recognition notes:** Point in time for product sales; historically included over-time recognition for CLIA lab services prior to the ExoDx divestiture. * **Seasonality:** Less seasonal than PSS, driven by steady clinical testing volumes. ## Cost Structure ### Variable Costs / COGS * COGS includes raw materials, direct manufacturing labour, facility overheads, and freight. * Gross margin range: 68% to 72% on an adjusted basis over the last 5 years. * Key input costs include biological raw materials and specialized packaging. * COGS scales with volume, but the company enjoys significant operating leverage due to the batch manufacturing nature of proteins and antibodies. ### Operating Expenses * **R&D:** Typically 8% to 10% of revenue, expensed as incurred. It covers the development of new assays, spatial biology instruments, and designer proteins (over 500 new products launched in FY2025). * **SG&A:** Typically 25% to 30% of revenue, heavily driven by the specialized technical sales force and marketing initiatives. * **Depreciation & Amortisation:** High as a percentage of revenue due to historical acquisitions. Intangible amortisation creates a massive bridge between GAAP and non-GAAP earnings. * **Stock-Based Compensation:** Significant expense used to retain top scientific and executive talent. * **Restructuring / one-time charges:** Frequent in recent years due to portfolio optimization and divestiture costs. ### Margin Profile * Adjusted gross margin sits around 68.5% to 71.0%. * Adjusted operating margin was 31.6% in FY2025. * Segment margins: PSS operates at an impressive 42.6% adjusted operating margin, while DSS operated at 6.2% in FY2025 (expected to improve following the ExoDx divestiture). ## Balance Sheet Structure * Total assets are approximately $3.0 billion to $3.5 billion. * Goodwill and intangible assets make up over 50% of total assets, reflecting the company's history of acquiring specialized life science tool developers. * Working capital profile: * Days Sales Outstanding (DSO): 45 to 55 days. * Days Inventory Outstanding (DIO): 90 to 110 days. High inventory levels are required due to the long shelf life and batch production of biological reagents. * Days Payable Outstanding (DPO): 30 to 40 days. * Net working capital is positive and consumes cash during high-growth periods. * PP&E consists primarily of specialized manufacturing facilities and laboratory equipment. * Operating leases are material but represent a small fraction of total liabilities compared to debt. ## Capital Expenditure & Investment * Capex as a percentage of revenue typically runs between 3% and 5%. * The split is roughly 40% maintenance and 60% growth, with recent investments focused on expanding manufacturing capacity for cell and gene therapy reagents. * Capitalised software is minimal compared to physical facility investments. * M&A pattern: Historically a serial bolt-on acquirer, but recently shifted to portfolio pruning (divesting non-core assets like ExoDx and FBS) and making strategic minority investments (e.g., Spear Bio). ## Debt & Capital Structure * Total debt consists primarily of a revolving credit facility and term loans. * Debt/EBITDA ratio typically targets below 2.0x, allowing flexibility for acquisitions. * Interest rate profile is a mix of fixed and floating, with floating rates tied to the credit facility. * Share repurchase programme is highly active, with $276 million repurchased in FY2025. * Dividend policy: The company pays a regular cash dividend, returning approximately $50 million to shareholders in FY2025. ## Cash Flow Characteristics * Operating cash flow conversion (OCF / Net Income) is typically >1.2x, driven by massive non-cash amortisation charges. * Free cash flow margin (FCF / Revenue) ranges from 20% to 25%. * Major non-cash items include depreciation, amortisation of acquired intangibles, and stock-based compensation. * Working capital is a moderate use of cash as inventory scales with revenue growth. * The cash tax rate is often lower than the GAAP effective tax rate due to R&D tax credits and excess tax benefits from stock-based compensation. ## Sheet Structure 1. **Assumptions**: Hardcoded inputs for segment growth, margins, macro drivers, and tax rates. 2. **Revenue_Build**: Detailed build for PSS and DSS segments, including adjustments for the ExoDx divestiture. 3. **Income_Statement**: Revenue down to Net Income, clearly separating GAAP EPS and Adjusted EPS. 4. **Balance_Sheet**: Assets, Liabilities, and Shareholders' Equity. 5. **Cash_Flow_Statement**: Operating, Investing, and Financing cash flows. 6. **Working_Capital**: Schedules for Accounts Receivable, Inventory, and Accounts Payable. 7. **Debt_Schedule**: Revolver drawdowns, term loan amortisation, and interest expense calculations. 8. **Depreciation_Amortisation**: PP&E waterfall and acquired intangible amortisation schedules. 9. **DCF**: Unlevered free cash flow build, WACC calculation, and terminal value. ## Key Financial Relationships 1. PSS Revenue = Prior Year PSS Revenue x (1 + PSS Organic Growth Rate) 2. DSS Revenue = (Prior Year DSS Revenue - Divested ExoDx Revenue) x (1 + DSS Organic Growth Rate) 3. Total Net Sales = PSS Revenue + DSS Revenue 4. COGS = Total Net Sales x (1 - Adjusted Gross Margin %) 5. PSS Operating Income = PSS Revenue x PSS Adjusted Operating Margin (historically ~42.6%) 6. DSS Operating Income = DSS Revenue x DSS Adjusted Operating Margin (historically ~6.2%, adjusting upwards post-divestiture) 7. Consolidated Adjusted Operating Income = PSS Operating Income + DSS Operating Income - Unallocated Corporate Expenses 8. Adjusted Net Income = GAAP Net Income + Amortisation of Intangibles + Stock-Based Compensation + Restructuring Costs (all tax-effected) 9. Free Cash Flow = Operating Cash Flow - Capital Expenditures 10. Ending Inventory = Prior Year Inventory + (COGS x (DIO / 365)) - Prior Year Inventory ## Cross-Sheet Dependencies * The **Revenue_Build** sheet feeds the top line of the **Income_Statement**. * The **Income_Statement** generates Net Income, which is the starting point for the **Cash_Flow_Statement**. * The **Cash_Flow_Statement** calculates Capital Expenditures, which feeds the **Depreciation_Amortisation** sheet. * The **Depreciation_Amortisation** sheet feeds non-cash add-backs on the **Cash_Flow_Statement** and operating expenses on the **Income_Statement**. * The **Debt_Schedule** relies on cash flow available for debt service from the **Cash_Flow_Statement** and feeds Interest Expense back to the **Income_Statement**, creating a circular reference that requires a toggle switch. ## Sign Convention * Revenue, Assets, and Equity are positive. * Expenses (COGS, SG&A, R&D) are entered as positive numbers in their respective build schedules but subtracted in the Income Statement. * On the Cash Flow Statement, cash inflows are positive, and cash outflows (Capital Expenditures, Dividends, Share Repurchases) are negative. ## Things Most Likely to Go Wrong * Failing to adjust historical DSS revenue for the ExoDx divestiture will artificially inflate baseline growth rates. * Ignoring the massive gap between GAAP and Adjusted EPS (e.g., $0.46 vs $1.92 in FY2025) will result in a fundamental misunderstanding of the company's true earnings power. * Mismodelling the margin profile of the DSS segment, which is expected to expand significantly following the removal of the low-margin CLIA lab service. * Overestimating near-term China revenue growth, which has been a stated macro headwind in recent quarters. * Forgetting to add back stock-based compensation when calculating Adjusted Operating Margin, which flatters the reported non-GAAP metrics. * Applying a generic inventory turnover ratio; Bio-Techne requires high DIO due to the batch manufacturing and long shelf life of its biological reagents. * Failing to account for the reinstatement of incentive compensation accruals, which temporarily depressed FY2025 margins. * Miscalculating the tax shield from non-GAAP add-backs, leading to an incorrect Adjusted Net Income figure. ## Validation Checks * Adjusted Gross Margin should remain in the 68% to 72% range based on historical performance. * PSS Adjusted Operating Margin should remain above 40%; flag if it drops below this threshold. * Total Assets must equal Total Liabilities plus Shareholders' Equity in every forecasted period. * OCF / Adjusted Net Income conversion should be >1.0x, reflecting the company's strong cash generation. * Capex as a percentage of revenue should run between 3% and 5%. * Debt/EBITDA should remain below 2.0x per management's historical leverage targets. * The effective tax rate should be between 20% and 22%. ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | PSS Organic Revenue Growth | 5.0 | % | Aligns with FY2025 reported organic growth | | DSS Organic Revenue Growth | 6.0 | % | Aligns with FY2025 reported organic growth | | Adjusted Gross Margin | 68.5 | % | Based on recent Q2 FY2026 reporting | | PSS Adjusted Operating Margin | 42.6 | % | Actual FY2025 segment profitability | | DSS Adjusted Operating Margin | 10.0 | % | Estimated improvement from 6.2% post-ExoDx divestiture | | R&D as % of Revenue | 9.0 | % | Historical average to support new product launches | | SG&A as % of Revenue | 28.0 | % | Historical average reflecting technical sales force | | Capex as % of Revenue | 4.0 | % | Midpoint of historical 3-5% range | | Days Sales Outstanding (DSO) | 50 | Days | Based on historical working capital trends | | Days Inventory Outstanding (DIO) | 100 | Days | Reflects batch manufacturing of reagents | | Adjusted Effective Tax Rate | 21.0 | % | Historical non-GAAP tax rate | | WACC | 8.5 | % | Standard discount rate for life science tools peers | | Terminal Growth Rate | 3.0 | % | Long-term GDP plus life sciences industry premium | ## Data Sources & Benchmarks * **Filings:** SEC EDGAR for Bio-Techne's 10-K and 10-Q filings. * **Presentations:** Bio-Techne Investor Relations page for earnings call transcripts and investor day presentations. * **Peers for benchmarking:** Thermo Fisher Scientific (TMO), Danaher (DHR), Waters Corporation (WAT), Agilent Technologies (A). * **Industry data:** NIH funding budget releases and biopharma R&D spending reports. ## Sources * Bio-Techne Corporation Annual Report on Form 10-K for the fiscal year ended June 30, 2025. * Bio-Techne Q4 FY2025 and Q1/Q2 FY2026 Earnings Press Releases. * Bio-Techne Investor Relations Website (https://investors.bio-techne.com). * Bio-Techne 2025 Corporate Sustainability Report. --- ## Frequently asked questions ### What does Bio-Techne (TECH) do? Bio-Techne Corporation is a global life sciences company that develops, manufactures, and sells bioactive reagents, analytical instruments, and precision diagnostics. It provides critical tools that assist scientific investigations into biological processes, drug discovery, and clinical diagnoses across its Protein Sciences and Diagnostics and Spatial Biology segments. ### How does Bio-Techne generate revenue? Bio-Techne employs a "razor and razorblade" strategy, where proprietary instrument placements drive high-margin, long-term consumable pull-through. Its revenue is primarily generated from its Protein Sciences segment, which accounts for approximately 71.5% of FY2025 revenue, and its Diagnostics and Spatial Biology segment, contributing about 28.5%. ### What is the assumed revenue growth rate for Bio-Techne in this financial model? The financial model for Bio-Techne assumes a revenue growth rate of approximately 12.33%. This key assumption is used to forecast the company's future financial performance from FY2026 to FY2030. ### What is the purpose of the Bio-Techne financial model? The Bio-Techne financial model provides a comprehensive equity valuation and cash flow forecast for the company. It allows analysts to assess the impact of recent portfolio pruning, such as the Exosome Diagnostics divestiture, and the margin expansion trajectory of its core consumables-driven life sciences business. ### Can I download an Excel financial model for Bio-Techne (TECH)? Yes, a downloadable Excel financial model is available for Bio-Techne (TECH). This model offers a forecast horizon from FY2026 to FY2030 and includes detailed assumptions for revenue growth, margins, and capital expenditures. ### What is Bio-Techne's strategy regarding acquisitions and divestitures? Historically, Bio-Techne was a serial bolt-on acquirer, but it has recently shifted its strategic focus to portfolio pruning. This includes divesting non-core assets like its Fetal Bovine Serum business and Exosome Diagnostics CLIA-lab service in early FY2026 to improve overall segment profitability. [Interactive forecast calculator](https://finamodel.com/companies/bio-techne/forecast)