QuidelOrtho Narrows 2026 Outlook as Q3 Revenue Falls

QuidelOrtho Corporation (Nasdaq: QDEL) narrowed its full-year 2026 guidance after third-quarter revenue fell 11.6% year over year to $618.9 million, as lower respiratory product sales and continued demand pressure in China offset growth in parts of its core business outside the country.

The diagnostics company now expects 2026 revenue of $2.52 billion to $2.54 billion, compared with its previous range of $2.52 billion to $2.60 billion. It also narrowed adjusted EBITDA guidance to $540 million to $545 million from $540 million to $560 million, while adjusted diluted earnings per share are projected at $0.65 to $0.70, versus the prior range of $0.65 to $0.90.

QuidelOrtho said the revised ranges reflect continued China demand headwinds related to final in-vitro diagnostics pricing guidelines. The company expects Labs and Immunohematology revenue, excluding China, to continue growing at low- to mid-single-digit rates.

Respiratory and China sales weigh on revenue

Third-quarter respiratory revenue declined 38.7% to $68.8 million. Revenue from China fell 45.5% on a constant-currency basis to $48.9 million, including a 48.7% decline in China Labs revenue and a 25.7% decrease in China Immunohematology revenue.

Point of Care revenue dropped 27.2% in constant currency to $119.6 million, while Labs revenue declined 5.9% to $353.2 million. Donor Screening revenue fell 88.4% to $1.7 million, and Molecular Diagnostics revenue decreased 49.3% to $2.4 million.

Immunohematology was comparatively stable, with revenue of $142 million and constant-currency growth of 0.9%. Excluding China, Labs revenue increased 3.8% in constant currency, while Immunohematology grew 3%. Total revenue excluding respiratory products, China and U.S. Donor Screening rose 3% in constant currency to $501.2 million.

Geographically, North American revenue declined 13.4% in constant currency to $330.7 million, while EMEA decreased 2.8% to $86.9 million. JPAC revenue grew 7.5% in constant currency to $76.4 million, and Latin America increased 9.5% to $76 million.

Recurring revenue from assays, reagents, consumables and services accounted for 96% of quarterly sales, with instruments representing the remaining 4%.

Adjusted profit and margins decline

Adjusted EBITDA was $148 million, down from $177.1 million a year earlier, producing an adjusted EBITDA margin of 23.9%. Adjusted diluted EPS fell 61% to $0.31.

Adjusted gross margin contracted by 90 basis points to 47.8%. Adjusted operating expenses declined 3% to $210 million, including selling, marketing and administrative expenses of $170 million and research and development spending of $40 million.

On a GAAP basis, QuidelOrtho reported an operating loss of $7.5 million and a net loss of $53.8 million. The prior-year quarter included a $700.7 million goodwill impairment charge and resulted in a net loss of $733 million. The latest quarter included $50.8 million of intangible-asset amortization, a $12.5 million asset impairment charge and $7.1 million of restructuring, integration and other charges.

For the first nine months of 2026, revenue declined 7.8% in constant currency to $1.87 billion. Adjusted EBITDA totaled $386 million, adjusted diluted EPS fell 75% to $0.41, and adjusted gross margin decreased 300 basis points to 45.3%.

Cash flow and leverage remain constraints

Third-quarter free cash flow was $0.3 million, based on $20 million of operating cash flow, $20 million of capital expenditures and $1 million of proceeds from asset disposals. For the first nine months, free cash flow was negative $203 million, reflecting $124 million of cash used in operations and $81 million of capital expenditures, partly offset by $2 million of disposal proceeds.

QuidelOrtho ended the quarter with $166 million in cash and $2.8 billion of net debt. Net debt was 5.2 times trailing adjusted EBITDA, while the pro forma leverage ratio under its credit agreement was 4.5 times.

For 2026, management assumes depreciation of $255 million to $260 million, interest expense of $219 million to $223 million, an effective tax rate of about 27%, and capital expenditures of $115 million to $125 million, excluding instruments placed under reagent rental agreements.

The outlook remains subject to demand fluctuations for respiratory and non-respiratory products, China reimbursement and pricing changes, supply-chain and production disruptions, product-development or regulatory delays, tariffs and trade-policy developments, and the execution of restructuring and other strategic initiatives.