QuidelOrtho (QDEL) 2026年第三季財報電話會議：調降財測，8,000萬美元撙節計畫

重點摘要

• QuidelOrtho 公布 2026 年第三季營收為 6.19 億美元，年減 12%（按固定匯率計算），主因中國市場營收下滑 45%，且定點照護（Point of Care）呼吸道檢驗營收減少 39%。
• 若不計中國市場、呼吸道產品以及美國捐血篩檢業務收尾的影響，營收成長 3%。中國以外地區的實驗室業務營收成長 4%，免疫血液學業務則成長 3%。
• 調整後 EBITDA 為 1.48 億美元，利潤率為 24%。調整後 EPS 為 0.31 美元。
• 該公司將 2026 年營收財測區間收窄至 25.2 億至 25.4 億美元，目前預期調整後 EBITDA 為 5.4 億至 5.45 億美元，調整後 EPS 為 0.65 至 0.70 美元。
• QuidelOrtho 啟動成本轉型與重組計畫，預計將在 2027 年節省超過 8,000 萬美元的年度成本，主要透過初期精簡人力達成。
• 淨負債約為 28 億美元，淨槓桿率則從第二季的 4.3 倍上升至 調整後 EBITDA 的 4.5 倍。管理階層持續將創造現金與降低槓桿列為首要任務。

關鍵財務數據

業務與營運表現

不計中國市場，實驗室與免疫血液學業務占公司營收的 73%。中國以外地區的實驗室業務營收成長 4%，中國以外地區的免疫血液學業務營收則成長 3%。管理階層指出，拉丁美洲、日本及亞太地區均呈現全面性成長。

定點照護（Point of Care）業務營收下滑 27%，其中呼吸道檢驗營收減少 39%。管理階層表示，檢測方案與市占率保持穩定，但呼吸道檢測量有所下降。儘管呼吸道疾病季節似乎較早開始，但公司仍維持謹慎假設，因為提早開始並不一定意味著該季節會更長或更嚴重。

中國市場營收下滑 45%，主因是在全國性體外診斷（IVD）定價調整實施前，客戶與經銷商減少採購並縮減庫存。該指引於 8 月中旬定案，預計年底前將在六個省份開始實施。管理階層預期去庫存將在 2026 年剩餘時間內持續，且定價壓力將在 2027 年進一步加劇。

QuidelOrtho 正在圍繞兩大業務部門進行重組。核心診斷（Core Diagnostics）將涵蓋實驗室、免疫血液學與資訊學，而定點照護診斷（Point of Care Diagnostics）將包含 Sofia、Triage 與 NULEXA。管理階層表示，該架構旨在深化客戶聚焦、明確權責，並使投資決策更貼合各項業務需求。

該公司亦將 VITROS 450 的上市推廣擴展至更多國際市場。NULEXA 仍處於初期推出階段，QuidelOrtho 正聚焦於 2027-2028 年呼吸道疾病季節前，提升裝機量、使用率並擴大既有裝機基礎。

管理階層財測

QuidelOrtho 將 2026 全年營收財測區間從 25.2 億至 26.0 億美元收窄至 25.2 億至 25.4 億美元，主要反映對中國市場前景的最新評估。

該公司目前預期：

• 調整後 EBITDA：5.4 億至 5.45 億美元
• 調整後 EPS：0.65 至 0.70 美元
• 不計中國市場的實驗室與免疫血液學業務成長率：低至中個位數百分比

管理階層預計中國市場約占 2026 年總營收的 8%，降至 2027 年約 4% 至 5%。

此重組計畫預計將在 2027 年產生超過 8,000 萬美元的年度成本節省。節省效益應於 2026 年第四季開始顯現，並在 2027 年逐步擴大，下半年的貢獻將略高。管理階層表示，該計畫應能充分抵銷近期中國市場面臨的預期逆風。

QuidelOrtho 預計將在 2026 年第四季認列 3,000 萬至 3,500 萬美元的一次性重組費用，大部分相關現金流出將發生在該季度。

風險與關注事項

• 中國體外診斷（IVD）定價指引在各省實施的具體時程仍具不確定性。
• 中國市場面臨持續去庫存、醫保報銷比率調降、定價壓力，以及銷售量方面更激烈的競爭壓力。
• 第三季調整後毛利率包含約 300 個基點的關稅退稅、供應商折讓及成本節省效益，管理階層預期這些項目不會在第四季重現。
• 呼吸道檢測需求仍具變數，根據截至第三季的趨勢，公司的展望對第四季檢測狀況採取謹慎假設。
• 第四季自由現金流將因重組相關的現金支出而減少。
• 由於營收下滑導致過去 12 個月調整後 EBITDA 減少，淨槓桿率隨之上升。修訂後的信貸協議將截至 2028 年第二季的最高合併槓桿比率提高至 5.5 倍，隨後將隨時間逐步調降。

分析師問答重點

管理階層澄清，重組計畫預計在 2027 年節省逾 8,000 萬美元，是在過去數年已實現逾 1.4 億美元節省效益基礎上的額外增量。初期節省將主要來自精簡人力，目前亦在評估進一步削減間接支出的機會。

針對中國以外地區實驗室業務成長放緩，管理階層將較上一季放緩的原因部分歸咎於中東市場疲軟以及數個招標項目的時間點影響。管理階層表示，客戶得標率與續約率依然穩健，並未將本季表現視為更廣泛潛在趨勢的證據。

財務長 Micah Young 指出，成本結構、營運資金效率及資本支出紀律，是未來 6 至 12 個月內改善自由現金流的主要可行著力點。他指出，在上半年為負 2.03 億美元後，第三季自由現金流大致損益兩平，同時強調現金創造能力仍低於管理階層的目標。

在被問及潛在的資產出售時，管理階層拒絕針對特定傳聞置評。管理階層表示，所有能夠加速去槓桿並創造股東價值的替代方案均在考慮之列。針對中國市場，管理階層表示該業務在定價變更後仍具備良好的經濟效益，當前的首要任務是保護特許經營業務。

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完整財報電話會議逐字稿

管理層陳述

Operator

Welcome to the QuidelOrtho Third Quarter 2026 Financial Results Conference Call and webcast. [Operator Instructions] Please note, this conference call is being recorded. An audio replay of the conference call will be available on the company's website shortly after this call.

I would now like to turn the call over to Sanjeev Sharma, Vice President of Investor Relations. Sanjeev, please go ahead.

Sanjeev Sharma

Good afternoon, everyone, and thank you for joining us on our earnings call. With us today, we have Brian Blaser, our President and Chief Executive Officer; and Micah Young, our Chief Financial Officer.

This conference call is being simultaneously webcast on the IR section of our website. To assist in the presentation, we also posted supplemental information on the Investor Relations page that will be referenced throughout this call.

Please note that this conference call and supplemental information contain forward-looking statements, including the company's expectations, plans, financial guidance and various strategic initiatives. We assume no obligation to update any forward-looking statements, except as required by law. These statements are made as of today and are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in these statements. Please refer to our SEC filings for a description of potential risks.

In addition, today's call includes discussion of certain non-GAAP financial measures. Tables reconciling these non-GAAP measures to their most directly comparable GAAP measures are available in our earnings release and supplemental information on the Investor Relations page of our website. Lastly, unless stated otherwise, all year-over-year revenue growth rates given on today's call are on a constant currency basis.

With that, I would like to turn the call over to our President and CEO, Brian Blaser.

Brian Blaser

Thanks, Sanjeev, and good afternoon, everyone. I'd like to begin with 3 important takeaways from the quarter. First, the underlying performance of our business remains resilient. Labs and immunohematology, which represents 70% to 75% of our revenue, excluding China, delivered low to mid-single-digit organic growth. Second, our reported results continue to reflect 2 significant near-term headwinds, the impact of China's now finalized nationwide IVD pricing guidelines and the softer respiratory testing environment in point of care. Third, we are acting decisively and launching a new cost transformation and enterprise restructuring program designed to improve profitability and cash generation while evolving our operating model around the distinct needs of our customers and markets. These actions are intended to strengthen execution today and position QuidelOrtho for sustainable, profitable growth over the long term.

Turning to our third quarter results. Total reported revenue was $619 million, down 12% from last year. Revenue increased 3%, excluding China, respiratory and the prior year contribution from the U.S. Donor Screening business, which we are winding down. Labs revenue outside China grew 4%, supported by the strength and durability of our customer relationships and large global installed base. Immunohematology revenue outside China increased 3%, reflecting steady demand across key markets and our strong position in the segment. Together, these results reinforce an important point.

The underlying fundamentals of our business remain healthy. We serve large and attractive diagnostic markets, hold leading positions across multiple categories and benefit from recurring revenue streams supported by long-term customer relationships and a substantial installed base.

Point of Care revenue declined 27% year-over-year, including a 39% decline in respiratory revenue. As anticipated, respiratory demand remained below the prior year period. Given the inherent variability of respiratory trends, our outlook continues to reflect cautious assumptions for the balance of the year based on activity through the end of the third quarter.

China revenue declined 45% year-over-year as distributors and customers continue to reduce purchasing and inventory levels related to the nationwide IVD pricing guidelines, which were finalized in mid-August. Implementation of the guidelines is expected to begin in 6 provinces by the end of this year with timing determined at the provincial level. The final guidelines were generally consistent with the second draft released in June and broadly removed pricing differentiation by methodology.

Provincial implementation timing remains uncertain. Based on what we know today, we expect continued destocking throughout the remainder of 2026 and increased pricing pressure in 2027 as pricing changes are implemented throughout next year.

We are managing this transition with urgency and discipline. We're working closely with our China team, customers and distribution partners to adapt our commercial model as the market evolves. Our priorities are clear: support customers, protect the installed base, align costs with expected business activity and preserve the long-term value of our China franchise.

Today, we also announced a new cost transformation and enterprise restructuring program to position QuidelOrtho for sustainable long-term profitable growth. We are improving our cost structure and reshaping the organization around our customers, their needs and the economics of the business. Enterprise optimization and restructuring are the immediate parts of that work.

The objective is not simply to reduce cost. It is to strengthen underlying performance. As part of this program, we are evolving our operating model around 2 focused businesses, core diagnostics and Point of Care diagnostics. The Point of Care diagnostics business will include our Sofia, Triage and NULEXA product lines aligned with near patient testing performed primarily in clinics, physicians' offices and emergency rooms. Core Diagnostics will bring together our labs, immunohematology and informatics portfolios, serving the needs of clinical laboratories, hospitals and blood banks. The new operating model is designed to increase customer focus, create clear accountability for business performance and better align technology development and investment priorities with the distinct needs of each business. We expect this program to deliver over $80 million in annual savings in 2027. These actions are intended not only to mitigate near-term China headwinds next year, but also to structurally improve QuidelOrtho's earnings profile and cash generation. Our priorities remain consistent: expand profitability, improve free cash flow and reduce leverage. Micah will provide additional details shortly.

As we execute our cost and restructuring program, we plan to protect targeted investments in innovation and growth platforms where we see clear customer value, differentiated capability and attractive returns. We remain committed to making these focused investments to enable the next phase of QuidelOrtho's growth. For example, within our labs business, we are expanding the VITROS 450 launch to additional key international markets, empowering low-volume and community-based labs with our next-generation analyzer designed to deliver differentiated dry slide performance with high quality and consistent results at lower costs.

NULEXA, our Point of Care molecular platform, is another example of our focused approach. Since closing the acquisition of LEX earlier this year, we have made meaningful progress building manufacturing and commercial launch capabilities. NULEXA remains in the early stages of launch, and we are balancing investment with disciplined cost management.

Early customer engagement supports our view that its combination of molecular level performance, speed and workflow simplicity addresses an important unmet need in the Point of Care market. Beyond the initial respiratory menu, NULEXA provides a scalable platform with meaningful menu expansion opportunities. Combined with our broad commercial reach and deep customer relationships in Point of Care diagnostics, we believe NULEXA can become an important contributor to our long-term growth strategy.

As we enter respiratory season, our focus is on building placements, driving utilization and expanding the installed base ahead of the 2027, 2028 season.

And with that, I'll turn the call over to Micah. Micah?

Micah Young

Thank you, Brian, and good afternoon, everyone. Before reviewing our third quarter financial results, I want to provide additional perspective on the cost transformation and enterprise restructuring program announced today and how we expect it to strengthen our earnings profile, cash generation and financial position over time.

Last quarter, I outlined 3 immediate priorities as CFO, strengthen operating discipline, improve cash conversion and reduce leverage. Since then, we have conducted a detailed review of the operating model, cost structure and portfolio to identify where we can simplify the organization, align resources with current market realities and preserve funding for the highest return growth opportunities. Consistent with those priorities, the program announced today is expected to deliver more than $80 million of annual savings in 2027. These actions are designed to align resources with the distinct needs of our customers and markets, strengthen financial discipline and improve the rigor of our investment decisions.

We expect to record approximately $30 million to $35 million of onetime restructuring charges in the fourth quarter, with the majority of the related cash outflow occurring in the fourth quarter of 2026. Together, these actions are intended to create a more efficient cost structure that can absorb near-term headwinds, improve earnings and cash conversion and support sustainable profitable growth.

Let me now review our third quarter results. Total reported revenue was $619 million, representing a 12% year-over-year decline on a constant currency basis. As expected, the quarter was affected by continued pressures in China related to changes in the nationwide IVD pricing guidelines and by a softer respiratory environment. Excluding China, respiratory and the donor screening wind down, revenue increased 3%. Labs and immunohematology represented 73% of total company revenue, excluding China and grew at a low to mid-single-digit rate. Outside China, labs grew 4% and immunohematology grew 3% on a constant currency basis. Growth was broad-based across several key geographies, including Latin America, Japan and Asia Pacific.

China revenue declined 45% year-over-year as customers reduced purchasing and inventory levels in response to the nationwide IVD pricing guidelines. While provincial implementation schedules remain uncertain, we expect continued customer caution and destocking for the remainder of 2026 with the majority of the pricing impact expected in 2027. Based on our current assessment, we expect China to represent approximately 8% of total company revenue in 2026 and approximately 4% to 5% in 2027.

Turning to profitability. Adjusted gross margin was 47.8%, down 90 basis points year-over-year, primarily reflecting lower revenue and unfavorable product mix, partially offset by cost actions. Third quarter gross margin included approximately 300 basis points of benefits from tariff refunds, vendor credits and cost savings that we do not expect to repeat in the fourth quarter.

Non-GAAP operating expenses were approximately 34% of revenue, up 300 basis points year-over-year, primarily reflecting the impact of lower revenue. In absolute dollars, non-GAAP operating expenses declined 3% to approximately $210 million, reflecting continued cost discipline. Adjusted EBITDA was $148 million, representing a 24% margin and adjusted earnings per share was $0.31.

Turning to the balance sheet and cash flow. Improving cash flow and reducing leverage remain among our highest financial priorities. Operating cash flow was $20 million, an improvement of $65 million year-over-year, reflecting improved working capital performance. Net capital expenditures were $19 million compared with $49 million last year, reflecting greater discipline around capital allocation. This resulted in approximately breakeven free cash flow compared with negative $95 million last year and negative $136 million in the second quarter. This represents a meaningful sequential and year-over-year improvement, but it is not yet where we need it to be.

Our focus is on turning the improvement we saw this quarter into sustained cash generation through tighter working capital management, lower capital intensity and structural improvement in profitability.

As I mentioned earlier, our fourth quarter free cash flow will be impacted by the restructuring charges related to the cost transformation and restructuring program we announced today. We expect the majority of the $30 million to $35 million to result in cash outflow in the fourth quarter this year.

During the quarter, we proactively amended our credit agreement to provide additional covenant capacity as we execute the transformation and restructuring program. The amendment increases the maximum consolidated leverage ratio to 5.5x adjusted EBITDA through the second quarter of 2028, after which the covenant steps down over time. We believe securing this additional flexibility was a prudent step that supports our ability to execute the transformation while maintaining our focus on cash generation and deleveraging.

At quarter end, net debt was approximately $2.8 billion and net leverage was 4.5x adjusted EBITDA, including the pro forma adjustments permitted under our credit agreement. This compares with 4.3x in the second quarter, primarily due to the revenue-driven decline in our trailing 12-month adjusted EBITDA. We ended the quarter with $166 million in cash.

Turning to our outlook. Based on our current outlook, we are narrowing full year revenue guidance from $2.52 billion to $2.6 billion to a range of $2.52 billion to $2.54 billion. The change primarily reflects our updated view on China. Consistent with the revised revenue outlook, we now expect full year 2026 adjusted EBITDA of $540 million to $545 million, and adjusted earnings per share of $0.65 to $0.70.

Our assumptions for labs and immunohematology are unchanged, and we continue to expect low to mid-single-digit growth in 2026, excluding China.

Our guidance continues to incorporate a cautious fourth quarter respiratory assumption based on trends through the end of the third quarter.

Finally, improving free cash flow conversion remains an important management priority. We are taking actions across working capital, capital expenditures and our cost structure to drive stronger and more consistent cash generation. The transformation announced today is an important step towards achieving this objective. While meaningful work remains, I'm encouraged by the strength of our underlying business and the progress we are making. We remain focused on disciplined execution and positioning the company to deliver sustainable long-term value for shareholders.

With that, we will open the line for questions.

Operator

[Operator Instructions] Your first question comes from the line of William Bonello with Craig-Hallum Capital Group.

分析師問答

William Bonello

Hopefully, a follow-up that is related. I want to make sure I'm understanding the change in the operating structure. I think if I'm recalling correctly, you've been managed at kind of a geographic level. Is that correct? Is that the change? And then if so or from whatever you're going from, what's sort of the practical implications in terms of commercialization and cost of the restructuring, not the dollar amounts, but what sort of what actually improves?

Brian Blaser

Yes. Thanks, Bill. This is Brian. Yes, historically, we have had a regionally based model, and we recently modified that to be more of a business unit-led model that was matrixed across regions. This is an evolution of the model really designed first to improve profitability, cash flow, support our deleveraging efforts, at the same time, offset the headwinds that we have in China, but it creates additional customer focus on distinct sets of customers.

And Point of Care diagnostics is really a business that's focused on physicians' offices, clinics and emergency rooms. The core diagnostics business is focused on customers and hospitals, reference labs and blood banks. And the new model just creates clear accountability for our business performance and at the same time, allows us to align our development and investment priorities with the needs of those businesses.

As we mentioned on the call, we're expecting to generate over $80 million of savings in 2027. We'll incur about $35 million worth of costs in '26 to make this change. There are some dis-synergies associated with doing that, but we expect those to be fully offset by the savings.

I would say a couple of additional comments there that we are taking care as we do this to minimize the customer-facing disruption associated with it. And in fact, from my point of view, this should result in more customer focus and not less. And so we're excited about the new leaders that we've appointed to those roles and the focus that this is going to bring to our business.

William Bonello

Okay. That's very helpful. And just as a follow-up to that, the $80 million cost saving program, is that just sort of a quantification of the efforts that you've been talking about over the last couple of quarters when you've talked about offsetting some of the industry headwinds? Or should we think of this as an incremental $80 million kind of above and beyond what you were already planning?

Brian Blaser

Yes. Bill, you should think of this as completely new incremental savings to the -- over $140 million that we have generated over the last couple of years in additional savings. Most of the savings is coming through staffing reductions initially, and this will be the first part of the effort. Beyond this, we are going to be looking at even more savings in terms of indirect spend across the P&L over the next several months as we get our heads around this.

Operator

Your next question comes from the line of Tycho Peterson with Jefferies.

Tycho Peterson

I want to probe on the labs. Ex China, you did have a bit of a decel from 9% last quarter to 4% this quarter. The comps were pretty similar. So maybe can you just touch on that? Was that attributable to Middle East dynamics, other items? What drove the softness there?

Brian Blaser

Yes. I would say there's a little bit of softness related to the Middle East. If you look across the P&L regionally, EMEA was kind of our softest region. There's also some order timing built into that. We had a couple of tenders that we were shifting across quarterly boundaries. But generally speaking, we're seeing still underlying solid business performance in terms of win rates, renewal rates on our existing business. And so I don't see that as any sort of real underlying trend there, Tycho.

Tycho Peterson

Okay. And then maybe just following up on the free cash flow. I mean, you've been in the seat over 100 days. I guess, could we get your frank assessment of the situation? I mean, understanding, obviously, there's always stocking dynamics around respiratory. But apart from that, what are the tangible items you found that are inhibiting greater free cash flow generation? And do you believe those things are actionable in the next 6 to 12 months here?

Micah Young

Yes. Thank you for the question. So the actions we're taking are designed to really -- we're trying to enhance profitability, improve cash conversion and also reduce leverage, as you know. The areas we're concentrating on are ones that are in our direct control. It's improving cost structure, driving working capital efficiency and reducing capital expenditures. And I think -- this quarter, we've made some progress, still not where we want it to be, but we saw a quarter of breakeven free cash flow when the first half of the year was negative $203 million of free cash flow. So we're seeing progress there.

The cost actions we're taking today and the restructuring program is going to continue to structurally improve our ability to drive higher earnings and free cash flow over time. And we are expecting to see some impact, as we mentioned in the prepared remarks, on our fourth quarter free cash flow that's going to be impacted by onetime restructuring charges with the majority of that being impacting our cash flow in Q4. And we're still working through.

I think if you recall in the last earnings call, I mentioned that with the lower -- or the demand headwinds with China as well as a softer respiratory season, we're still managing through some of those working capital impact this year. But all those areas I mentioned, those are the areas we're focused on. We're seeing improvement already in capital expenditures, and that's on top of working through some of the manufacturing transitions at our Raritan facility. So I think we're continuing to really focus in those areas and hopefully continue to show improvement as we move forward.

Tycho Peterson

Okay. That's helpful. And then just one last quick one. You're resegmenting LEX into Point of Care. I assume you don't want to sell that asset. So does that mean there is no deal happening? Are you able to comment on that?

Brian Blaser

Yes. Thanks, Tycho. I'm not going to comment on any specific rumors around that. All I will say is that cash flow improvement and deleveraging the company are our highest priorities. We are looking at every option that supports deleveraging and that creates shareholder value. But right now, our priorities for the business are clear. We're looking to improve profitability, increase cash flow, reduce leverage and this cost transformation and restructuring program that we announced today is an important step, frankly, to make the company more efficient as we work through those priorities.

Operator

Our last question comes from the line of Jack Meehan with Operon Research.

Jack Meehan

For my first question, I wanted to ask about your estimate for China going to 4% to 5% of total company sales next year. Is it possible you could just provide a little bit more color around what you're seeing from today or this year at 8% to go to that? And what -- are you comfortable that this could be a floor? Are there pieces like immunohematology that give you comfort around that? Just any color around how you came up with that estimate would be great.

Brian Blaser

Yes. So Jack, we have seen more accelerated destocking by customers than we originally expected when we originally put our estimates together for the Q2 call. There is still uncertainty around the provincial level implementation time line. We've got 6 provinces expected to begin by the end of this year, and then each province is establishing their own time line for next year.

And as you think about this year, it's really mainly a destocking situation. As you look into next year, it's really 3 factors. You've got some continued destocking overlapping perhaps in the early part of 2026. But then we have the impact of lower reimbursement rates that are pressuring prices. And then on top of that, you've got increased competitive pressure that are impacting volumes. So we -- as you can imagine, we put together some ranges of how we are thinking about each of those factors impacting the business, both in 2026 and 2027.

At this point, we're expecting China to be about 8% of total revenues this year and in that 4% to 5% for 2027. And of course, this drives the cost transformation and restructuring program that we've launched today to mitigate that. And that should mitigate not only the China headwinds, but also better position the company in the long term in terms of profitability, cash flow and deleveraging structurally.

Jack Meehan

Can you help us -- maybe just building off that, can you help us put in context the $80 million savings target kind of in context of the China headwind? I think you mentioned the expectation for 2027, it was going to evolve to be more of a pricing impact. Should we think of those 2 things as offsetting? Or do you think one could be bigger than the other?

Micah Young

Yes. No, I think as we look at the cost transformation, I mean, we're -- and we'll talk -- let me talk a little bit about the timing of that. But we expect over $80 million of savings in 2027. We expect that to start in the fourth quarter this year and then ramp throughout 2027 with slightly more weight in the second half than the first half.

Based on our expectations of 4% to 5% of revenue mix of China next year, this program, as Brian mentioned, should more than offset those near-term headwinds, but also improve our cost structure and our earnings profile. So I think as we look at that and the timing, that's where a lot of this was focused on. And also, there's going to be some disproportionate amount also with China in that savings.

Jack Meehan

Great. If you don't mind me squeezing in one more question. I think you mentioned guidance assumes respiratory conditions as of the end of the third quarter. I have to ask because the -- me and family with the kids back-to-school has been sick a number of times in the past few weeks, and it looks like some of the CDC data is picking up. I was curious if you could comment at all around what you're seeing and whether you feel like maybe that's a conservative starting point?

Brian Blaser

Yes. Jack, well, hopefully, you guys are reliable customers for us. But yes, we're seeing an early start to the season. But as you know, an early season doesn't always mean a higher -- longer peak or a higher degree of illness, greater severity of illness. And so we continue to maintain a very cautious outlook based on the results that we saw through Q3. And I would also say that throughout the year, although the testing has been lower, we also haven't seen any changes in testing protocols. It's just a lower season up to this point, and our share at this point remains very stable.

Operator

Our final question comes from the line of Casey Woodring with JPMorgan.

Casey Woodring

I guess I wanted to just ask one on the China business and how you're thinking about the outlook kind of longer term. I mean, from the standpoint of value unlock and kind of a normalized growth profile, would selling that asset kind of and using that cash to pay down debt be, I guess, on the table? I think another analyst asked about the Point of Care sale earlier, but like would divesting China be on the table? I know another one of your peers has exited the region in diagnostics and has seemingly not looked back since. So would just be curious on that front.

Brian Blaser

Yes. Thanks, Casey. At this point, we still think that our economics are favorable in China even post these changes. And so our view is that we're going to do what we can to protect our business in China in the short term. Over the long term, again, I go back to what I said about the earlier question, which is we look at all different alternatives to optimize shareholder value and provide the ability for us to generate cash flow and delever the business faster.

Operator

There are no further questions at this time. I will now turn the call back to Brian Blaser for closing remarks.

Brian Blaser

Thank you, operator, and thank all of you for the questions today. Let me close with 2 final messages. First, China pricing changes and respiratory softness weighed on our third quarter and year-to-date performance, but continued growth in labs and immunohematology outside China reinforces the resilience and long-term value of our core franchises.

Second, we are taking decisive action to accelerate QuidelOrtho's next chapter. The new cost transformation and enterprise restructuring announced today are not temporary responses to near-term pressure. They represent a broader operating model transformation designed to strengthen accountability, improve our cost structure and better align the organization with the distinct needs of our customers and markets.

We are committed to disciplined execution. In the near term, our priorities are to improve profitability, increase cash flow and reduce leverage. Over time, these actions are intended to create a stronger, more focused and more competitive QuidelOrtho.

Thank you for joining us today and for your support and interest in our business. We look forward to updating you on our progress next quarter. Thank you.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.