Harvard Bioscience (NASDAQ:HBIO) executives highlighted a year of “foundation building” and cost and balance sheet actions while outlining expectations for a return to growth in 2026 during the company’s fourth-quarter and full-year 2025 earnings call.
Management points to refinancing, manufacturing consolidation, and governance changes
President and CEO John Duke said 2025 represented a “pivotal year of foundation building,” noting a series of actions taken over the past eight months aimed at improving financial flexibility and simplifying operations.
He also cited governance and leadership updates, including the appointment of four new board members since June, the ongoing process to establish a product and scientific advisory board, and the formal naming of Mark Frost as chief financial officer.
Fourth-quarter results: revenue above guidance midpoint; margin expansion and EBITDA growth
For the fourth quarter, Duke said revenue was $23.7 million, above the midpoint of the company’s $22.5 million to $24.5 million guidance range. Frost noted the result was below the $24.6 million reported in the fourth quarter of 2024, adding that a 43-day government shutdown affected the company’s ability to “overachieve” during the period.
Gross margin was 59.77% for the quarter, at the high end of the company’s 58% to 60% guidance range and up 260 basis points from 57.1% in the prior-year quarter, which Frost described as the highest gross margin over the last seven quarters. Management attributed the margin performance to cost actions taken at the end of 2024 and in 2025, as well as an increasing benefit from higher-margin new product innovation (NPI) revenue.
Operating income was $1.7 million, up from flat in the year-ago quarter, and adjusted operating income was $3.3 million, up from $2.5 million. Adjusted EBITDA increased 27% year over year to $3.8 million, driven by cost reductions and expense management, including lower manufacturing and SG&A headcount costs.
Full-year 2025: revenue decline tied to tariffs and delayed NIH funding; goodwill impairment weighed on GAAP
For full-year 2025, Frost reported revenue of $86.6 million, down from $94.1 million in 2024. He said the decline was primarily due to tariffs and delayed NIH funding. Frost added that tariff impacts began to subside later in the year, while NIH funding delays continued to affect the timing of some orders, particularly in the company’s preclinical telemetry products.
Full-year gross margin was 57.77%, down from 58.2% in 2024, which Frost attributed to lower revenue, partially offset by manufacturing cost actions. GAAP operating income was negative $48.6 million compared to negative $6.2 million in the prior year, which Frost said primarily reflected a goodwill impairment charge taken earlier in the year. On an adjusted basis, operating income improved to $6.2 million from $5.3 million, driven by cost reductions, improved expense management, and a favorable mix shift toward higher-margin products.
Adjusted EBITDA increased 12.5% to $8.1 million from $7.2 million in 2024.
Frost also discussed additional full-year metrics, including:
- GAAP loss per share of $1.28, compared with a GAAP loss per share of $0.28 in 2024; Frost said the higher GAAP loss was largely due to the goodwill charge in the first quarter.
- Adjusted loss per share of $0.02, compared with adjusted earnings per share of $0.03 in 2024.
- Cash flow from operations of $6.7 million, up from $1.4 million, which Frost attributed to disciplined working capital management, improved operating income, and efforts related to payroll tax refunds.
- Net debt of $31.4 million, down $1.8 million from last year, reflecting payments on the prior debt facility and additional liquidity under the new agreement.
Frost also said the company successfully remediated material weaknesses and a significant deficiency during 2025, calling it another step in building the foundation of a healthier business.
Strategic focus: “translational science bridge,” NPI platforms, and recurring revenue
Duke said his conversations with customers and partners reinforced his view that the life science industry is undergoing a “fundamental shift,” pointing to the challenge of drug development efficiency and a growing embrace of “New Approach Methodologies” (NAMs). He described Harvard Bioscience’s opportunity as evolving from a traditional life science tools provider into an enabler of translational science by connecting in vivo and in vitro research to help customers generate more predictive, human-relevant data earlier in development.
Duke outlined four stated priorities:
- Leading the translational science bridge: Strengthening the company’s position between preclinical and organoid-based research, including leveraging telemetry capabilities as an extension into organoids and 3D biology platforms.
- Accelerating high-margin innovation: Focusing the NPI pipeline on platforms including SoHo Telemetry, BTX for bioproduction, Mesh MEA, and Incub8.
- Expanding consumables and recurring revenue: Management said approximately 55% of revenue is recurring and that it is prioritizing higher-margin consumables, service, and software to improve visibility and durability of revenue.
- Operational excellence and disciplined growth: Continued focus on cost discipline, with manufacturing consolidation and refinancing intended to support profitability, fund innovation, and enable deleveraging over time.
2026 outlook: modest revenue growth expected; NIH timing and Asia cadence discussed
Management introduced full-year guidance for 2026, projecting revenue growth of 2% to 4% and gross margin of 58% to 60%. Frost said the company expects “revenue to ramp throughout the year” on a year-over-year percentage basis, supported by stronger NPI revenue. For profitability, Frost guided to adjusted EBIT growth of 6% to 10% and said the company is also introducing adjusted EBITDA guidance, noting it is a key operating metric and is linked to a covenant in the company’s structured debt agreement.
For the first quarter of 2026, the company expects revenue of $20 million to $22 million, adjusted gross margin of 57% to 59%, and adjusted EBITDA of $1 million to $2.2 million. Frost noted that the first quarter of last year saw only minimal impact from NIH-related challenges.
On the call’s Q&A, Duke said that after NIH approval in early February, management expects to see a positive impact “towards the end of Q1 as well as going into Q2,” while Frost added that because the company is build-to-order, much of the revenue benefit may be seen in the second quarter. Frost also clarified that NIH revenue is about 20% of U.S. revenue.
Asked about two focus products, BTX and Mesh MEA, management said it expects both to grow in double digits in 2026. On debt strategy, Frost said the new structure includes no amortization in the first two years and offers optionality, including the ability to convert Term Loan A to an asset-based lending facility and the potential for Term Loan C to be converted to equity, which he said could reduce leverage in the future.
Regarding Asia Pacific performance, Duke said the company saw improvement after tariffs had caused the China business to “ground to a halt” last year, with catch-up orders filled in the fourth quarter. He said management expects a return to a more normal cadence in Asia, barring further tariff developments. Duke also said the company ended the year with its highest backlog in more than two years and that it has continued to maintain that level. On demand in the pharmaceutical and biotech portion of the market, Duke said that business was up year-to-date and is expected to continue, which he said was reflected in guidance.
About Harvard Bioscience (NASDAQ:HBIO)
Harvard Bioscience, Inc develops, manufactures and distributes life science research instruments and consumables used by academic, biopharmaceutical and government laboratories worldwide. The company’s product portfolio spans cellular physiology, microfluidics, electrophysiology and lab automation, providing tools that enable researchers to study everything from cell behavior and organ function to drug delivery and tissue mechanics.
Through its operating units—most notably Harvard Apparatus, BTX, Radnoti and Warner Instruments—Harvard Bioscience offers a diverse range of scientific equipment including precision pumps, stereotaxic instruments, electroporation and gene delivery systems, perfusion systems and microinjection tools.
