Avantor’s first quarter results fell short of Wall Street’s revenue expectations, and the market responded negatively, reflecting investor concern over the company’s near-term growth trajectory. Management attributed the shortfall to weakened demand across education and government end markets, as well as a sharp decline in funding for bench-stage biotech companies. CEO Michael Stubblefield was candid about performance, stating, "We are not satisfied with our first quarter performance." He highlighted that while earnings and margins were in line with internal plans, the top line was pressured by external factors and competitive intensity, particularly in the Lab Solutions business.
Is now the time to buy AVTR? Find out in our full research report (it’s free).
Avantor (AVTR) Q1 CY2025 Highlights:
- Revenue: $1.58 billion vs analyst estimates of $1.61 billion (5.9% year-on-year decline, 1.6% miss)
- Adjusted EPS: $0.23 vs analyst estimates of $0.23 (in line)
- Adjusted EBITDA: $269.5 million vs analyst estimates of $277.4 million (17% margin, 2.8% miss)
- Operating Margin: 9.3%, in line with the same quarter last year
- Organic Revenue fell 2.1% year on year (-6.3% in the same quarter last year)
- Market Capitalization: $9.25 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Avantor’s Q1 Earnings Call
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Michael Ryskin (Bank of America) asked about the sharp sequential improvement implied in second-quarter guidance, and CFO Brent Jones responded that Q2 is typically stronger and that recent actions and momentum support the outlook.
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Vijay Kumar (Evercore) questioned the weakness in controlled environment consumables, to which CEO Michael Stubblefield explained that customers are optimizing usage due to inflation and macro pressures, but order trends are improving with recent commercial actions.
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Rachel Vatnsdal Olson (JPMorgan) asked for a breakdown of declines in academic and government spending, and Stubblefield detailed pullbacks in both equipment and consumables, with ongoing caution embedded in guidance.
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Daniel Brennan (TD Cowen) pressed for clarity on tariff impact assumptions, and Jones confirmed that no explicit tariff cost has been included in guidance, as the situation remains fluid and management aims to offset any potential costs.
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Luke Sergott (Barclays) inquired about the nature of Lab Solutions’ business transformation, with Stubblefield and Jones emphasizing investment in digital tools, service levels, and portfolio innovation to counter competitive and macroeconomic pressures.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of recovery in the Lab Solutions segment, particularly as new commercial and digital strategies are implemented; (2) the effectiveness of expanded cost transformation initiatives in supporting margins and free cash flow; and (3) any shifts in demand related to policy changes, tariffs, or funding trends in key end markets. Progress on product adoption from new partnerships will also be closely watched as a potential driver of diversification.
Avantor currently trades at $13.48, down from $15.47 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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