Qiagen N.V.

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QGEN

NL0015001WM6

Biotechnology & Medical Research

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Qiagen N : U.S. GAAP Quarterly Report for the Period Ended September 30, 2024 Form 6 K

November 08, 2024 at 06:09 am EST

U.S. GAAP Quarterly Report for the Period Ended September 30, 2024

Table of Contents



Condensed Consolidated Financial Statements
2	Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023
4	Condensed Consolidated Statements of Income (Loss) (unaudited) for the three and nine months ended September 30, 2024 and 2023
5	Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2024 and 2023
6	Condensed Consolidated Statements of Changes in Equity (unaudited) for the three and nine months ended September 30, 2024 and 2023
8	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2024 and 2023
10	Notes to the Condensed Consolidated Financial Statements (unaudited)

33	Operating and Financial Review and Prospects
41	Quantitative and Qualitative Disclosures About Market Risk
42	Recent Authoritative Pronouncements
42	Application of Critical Accounting Estimates
42	Off-Balance Sheet Arrangements
43	Legal Proceedings
43	Risk Factors


Condensed Consolidated Financial Statements
QIAGEN N.V. and Subsidiaries Condensed Consolidated Balance Sheets
(in thousands)	Notes	September 30, 2024	December 31, 2023

(unaudited)
Assets
Current assets:
Cash and cash equivalents	$972,985	$668,084
Short-term investments	507,379	389,698
Accounts receivable, net of allowance for credit losses of $21,157 and $17,296, respectively	345,581	381,877
Inventories, net	(5)	321,699	398,385
Prepaid expenses and other current assets	(9)	306,429	309,516
Total current assets	2,454,073	2,147,560
Long-term assets:
Property, plant and equipment, net of accumulated depreciation of $564,665 and $516,765, respectively	759,932	765,037
Goodwill	(6)	2,486,242	2,475,732
Intangible assets, net of accumulated amortization of $762,194 and $748,590, respectively	(6)	330,829	526,821
Other long-term assets	(7, 9)	239,121	200,040
Total long-term assets	3,816,124	3,967,630
Total assets	$6,270,197	$6,115,190

The accompanying notes are an integral part of these condensed consolidated financial statements.



QIAGEN N.V. and Subsidiaries Condensed Consolidated Balance Sheets
(in thousands, except par value)	Notes	September 30, 2024	December 31, 2023

(unaudited)
Liabilities and equity
Current liabilities:
Current portion of long-term debt	(8)	$555,257	$587,970
Accrued and other current liabilities	(3, 4, 9, 10)	494,293	407,168
Accounts payable	79,018	84,155
Total current liabilities	1,128,568	1,079,293
Long-term liabilities:
Long-term debt, net of current portion	(8)	1,364,584	921,824
Other long-term liabilities	(9)	247,051	306,309
Total long-term liabilities	1,611,635	1,228,133
Commitments and contingencies	(15)
Equity:
Preference shares, 0.01 EUR par value, authorized-450,000 shares, no shares issued and outstanding	-	-
Financing preference shares, 0.01 EUR par value, authorized-40,000 shares, no shares issued and outstanding	-	-
Common shares, 0.01 EUR par value, authorized-410,000 shares, issued-223,904 and 230,829 shares, respectively	(13)	2,601	2,702
Additional paid-in capital	(13)	1,655,076	1,915,115
Retained earnings	2,362,542	2,456,800
Accumulated other comprehensive loss	(13)	(413,475)	(433,830)
Less treasury shares, at cost-1,647 and 2,627 shares, respectively	(76,750)	(133,023)
Total equity	3,529,994	3,807,764
Total liabilities and equity	$6,270,197	$6,115,190

The accompanying notes are an integral part of these condensed consolidated financial statements.



QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Income (Loss) (Unaudited)
Three Months Ended	Nine Months Ended
September 30,	September 30,
(in thousands, except per share data)	Notes	2024	2023	2024	2023

Net sales	(4)	$501,869	$475,894	$1,457,012	$1,456,149
Cost of sales:
Cost of sales	(3)	179,817	161,864	777,922	490,407
Acquisition-related intangible amortization	13,745	16,070	45,030	48,154
Total cost of sales	193,562	177,934	822,952	538,561
Gross profit	308,307	297,960	634,060	917,588
Operating expenses:
Sales and marketing	111,262	111,462	337,069	342,434
Research and development	44,453	47,934	144,889	152,545
General and administrative	29,394	28,649	85,580	90,780
Acquisition-related intangible amortization	2,351	2,713	7,787	8,072
Restructuring, acquisition, integration and other, net	(3)	8,744	10,021	80,122	24,434
Total operating expenses	196,204	200,779	655,447	618,265
Income (loss) from operations	112,103	97,181	(21,387)	299,323
Other income (expense):
Interest income	18,254	20,380	52,924	59,731
Interest expense	(11,484)	(13,018)	(32,698)	(40,969)
Other expense, net	(2,417)	(4,713)	(3,544)	(7,152)
Total other income, net	4,353	2,649	16,682	11,610
Income (loss) before income tax expense	116,456	99,830	(4,705)	310,933
Income tax expense	(11)	18,400	22,012	26	67,294
Net income (loss)	$98,056	$77,818	($4,731)	$243,639
Basic earnings (loss) per common share	$0.44	$0.34	($0.02)	$1.07
Diluted earnings (loss) per common share	$0.44	$0.34	($0.02)	$1.06

Weighted-average common shares outstanding:
Basic	222,314	228,258	222,712	228,104
Diluted	224,035	230,613	222,712	230,578

The accompanying notes are an integral part of these condensed consolidated financial statements.



QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended
September 30,
(in thousands)	Notes	2024	2023

Net income	$98,056	$77,818
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods:
(Losses) gains on cash flow hedges, net of $11,344 tax benefit and $2,140 tax expense, respectively	(9)	(32,624)	6,155
Reclassification adjustments on cash flow hedges, net of $12,763 tax expense and $3,287 tax benefit, respectively	(9)	36,706	(9,454)
Cash flow hedges, net of tax	4,082	(3,299)
Net investment hedge	(9)	(18,888)	13,048
Foreign currency translation adjustments, net of $0 tax and $0 tax, respectively	32,877	(30,534)
Other comprehensive income (loss)	18,071	(20,785)
Comprehensive income	$116,127	$57,033



Nine Months Ended
September 30,
(in thousands)	Notes	2024	2023

Net (loss) income	($4,731)	$243,639
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods:
Gains (losses) on cash flow hedges, net of $857 tax expense and $3,499 tax benefit, respectively	(9)	2,465	(10,062)
Reclassification adjustments on cash flow hedges, net of $324 tax benefit and $1,412 tax expense, respectively	(9)	(930)	4,059
Cash flow hedges, net of tax	1,535	(6,003)
Net investment hedge	(9)	(6,481)	3,465
Foreign currency translation adjustments, net of $0 tax and $0 tax, respectively	25,301	(32,058)
Other comprehensive income (loss)	20,355	(34,596)
Comprehensive income	$15,624	$209,043

The accompanying notes are an integral part of these condensed consolidated financial statements.



QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in thousands)	Notes	Common shares	Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss	Treasury shares	Total equity
Shares	Amount	Shares	Amount

Balance at June 30, 2024	223,904	$2,601	$1,646,189	$2,265,463	($431,546)	(1,660)	($77,444)	$3,405,263
Capital repayment	(13)	-	-	37	-	-	-	-	37
Net income	-	-	-	98,056	-	-	-	98,056
Unrealized loss, net on hedging contracts	(9)	-	-	-	-	(51,512)	-	-	(51,512)
Realized loss, net on hedging contracts	(9)	-	-	-	-	36,706	-	-	36,706
Translation adjustment, net	(13)	-	-	-	-	32,877	-	-	32,877
Issuance of common shares in connection with stock plan	-	-	-	(977)	-	19	977	-
Tax withholding related to vesting of stock awards	(12)	-	-	-	-	-	(6)	(283)	(283)
Share-based compensation	(12)	-	-	8,850	-	-	-	-	8,850
Balance at September 30, 2024	223,904	$2,601	$1,655,076	$2,362,542	($413,475)	(1,647)	($76,750)	$3,529,994

Balance at June 30, 2023	230,829	$2,702	$1,890,023	$2,283,062	($417,902)	(2,647)	($134,277)	$3,623,608
Net income	-	-	-	77,818	-	-	-	77,818
Unrealized gain, net on hedging contracts	(9)	-	-	-	-	19,203	-	-	19,203
Realized gain, net on hedging contracts	(9)	-	-	-	-	(9,454)	-	-	(9,454)
Translation adjustment, net	(13)	-	-	-	-	(30,534)	-	-	(30,534)
Share-based compensation	(12)	-	-	13,059	-	-	-	-	13,059
Balance at September 30, 2023	230,829	$2,702	$1,903,082	$2,360,880	($438,687)	(2,647)	($134,277)	$3,693,700

The accompanying notes are an integral part of these condensed consolidated financial statements.



QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in thousands)	Notes	Common shares	Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss	Treasury shares	Total equity
Shares	Amount	Shares	Amount

Balance at December 31, 2023	230,829	$2,702	$1,915,115	$2,456,800	($433,830)	(2,627)	($133,023)	$3,807,764
Capital repayment	(13)	(6,925)	(101)	(292,832)	-	-	79	-	(292,933)
Net loss	-	-	-	(4,731)	-	-	-	(4,731)
Unrealized loss, net on hedging contracts	(9)	-	-	-	-	(4,016)	-	-	(4,016)
Realized gain, net on hedging contracts	(9)	-	-	-	-	(930)	-	-	(930)
Translation adjustment, net	(13)	-	-	-	-	25,301	-	-	25,301
Issuance of common shares in connection with stock plan	-	-	-	(89,527)	-	1,679	89,527	-
Tax withholding related to vesting of stock awards	(12)	-	-	-	-	-	(778)	(33,254)	(33,254)
Share-based compensation	(12)	-	-	32,793	-	-	-	-	32,793
Balance at September 30, 2024	223,904	$2,601	$1,655,076	$2,362,542	($413,475)	(1,647)	($76,750)	$3,529,994

Balance at December 31, 2022	230,829	$2,702	$1,868,015	$2,160,173	($404,091)	(3,113)	($160,188)	$3,466,611
Net income	-	-	-	243,639	-	-	-	243,639
Unrealized loss, net on hedging contracts	(9)	-	-	-	-	(6,597)	-	-	(6,597)
Realized loss, net on hedging contracts	(9)	-	-	-	-	4,059	-	-	4,059
Translation adjustment, net	(13)	-	-	-	-	(32,058)	-	-	(32,058)
Issuance of common shares in connection with stock plan	-	-	-	(42,932)	-	840	43,095	163
Tax withholding related to vesting of stock awards	(12)	-	-	-	-	-	(374)	(17,184)	(17,184)
Share-based compensation	(12)	-	-	35,067	-	-	-	-	35,067
Balance at September 30, 2023	230,829	$2,702	$1,903,082	$2,360,880	($438,687)	(2,647)	($134,277)	$3,693,700

The accompanying notes are an integral part of these condensed consolidated financial statements.



QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended
September 30,
(in thousands)	Notes	2024	2023

Cash flows from operating activities:
Net (loss) income	($4,731)	$243,639
Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects of businesses acquired:
Depreciation and amortization	157,716	153,766
Non-cash impairments	(3, 7)	200,270	4,158
Amortization of debt discount and issuance costs	(8)	15,391	25,143
Share-based compensation expense	(12)	32,793	35,067
Deferred tax benefit	(32,313)	(14,421)
Loss on marketable securities	(7)	342	-
Other items, net including fair value changes in derivatives	8,434	7,174
Net changes in operating assets and liabilities:
Accounts receivable	31,909	(9,039)
Inventories	67,673	(58,830)
Prepaid expenses and other current assets	2,556	(250)
Other long-term assets	423	(577)
Accounts payable	(1,106)	(17,451)
Accrued and other current liabilities	(13,646)	(62,832)
Income taxes	10,897	1,499
Other long-term liabilities	5,434	1,041
Net cash provided by operating activities	482,042	308,087



QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended
September 30,
(in thousands)	Notes	2024	2023

Cash flows from investing activities:
Purchases of property, plant and equipment	(118,483)	(98,260)
Purchases of intangible assets	(6)	(3,103)	(12,320)
Purchases of short-term investments	(561,377)	(905,617)
Proceeds from redemptions of short-term investments	443,173	1,151,742
Cash paid for acquisitions, net of cash acquired	-	(149,532)
Cash paid for collateral asset	(9)	(926)	(12,557)
Purchases of investments, net	(7)	(1,728)	(2,657)
Net cash used in investing activities	(242,444)	(29,201)
Cash flows from financing activities:
Proceeds from long-term debt, net of issuance costs	(8)	496,352	-
Capital repayment	(13)	(292,099)	-
Repayment of long-term debt	(8)	(101,536)	(400,000)
Proceeds from exercise of call options related to cash convertible notes	-	36,762
Payment of intrinsic value of cash convertible notes	-	(36,762)
Proceeds from issuance of common shares	-	163
Tax withholding related to vesting of stock awards	(12)	(33,254)	(17,183)
Cash paid for collateral liability	(9)	(2,550)	(9,371)
Other financing activities	(13)	(833)	-
Net cash provided by (used in) financing activities	66,080	(426,391)
Effect of exchange rate changes on cash and cash equivalents	(777)	(3,229)
Net increase (decrease) in cash and cash equivalents	304,901	(150,734)
Cash and cash equivalents, beginning of period	668,084	730,669
Cash and cash equivalents, end of period	$972,985	$579,935

The accompanying notes are an integral part of these condensed consolidated financial statements.

Notes to the Condensed Consolidated Financial Statements (unaudited)

September 30, 2024

1.Corporate Information

QIAGEN N.V. (QIAGEN) is a public limited liability company (naamloze vennootschap) under Dutch law with a registered office at Hulsterweg 82, 5912 PL Venlo, The Netherlands. QIAGEN N.V., a Netherlands holding company, and subsidiaries (we, our or the Company) is a leading global provider of Sample to Insight solutions that enable customers to gain valuable molecular insights from any biological sample. Our sample technologies isolate and process deoxyribonucleic acid (DNA), ribonucleic acid (RNA) and proteins - the building blocks of life - from blood, tissue and other materials. Assay technologies make these biomolecules visible and ready for analysis using a range of technologies. Bioinformatics software and knowledge bases are used to interpret complex genomic data sets to provide relevant, actionable insights. Instruments and automation solutions are used to tie together these products into seamless and cost-effective workflows. We provide solutions to more than 500,000 customers around the world in Molecular Diagnostics (human healthcare) and Life Sciences (academic research, pharma and biotech companies, and applied applications such as human identification/forensics and food safety). As of September 30, 2024, we employed more than 5,800 people in over 35 locations worldwide.

2.Basis of Presentation and Accounting Policies

Basis of Presentation

The condensed consolidated financial statements include the accounts of QIAGEN and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. All amounts are presented in U.S. dollars, unless otherwise indicated. Investments in either common stock or in-substance common stock of companies where we exercise significant influence over the operations but do not have control, and where we are not the primary beneficiary, are accounted for using the equity method. All other investments are accounted for at our initial cost, minus any impairment, plus or minus changes from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and generally in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the Securities and Exchange Commission (SEC) rules and regulations. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation have been included.

On January 3, 2023, we acquired Verogen, Inc., a leader in the use of next-generation sequencing (NGS) technologies to drive the future of human identification (HID) and forensic investigation. Verogen, a privately held company founded in 2017 and based in San Diego, California, supports the global human identification community with NGS tools and professional services to help resolve criminal and missing-persons cases. The acquisition is not significant to the overall condensed consolidated financial statements.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. While changing conditions in our global environment present additional uncertainty, we continue to use the best information available to form our estimates. Actual results could differ from those estimates.

We operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. We have a common basis of organization and our products and services are offered globally. Our chief operating decision maker (CODM) makes decisions based on the Company as a whole. Accordingly, we operate and make decisions as one reporting unit.

The results of operations for an interim period are not necessarily indicative of results that may be expected for any other interim period or for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 20-F for the year ended December 31, 2023.

Summary of Significant Accounting Policies

The interim condensed consolidated financial statements were prepared based on the same accounting policies as those applied and described in the consolidated financial statements as of December 31, 2023.

Adoption of New Accounting Standards in 2024

As of September 30, 2024, there has been no adoption of new accounting standards in 2024.

New Accounting Standards Not Yet Adopted

As of September 30, 2024, the following recently issued but not yet adopted accounting pronouncements are expected to impact our consolidated financial statements:

ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures was issued in response to stakeholder requests for more decision-useful information about reportable segments. The amendments in ASU 2023-07 improve reportable segment disclosure requirements through enhanced disclosures. This ASU does not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine reportable segments. This ASU is effective for fiscal years beginning after December 15, 2023, and early adoption is permitted. We will adopt the new disclosures retrospectively to all prior periods presented in the financial statements beginning with the annual reporting for the year ended December 31, 2024.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures enhances annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity's worldwide operations. The two primary enhancements disaggregate existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. We will adopt the new disclosures prospectively beginning with the annual reporting for the year ended December 31, 2025.

3.Restructuring and Impairments

Restructuring and other costs include impairments, employee-related costs (principally termination benefits) as well as contract and other costs, primarily contract termination costs. Termination benefits are accounted for in accordance with FASB ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, and are recorded when it is probable that employees will be entitled to benefits and the amounts are known or can be reasonably estimated. Estimates of termination benefits are based on the frequency of past termination benefits, the similarity of benefits under the current plan and prior plans, and the existence of statutory required minimum benefits. Contract and other costs are accounted for in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations and are recorded when the liability is incurred. Additionally, expenses incurred may also include costs that are an integral component of, and are directly attributable to, restructuring activities which do not qualify as exit and disposal costs, such as intangible asset impairments and other asset related write-offs. The specific restructuring measures and associated estimated costs are based on management's best business judgment under the existing circumstances at the time the estimates are made. If future events require changes to these estimates, such adjustments will be reflected in the period of the revised estimate.

2024 Restructuring

In 2024, we started initiatives that aim to improve the overall efficiency and profitability of the company. In June 2024, the Supervisory Board approved the restructuring including the discontinuation of our NeuMoDx clinical PCR system considering the market development following the COVID-19 pandemic and changing customer needs for integrated PCR-based clinical molecular testing systems. Following the discontinuation, we intend to refocus resources and efforts on developing and commercializing other innovative solutions within our portfolio. Overall, the restructuring initiatives include activities to improve global efficiency through targeted measures to reduce hierarchies and drive increased digitalization and automation for improved resource allocation and profitable growth. The costs for the 2024 restructuring program largely included non-cash charges for impairment of long-lived assets and, to a lesser extent, cash-settled charges for employee-related costs and facility exit and other costs, including contract termination costs.

As of September 30, 2024, the restructuring liability is included in accrued and other current liabilities in the accompanying condensed consolidated balance sheet as summarized in the following table:


(in thousands)	Employee-related costs	Exit and other costs	Total

Costs incurred	$14,764	$55,822	$70,586
Payments	(168)	(518)	(686)
Foreign currency translation adjustment	(49)	(105)	(154)
Liability at June 30, 2024	$14,547	$55,199	$69,746
Costs incurred (reversals)	4,810	757	5,567
Release of accruals	-	(3,311)	(3,311)
Payments	(3,234)	(27,938)	(31,172)
Foreign currency translation adjustment	465	562	1,027
Liability at September 30, 2024	$16,588	$25,269	$41,857

Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and retention bonuses incurred during transition periods. Exit and other costs primarily consist of supplier contract termination costs, project consulting fees, and other professional service fees to support the program.

Non-cash charges

Following the discontinuation of the NeuMoDx system, the intangible assets were reviewed and determined to have no alternative use and were fully impaired. Intangible asset impairments include the impairment of developed technology related to the NeuMoDx system, the termination of licenses which were used exclusively in connection with this system and in-process research and development acquired from NeuMoDx in 2020.

In accordance with an impairment test under ASC 360 Property, Plant and Equipment, long-lived assets were fully impaired following the decision to discontinue the NeuMoDx system and close the Ann Arbor, Michigan facility. The impairment test considered the lack of estimated future cash flows of the NeuMoDx asset group, no alternative use for the long-lived assets, and no estimable value recoverable in a market disposal. As a result, impairments were recorded for assets under construction, machinery and equipment and computer software.

We conducted an impairment review of inventory and other assets. NeuMoDx related inventory was written-off following the decision to discontinue, and the inventory charges were recorded in cost of sales. Other asset write-downs included the right-of-use assets related to the facility closure and allowances against accounts receivable to reflect the expected impact of non-payment of the outstanding receivables related to the NeuMoDx business.

The following is a summary of all charges related to the 2024 restructuring program recorded in the condensed consolidated statements of income (loss) during the three and nine months ended September 30, 2024:


Classification and Type of Charge (in thousands)	Three Months Ended September 30, 2024	Nine Months Ended September 30, 2024


Cost of sales:
Exit costs, including contract termination costs	($2,918)	$42,866
Employee-related costs	1,756	7,499
Intangible asset impairments	-	133,738
Inventories	8,890	91,398
Property, plant and equipment impairments	852	16,244
Total restructuring and other costs in cost of sales	$8,580	$291,745

Restructuring, acquisition, integration and other, net:
Exit costs	$364	$10,402
Employee-related costs	3,054	12,075
Property, plant and equipment impairments	2,294	45,164
Other asset write-downs	1,109	5,498
Intangible asset impairments	27	27
Total restructuring and other costs in restructuring, acquisition, integration and other, net	$6,848	$73,166
Total restructuring and other costs	$15,428	$364,911

We anticipate total program costs of approximately $400 million upon the completion of the program in 2025, with approximately $30 million of costs to be incurred primarily for employee-related and other exit costs.

4.Revenue

Contract Estimates

The majority of our revenue is derived from (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount in which we have the right to invoice as product is delivered. We have elected, as a practical expedient, not to disclose the value of remaining performance obligations associated with these types of contracts.

However, we have certain companion diagnostic co-development contracts to provide research and development activities in which our performance obligations extend over multiple years. As of September 30, 2024, we had $71.9 million of remaining performance obligations for which the transaction price is not constrained related to these contracts which we expect to recognize over the next 12 to 18 months.

Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material.

Contract Balances

The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) in the condensed consolidated balance sheet.

Contract assets as of September 30, 2024 and December 31, 2023 totaled $16.7 million and $15.0 million, respectively, and are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets and relate to the companion diagnostic co-development contracts discussed above.

Contract liabilities primarily relate to non-cancellable advances or deposits received from customers before revenue is recognized and is primarily related to instrument service and software-as-a-service (SaaS) arrangements. As of September 30, 2024 and December 31, 2023, contract liabilities totaled $92.2 million and $82.1 million, respectively, of which $73.4 million and $66.4 million, respectively, are included in accrued and other current liabilities and $18.8 million and $15.7 million, respectively, are included in other long-term liabilities. During the three and nine months ended September 30, 2024, we satisfied the associated performance obligations and recognized revenue of $15.2 million and $64.5 million, respectively, related to advance customer payments previously received. During the three and nine months ended September 30, 2023, we satisfied the associated performance obligations and recognized revenue of $14.6 million and $59.7 million, respectively, related to advance customer payments previously received.

Disaggregation of Revenue

We disaggregate our revenue based on product type and customer class, product category and geography as shown in the tables below for the three- and nine-month periods ended September 30, 2024 and 2023:


Three Months Ended September 30,	Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023

Consumables and related revenues	$265,100	$233,512	$738,277	$702,708
Instruments	17,208	20,903	53,960	61,767
Molecular Diagnostics	282,308	254,415	792,237	764,475

Consumables and related revenues	182,570	183,108	561,088	579,033
Instruments	36,991	38,371	103,687	112,641
Life Sciences	219,561	221,479	664,775	691,674
Total net sales	$501,869	$475,894	$1,457,012	$1,456,149


Three Months Ended September 30,	Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023

Sample technologies	$161,852	$160,422	$480,212	$498,506
Diagnostic solutions	197,395	178,786	552,462	518,111
PCR / Nucleic acid amplification	74,307	67,959	217,976	219,286
Genomics / NGS	54,693	54,674	167,822	173,888
Other	13,622	14,053	38,540	46,358
Total net sales	$501,869	$475,894	$1,457,012	$1,456,149


Three Months Ended September 30,	Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023

Americas	$268,627	$254,233	$764,152	$763,878
Europe, Middle East and Africa	158,181	145,200	469,860	451,259
Asia Pacific, Japan and Rest of World	75,061	76,461	223,000	241,012
Total net sales	$501,869	$475,894	$1,457,012	$1,456,149

5.Inventories

The components of inventories consist of the following as of September 30, 2024 and December 31, 2023:


(in thousands)	September 30, 2024	December 31, 2023

Raw materials	$65,082	$91,204
Work in process	77,781	94,736
Finished goods	178,836	212,445
Total inventories, net	$321,699	$398,385

The decrease in inventories as of September 30, 2024 as compared to December 31, 2023 is primarily the result of the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments."

6.Intangible Assets

The following table sets forth the intangible assets by major asset class as of September 30, 2024 and December 31, 2023:


September 30, 2024	December 31, 2023
(in thousands)	Gross carrying amount	Accumulated amortization	Gross carrying amount	Accumulated amortization

Amortized intangible assets:
Patent and license rights	$184,726	($134,851)	$202,785	($127,163)
Developed technology	698,042	(448,213)	798,571	(447,989)
Customer base, non-compete agreements and trademarks	210,255	(179,130)	212,285	(173,438)
Total amortized intangible assets	$1,093,023	($762,194)	$1,213,641	($748,590)
Unamortized intangible assets:
In-process research and development	$-	$61,770
Goodwill	2,486,242	2,475,732
Total unamortized intangible assets	$2,486,242	$2,537,502

The in-process research and development asset from the 2020 acquisition of NeuMoDx was written off in connection with the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments." The remaining in-process research and development asset from the 2018 STAT-Dx acquisition was completed during the second quarter of 2024 and was transferred to developed technology to be amortized over its estimated useful life.

The changes in intangible assets in 2024 are summarized as follows:


(in thousands)	Goodwill	Intangibles

Balance at December 31, 2023	$2,475,732	$526,821
Additions	-	2,651
Amortization	-	(65,972)
Impairments	-	(133,764)
Foreign currency translation adjustments	10,510	1,093
Balance at September 30, 2024	$2,486,242	$330,829

During the nine months ended September 30, 2024, we recorded an impairment charge of $133.8 million related to the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments."

Cash paid for purchases of intangible assets in the accompanying condensed consolidated statement of cash flows during the nine months ended September 30, 2024 totaled $3.1 million, of which $2.5 million is related to current period cash payments for intangible assets, $0.4 million is related to current year payments for assets that were accrued as of December 31, 2023 and $0.2 million is for prepayments recorded in other long-term assets in the accompanying condensed consolidated balance sheet.

For the three- and nine-month periods ended September 30, 2024, amortization expense on intangible assets decreased to $20.3 million and $66.0 million, respectively, as compared to amortization expense of $23.5 million and $70.4 million, respectively, in the same period of 2023. Amortization of intangibles for each of the next five years is expected to be approximately:


Year ending December 31, (in millions)	Annual amortization

2025	$68.7
2026	$61.1
2027	$55.4
2028	$48.1
2029	$18.2

7.Investments

The following discusses our non-marketable investments and the realized and unrealized gains and losses on these investments.

Non-Marketable Investments

We have made strategic investments in certain privately-held companies without readily determinable market values.

Non-Marketable Investments Accounted for Under the Equity Method

As of September 30, 2024 and December 31, 2023, we had total non-marketable investments that were accounted for as equity method investments of $14.7 million and $16.2 million, respectively, included in other long-term assets in the accompanying condensed consolidated balance sheets.

Some of our equity method investments are variable interest entities. We are not considered the primary beneficiary of these investments as we do not hold the power to direct the activities that most significantly impact the economic performance of these entities, and therefore, these investments are not consolidated. As of September 30, 2024, these investments had a total net carrying value of $9.0 million, of which $9.2 million, representing our maximum exposure to loss, is included in other long-term assets and $0.2 million, where we are committed to fund losses, is included in other long-term liabilities in the accompanying condensed consolidated balance sheet. As of December 31, 2023, these investments totaled a net $9.9 million, of which $10.2 million is included in other long-term assets and $0.3 million is included in other long-term liabilities in the accompanying condensed consolidated balance sheet.

One of our investments, TVM Life Science Ventures III (TVM), is a limited partnership, and we account for our 3.1% investment under the equity method as we have the ability to exercise significant influence over the limited partnership. This investment is valued at net asset value (NAV) reported by the counterparty. During 2024 and 2023, we made additional cash payments of $1.4 million and $2.4 million, respectively, to TVM. As of September 30, 2024, we have $5.5 million of unfunded commitments through 2029 related to this investment. We do not have the right to redeem these funds under the normal course of operations of this partnership.

During the three- and nine-month periods ended September 30, 2024, we recorded an impairment of $2.0 million in other expense, net in the accompanying condensed consolidated statements of income (loss) following adverse changes in an investee's solvency that indicated that the carrying value was no longer recoverable.

Non-Marketable Investments Not Accounted for Under the Equity Method

At September 30, 2024 and December 31, 2023, we had investments in non-publicly traded companies that do not have readily determinable fair values with carrying amounts that totaled $4.6 million and $4.4 million, respectively, which are included in other long-term assets in the accompanying condensed consolidated balance sheets. These investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Changes resulting from impairment and observable price changes are recognized in the condensed consolidated statements of income (loss) during the period the change is identified.

The changes in non-marketable investments not accounted for under the equity method during the nine months ended September 30, 2024 and 2023 are as follows:


(in thousands)	2024	2023

Balance at beginning of year	$4,435	$5,329
Cash investments in equity securities, net	364	278
Shares received in exchange for services performed	-	2,604
Impairments	(250)	(4,158)
Foreign currency translation adjustments	58	17
Balance at end of period	$4,607	$4,070

During the nine-month period ended September 30, 2024, following a decline in the observable price of the investment, we recorded an impairment of $0.3 million in other expense, net in the accompanying condensed consolidated statement of income (loss).

8.Debt

At September 30, 2024 and December 31, 2023, total long-term debt, net of debt issuance costs, consists of the following:


(in thousands)	September 30, 2024	December 31, 2023

1.000% Senior Unsecured Cash Convertible Notes due 2024	$497,625	$483,019
0.000% Senior Unsecured Convertible Notes due 2027	498,269	497,869
2.500% Senior Unsecured Convertible Notes due 2031	494,213	-
German Private Placement (2017 Schuldschein)	16,220	120,956
German Private Placement (2022 Schuldschein)	413,514	407,950
Total long-term debt	1,919,841	1,509,794
Less: Current portion	555,257	587,970
Long-term portion	$1,364,584	$921,824

The notes are all unsecured obligations that rank pari passu. No Contingent Conversion Conditions were triggered as of September 30, 2024.

The principal amount, carrying amount and fair values of long-term debt instruments are summarized below:


As of September 30, 2024
Principal amount	Unamortized debt discount and issuance costs	Carrying amount	Fair Value
(in thousands)	Amount	Leveling

Cash Convertible Notes due 2024	$500,000	($2,375)	$497,625	$498,675	Level 1
Convertible Notes due 2027	500,000	(1,731)	498,269	471,415	Level 1
Convertible Notes due 2031	500,000	(5,787)	494,213	514,110	Level 1
German Private Placement (2017 Schuldschein)	16,236	(16)	16,220	15,618	Level 2
German Private Placement (2022 Schuldschein)	414,259	(745)	413,514	409,577	Level 2
$1,930,495	($10,654)	$1,919,841	$1,909,395


As of December 31, 2023
Principal amount	Unamortized debt discount and issuance costs	Carrying amount	Fair value
(in thousands)	Amount	Leveling

Cash Convertible Notes due 2024	$500,000	($16,981)	$483,019	$513,500	Level 1
Convertible Notes due 2027	500,000	(2,131)	497,869	453,185	Level 1
German Private Placement (2017 Schuldschein)	121,009	(53)	120,956	118,978	Level 2
German Private Placement (2022 Schuldschein)	408,846	(896)	407,950	401,684	Level 2
$1,529,855	($20,061)	$1,509,794	$1,487,347

Interest expense related to the convertible notes for the three and nine months ended September 30, 2024 and 2023 was comprised of the following:


Three Months Ended September 30,	Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023

Coupon interest	$1,979	$669	$4,479	$4,169
Amortization of original issuance discount	4,664	7,248	13,826	22,841
Amortization of debt issuance costs	439	614	1,223	1,944
Total interest expense related to the convertible notes	$7,082	$8,531	$19,528	$28,954

Convertible Notes due 2031

On September 10, 2024, we issued 2.50% convertible notes in an aggregate principal amount of $500.0 million with a maturity date of September 10, 2031 (2031 Notes). The 2031 Notes carry interest of 2.50% per annum payable semi-annually in arrears. The net proceeds of the 2031 Notes totaled $496.4 million, after debt issuance costs of $5.8 million, of which $2.2 million was accrued as of September 30, 2024. Debt issuance costs are amortized to interest expense over the term of the 2031 Notes. The effective interest rate of the 2031 Notes is 2.68%.

The 2031 Notes are convertible into common shares based on an initial conversion rate, subject to adjustment, of 3,124.3702 shares per $200,000 principal amount of notes (which represents an initial conversion price of $64.0129 per share, or 7.8 million underlying shares). At conversion, we will settle the 2031 Notes by repaying the principal portion in cash and any excess of the conversion value over the principal amount in common shares.

The 2031 Notes may be redeemed at the option of each noteholder at their principal amount on September 10, 2029 or in connection with a change of control or delisting event.

The 2031 Notes are convertible in whole, but not in part, at the option of the noteholders on a net share settlement basis, at the prevailing conversion price in the following circumstances beginning after October 21, 2024 through March 9, 2031:

•if the daily volume-weighted average trading price of our common shares for at least 20-consecutive trading days during a period of 30-consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 150% of the applicable conversion price on each such trading day; or

•if we undergo certain fundamental changes, including a change of control or delisting event, as defined in the agreement; or

•if a parity event or trading price unavailability event, as the case may be, occurs during the period of 10 days, commencing on and including the first business day following the relevant trading price notification date; or

•if we distribute assets or property to all or substantially all of the holders of our common shares and those assets or other property have a value of more than 25% of the average daily volume-weighted average trading price of our common shares for the prior 20 consecutive trading days; or

•in case of early redemption in respect of the outstanding notes at our option, where the conversion date falls in the period from (and including) the date on which the call notice is published to (and including) the 45th business day prior to the redemption date; or

•if we experience certain customary events of default, including defaults under certain other indebtedness, until such event of default has been cured or waived; or

•if an acquisition of control occurs, where the conversion date falls in the period from (and including) the date on which the acquisition notice is published to the record date established in connection with the acquisition of control, established to be no less than 40 days and no more than 60 days from acquisition notice; or

•if a take-over bid is published, where the conversion date falls in the period from (and including) the date of notice of the take-over bid to the last day of the applicable legal acceptance period.

The noteholders may convert their notes at any time, without condition, during the period beginning on March 10, 2031 and ending on the 45th business day prior to September 10, 2031.

As of September 30, 2024, the contingent conversion conditions were not yet in effect and no contingent conversion conditions could be triggered.

Convertible Notes due 2027

On December 17, 2020, we issued zero coupon convertible notes in an aggregate principal amount of $500.0 million with a maturity date of December 17, 2027 (2027 Notes). The 2027 Notes carry no coupon interest. The net proceeds of the 2027 Notes totaled $497.6 million, after payment of debt issuance costs of $3.7 million.

The effective interest rate of the 2027 Notes is 1.65%, which is imputed based on the amortization of the fair value of the embedded conversion option over the remaining term of the 2027 Notes.

The 2027 Notes are convertible into common shares based on a conversion rate, subject to adjustment, of 2,475.26 shares per $200,000 principal amount of notes (which represents a conversion price of $80.7996 per share, or 6.2 million underlying shares). At conversion, we will settle the 2027 Notes by repaying the principal portion in cash and any excess of the conversion value over the principal amount in common shares.

The 2027 Notes may be redeemed at the option of each noteholder at their principal amount on December 17, 2025 or in connection with a change of control or delisting event (as further described in the 2027 Notes).

The 2027 Notes are convertible in whole, but not in part, at the option of the noteholders on a net share settlement basis, at the prevailing conversion price, in the following circumstances beginning after January 27, 2021 through June 16, 2027:

•if the last reported sale price of our common shares for at least 20-consecutive trading days during a period of 30-consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price on such trading day; or

•if we undergo certain fundamental changes, including a change of control, as defined in the agreement; or

•if we experience certain customary events of default, including defaults under certain other indebtedness, until such event of default has been cured or waived.

The noteholders may convert their notes at any time, without condition, during the period beginning June 17, 2027 and ending on the 45th business day prior to December 17, 2027.

No Contingent Conversion Conditions were triggered for the 2027 Notes as of September 30, 2024 or December 31, 2023.

Cash Convertible Notes due 2024

On November 13, 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes due in 2024 (2024 Notes). The net proceeds of the 2024 Notes were $468.9 million, after payment of transaction costs and the net cost of the Call Spread Overlay described below.

Interest on the 2024 Notes is payable semi-annually in arrears and will mature on the maturity date unless repurchased or converted with its terms prior to such date. The 2024 Notes were solely convertible into cash in whole, but not in part, at the option of noteholders during the contingent conversion period as shown in the table below.


Cash convertible notes	Annual interest rate	Date of interest payments	Maturity date	Contingent conversion period	Conversion rate per $200,000 principal amount

2024 Notes	1.000	%	May 13 and November 13	November 13, 2024	December 24, 2018 to August 2, 2024	4,356.8531

For the 2024 Notes, the contingent conversion period expired on August 2, 2024 without conversion triggered. No Contingent Conversion Conditions were triggered for the 2024 Notes as of December 31, 2023.

The Contingent Conversion Conditions in the 2024 Notes outlined in the agreement were analyzed under ASC 815, Derivatives and Hedging, and, based on our analysis, we determined that any embedded features were clearly and closely related to the 2024 Notes (i.e., the host contracts). As a result, pursuant to the accounting provisions of ASC 815, Derivatives and Hedging, the conversion features were not required to be bifurcated as separate instruments.

Because the 2024 Notes contain an embedded cash conversion option, we have determined that the embedded cash conversion option is a derivative financial instrument which is required to be separated from the 2024 Notes and accounted for separately as a derivative liability, with changes in fair value reported in our condensed consolidated statements of income (loss) until the cash conversion option transaction settles or expires. The initial fair value liability of the embedded cash conversion options was $98.5 million for the 2024 Notes, which simultaneously reduced the carrying value of the 2024 Notes (effectively serving as an original issuance discount). For further discussion of the derivative financial instruments relating to the 2024 Notes, refer to Note 9 "Derivatives and Hedging."

As noted above, the reduced carrying value on the 2024 Notes resulted in a debt discount that is amortized to the principal amount through the recognition of non-cash interest expense using the effective interest method over the expected life of the debt of six years. This resulted in our recognition of interest expense on the 2024 Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise similar terms been issued. The effective interest rate is 4.78% for the 2024 Notes, which is imputed based on the amortization of the fair value of the embedded cash conversion option over the remaining term of the 2024 Notes.

We incurred approximately $5.7 million of transaction costs in connection with the issuance of the 2024 Notes. Such costs have been allocated to the 2024 Notes and deferred and are being amortized to interest expense over the terms of the 2024 Notes using the effective interest method.

Cash Convertible Notes Call Spread Overlay

Concurrent with the issuance of the 2024 Notes, we entered into privately negotiated hedge transactions (Call Options) with, and issued warrants to purchase shares of our common stock (Warrants) to, certain financial institutions. We refer to the Call Options and Warrants collectively as the "Call Spread Overlay." The Call Options are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion of the 2024 Notes. The Call Options are derivative financial instruments and are discussed further in Note 9 "Derivatives and Hedging." The Warrants are equity instruments and are further discussed in Note 13 "Equity."

Aside from the initial payment of a premium, we will not be required to make any cash payments under the Call Options and will be entitled to receive an amount of cash, generally equal to the amount by which the market price per common share exceeds the exercise price of the Call Options during the relevant valuation period. The exercise price under the Call Options is initially equal to the conversion price of the 2024 Notes.

The Warrants that were issued with our 2024 Notes could have a dilutive effect to the extent that the price of our common shares exceeds the applicable strike price of the Warrants. For each Warrant that is exercised, we will deliver to the holder a number of common shares equal to the amount by which the settlement price exceeds the exercise price, plus cash in lieu of any fractional shares. We will not receive any proceeds if the Warrants are exercised.

German Private Placement (2017 Schuldschein)

In 2017, we completed a German private placement bond (2017 Schuldschein) which was issued in several tranches totaling $331.1 million due in various periods through 2027. The 2017 Schuldschein consisted of one U.S. dollar and several euro-denominated tranches. In June 2024, we repaid a total of $101.5 million at maturity of two tranches as shown in the table below. The euro tranches are designated as a foreign currency non-derivative hedging instrument that qualifies as a net investment hedge as described in Note 9 "Derivatives and Hedging." Based on the spot rate method, the change in the carrying value of the euro-denominated tranches attributed to the net investment hedge as of September 30, 2024 totaled $0.1 million of unrealized loss and is recorded in equity. We paid $1.2 million in debt issuance costs which are being amortized through interest expense using the effective interest method over the lifetime of the notes.

A summary of the tranches as of September 30, 2024 and December 31, 2023 is as follows:


Carrying value (in thousands) as of
Currency	Notional amount	Interest rate	Maturity	September 30, 2024	December 31, 2023

EUR	€64.0 million	Fixed 1.09%	June 2024	$-	$70,704
EUR	€31.0 million	Floating EURIBOR + 0.7%	June 2024	-	34,247
EUR	€14.5 million	Fixed 1.61%	June 2027	16,220	16,005
$16,220	$120,956

German Private Placement (2022 Schuldschein)

In July and August 2022, we completed another German private placement bond (2022 Schuldschein) which was issued in several tranches totaling €370.0 million due in various periods through 2035. The 2022 Schuldschein consists of only euro-denominated tranches which have either a fixed or floating rate. All tranches except for the €70.0 million fixed 3.04% tranche due August 2035 are ESG-linked wherein the interest rate is subject to adjustment of +/- 0.025% if our ESG rating changes. The euro tranches are designated as a foreign currency non-derivative hedging instrument that qualifies as a net investment hedge as described in Note 9 "Derivatives and Hedging." Based on the spot rate method, the change in the carrying value of the euro-denominated tranches attributed to the net investment hedge as of September 30, 2024 totaled $41.6 million of unrealized loss and is recorded in equity. We paid $1.2 million in debt issuance costs which are being amortized through interest expense using the effective interest method over the lifetime of the notes.

A summary of the tranches as of September 30, 2024 and December 31, 2023 is as follows:


Carrying value (in thousands) as of
Currency	Notional Amount	Interest Rate	Maturity	September 30, 2024	December 31, 2023

EUR	€51.5 million	Floating 6M EURIBOR + 0.55%	July 2025	$57,632	$56,836
EUR	€62.0 million	Fixed 2.741%	July 2027	69,323	68,388
EUR	€29.5 million	Floating 6M EURIBOR + 0.70%	July 2027	32,984	32,539
EUR	€37.0 million	Fixed 3.044%	July 2029	41,356	40,803
EUR	€103.0 million	Floating 6M EURIBOR + 0.85%	July 2029	115,126	113,586
EUR	€9.5 million	Fixed 3.386%	July 2032	10,616	10,475
EUR	€7.5 million	Floating 6M EURIBOR + 1.0%	July 2032	8,381	8,269
EUR	€70.0 million	Fixed 3.04%	August 2035	78,096	77,054
$413,514	$407,950

Revolving Credit Facility

Our credit facilities available and undrawn at September 30, 2024 total €413.0 million (approximately $462.4 million). This includes a €400.0 million syndicated ESG-linked revolving credit facility expiring December 2025 and two other lines of credit amounting to €13.0 million with no expiration date. The €400.0 million facility can be utilized in euro and bears interest of 0.550% to 1.500% above EURIBOR and is offered with interest periods of one, three or six months. The commitment fee is calculated based on 35% of the applicable margin. The revolving facility agreement contains certain financial and non-financial covenants including, but not limited to, restrictions on the encumbrance of

assets and the maintenance of certain financial ratios. We were in compliance with these covenants at September 30, 2024. The credit facilities are for general corporate purposes and no amounts were utilized at September 30, 2024.

9.Derivatives and Hedging

Objective and Strategy

In the ordinary course of business, we use derivative instruments, including swaps, forwards and/or options, to manage potential losses from foreign currency exposures and interest-bearing assets or liabilities. The principal objective of such derivative instruments is to minimize the risks and/or costs associated with our global financial and operating activities. We do not utilize derivative or other financial instruments for trading or other speculative purposes. We recognize all derivatives as either assets or liabilities on the balance sheet on a gross basis, measure those instruments at fair value and recognize the change in fair value in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures. We have agreed with almost all of our counterparties with whom we had entered into cross-currency swaps, interest rate swaps or foreign exchange contracts, to enter into bilateral collateralization contracts under which we will receive or provide cash collateral, as the case may be, for the net position with each of these counterparties. As of September 30, 2024, cash collateral positions consisted of $2.9 million recorded in accrued and other current liabilities and $88.6 million recorded in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet. As of December 31, 2023, we had cash collateral positions consisting of $5.4 million recorded in accrued and other current liabilities and $87.7 million recorded in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet.

Non-Derivative Hedging Instrument

Net Investment Hedge

We are party to a foreign currency non-derivative hedging instrument that is designated and qualifies as a net investment hedge. The objective of the hedge is to protect part of the net investment in foreign operations against adverse changes in the exchange rate between the euro and the U.S. dollar. The non-derivative hedging instrument is the German private corporate bond (2017 Schuldschein) which was issued in 2017 in the total amount of $331.1 million as described in Note 8 "Debt." Since then, all but one of the tranches was paid as described in Note 8 "Debt," and as of September 30, 2024, €14.5 million remains designated as a hedging instrument against a portion of our euro net investments in our foreign operations. In July 2022, we issued an additional €370.0 million German private corporate bond (2022 Schuldschein) as described in Note 8 "Debt" and it is designated in its entirety as the hedging instrument against a portion of our euro net investments in our foreign operations. The relative changes in both the hedged item and hedging instrument are calculated by applying the change in spot rate between two assessment dates against the respective notional amount. The effective portion of the hedge is recorded in the cumulative translation adjustment account within accumulated other comprehensive loss. Based on the spot rate method, the unrealized loss recorded in equity as of September 30, 2024 and December 31, 2023 is $41.7 million and $35.2 million, respectively. Since we are using the debt as the hedging instrument, which is also remeasured based on the spot rate method, there is no hedge ineffectiveness related to the net investment hedge as of September 30, 2024 and December 31, 2023.

Derivatives Designated as Hedging Instruments

Cash Flow Hedges

As of September 30, 2024 and December 31, 2023, we held derivative instruments that are designated and qualify as cash flow hedges, where the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. To date, we have not recorded any hedge ineffectiveness related to any cash flow hedges in earnings. Based on their valuation as of September 30, 2024, we expect approximately $0.6 million of derivative losses included in accumulated other comprehensive loss will be reclassified into income during the next 12 months. The cash flows derived from derivatives are classified in the condensed consolidated statements of cash flows in the same category as the hedged item.

We use interest rate derivative contracts to align our portfolio of interest-bearing assets and liabilities with our risk management objectives. Since 2015, we have been a party to five cross-currency interest rate swaps through 2025 for a total notional amount of €180.0 million which qualify for hedge accounting as cash flow hedges. In September 2022, we entered into five new cross-currency interest rate swaps through 2025 for a total notional amount of CHF 542.0 million which qualify for hedge accounting as cash flow hedges. We determined that no ineffectiveness exists related to these swaps. As of September 30, 2024 and December 31, 2023, interest receivables of $4.0 million and $8.4 million, respectively, are recorded in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

Derivatives Not Designated as Hedging Instruments

Call Options

We entered into Call Options which, along with the sale of the Warrants, represent the Call Spread Overlay entered into in connection with the 2024 Notes and which are more fully described in Note 8 "Debt." In these transactions, the Call Options are intended to address the equity price risk inherent in the cash conversion feature of each instrument by offsetting cash payments in excess of the principal amount due upon any conversion of the Notes. Accordingly, the derivative is presented as either current or long-term based upon the classification of the related debt.

Aside from the initial payment of premiums for the Call Options, we will not be required to make any cash payments under the Call Options. We will, however, be entitled to receive under the terms of the Call Options, an amount of cash generally equal to the amount by which the market price per common share exceeds the exercise price of the Call Options during the relevant valuation period. The exercise price under the Call Options is equal to the conversion price of the 2024 Notes.

The Call Options, for which our common shares are the underlying security, are derivative assets that require mark-to-market accounting treatment. The Call Options are measured and reported at fair value on a recurring basis within Level 2 of the fair value hierarchy. The change in fair value is recognized immediately in our condensed consolidated statements of income (loss) in other expense, net.

Cash Convertible Notes Embedded Cash Conversion Option

The embedded cash conversion option within the 2024 Notes discussed in Note 8 "Debt" is required to be separated from the 2024 Notes and accounted for separately as a derivative liability, with changes in fair value reported in our condensed consolidated statements of income (loss) in other expense, net until the cash conversion option settles or expires. The embedded cash conversion option is measured and reported at fair value on a recurring basis within Level 2 of the fair value hierarchy.

Because the terms of the 2024 Notes' embedded cash conversion option are substantially similar to those of the Call Options, discussed above, we expect the effect on earnings from these two derivative instruments to mostly offset each other.

Foreign Exchange Contracts

We are party to various foreign exchange forward, option and swap arrangements which had an aggregate notional value of $480.7 million at September 30, 2024, which expire at various dates through July 2025. At December 31, 2023, these arrangements had an aggregate notional value of $590.9 million, which expired at various dates through September 2024. The transactions have been entered into to offset the effects from short-term balance sheet exposure to foreign currency exchange risk. Changes in the fair value of these arrangements have been recognized in other expense, net.

Fair Values of Derivative Instruments

The following table summarizes the fair value amounts of derivative instruments as of September 30, 2024 and December 31, 2023. The current assets are included in prepaid expenses and other current assets and the current liabilities are included in accrued and other current liabilities in the accompanying condensed consolidated balance sheets. The long-term assets are included in other long-term assets and the long-term liabilities are included in other long-term liabilities in the accompanying condensed consolidated balance sheets.


As of September 30, 2024	As of December 31, 2023
(in thousands)	Current asset	Long-term asset	Current asset	Long-term asset

Assets:
Derivative instruments designated as hedges
Interest rate contracts - cash flow hedge(1)	$-	$-	$-	$3,083
Interest rate contracts - net investment hedge (1)	588	-	-	-
Total derivative instruments designated as hedges	$588	$-	$-	$3,083

Undesignated derivative instruments
Equity options	$17,669	$-	$39,759	$-
Foreign exchange forwards and options	5,578	-	3,471	-
Total undesignated derivative instruments	$23,247	$-	$43,230	$-
Total derivative assets	$23,835	$-	$43,230	$3,083


As of September 30, 2024	As of December 31, 2023
(in thousands)	Current liability	Long-term liability	Current liability	Long-term liability

Liabilities:
Derivative instruments designated as hedges
Interest rate contracts - cash flow hedge(1)	($93,091)	$-	$-	($98,908)
Total derivative instruments designated as hedges	($93,091)	$-	$-	($98,908)

Undesignated derivative instruments
Cash convertible notes embedded conversion option	($17,673)	$-	($39,830)	$-
Foreign exchange forwards and options	(6,599)	-	(9,944)	-
Total undesignated derivative instruments	($24,272)	$-	($49,774)	$-
Total derivative liabilities	($117,363)	$-	($49,774)	($98,908)

(1)The fair value amounts for the interest rate contracts do not include accrued interest.

Gains and Losses on Derivative Instruments

The following tables summarize the gains and losses on derivative instruments for the three- and nine-month periods ended September 30, 2024 and 2023:


Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	2024	2023
(in thousands)	Other expense, net	Other expense, net	Other expense, net	Other expense, net

Total amounts presented in the Condensed Consolidated Statements of Income (Loss) in which the effects of cash flow and fair value hedges are recorded	($2,417)	($4,713)	($3,544)	($7,152)

Gains (Losses) on Derivatives in Cash Flow Hedges
Interest rate contracts
Amount of gain (loss) reclassified from accumulated other comprehensive loss	$49,469	($12,741)	($1,254)	$5,471
Amounts excluded from effectiveness testing	-	-	-	-

Gains (Losses) Derivatives Not Designated as Hedging Instruments
Equity options	2,732	(86,728)	(22,090)	(170,146)
Cash convertible notes embedded cash conversion option	(2,725)	86,937	22,157	170,851
Foreign exchange forwards and options	(2,555)	3,821	577	(1,787)

Total gains (losses)	$46,921	($8,711)	($610)	$4,389

10.Financial Instruments and Fair Value Measurements

Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

•Level 1. Observable inputs, such as quoted prices in active markets;

•Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and

•Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table presents our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023:


	As of September 30, 2024	As of December 31, 2023
(in thousands)	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total

Assets:
Cash equivalents	$539,292	$99,289	$-	$638,581	$481,360	$9,982	$-	$491,342
Short-term investments	-	83,193	-	83,193	-	81,023	-	81,023
Non-marketable equity securities	-	-	4,607	4,607	-	-	4,435	4,435
Equity options	-	17,669	-	17,669	-	39,759	-	39,759
Foreign exchange forwards and options	-	5,578	-	5,578	-	3,471	-	3,471
Interest rate contracts - cash flow hedge	-	-	-	-	-	3,083	-	3,083
Interest rate contracts - net investment hedge	-	588	-	588	-	-	-	-
Total financial assets	$539,292	$206,317	$4,607	$750,216	$481,360	$137,318	$4,435	$623,113
Liabilities:
Cash convertible notes embedded cash conversion option	$-	($17,673)	$-	($17,673)	$-	($39,830)	$-	($39,830)
Foreign exchange forwards and options	-	(6,599)	-	(6,599)	-	(9,944)	-	(9,944)
Interest rate contracts - cash flow hedge	-	(93,091)	-	(93,091)	-	(98,908)	-	(98,908)
Contingent consideration	-	-	(18,351)	(18,351)	-	-	(18,359)	(18,359)
Total financial liabilities	$-	($117,363)	($18,351)	($135,714)	$-	($148,682)	($18,359)	($167,041)

The carrying values of financial instruments, including accounts receivable, accounts payable and other accrued liabilities, approximate their fair values due to their short-term maturities.

Our assets and liabilities measured at fair value on a recurring basis consist of cash equivalents and short-term investments, which are classified in Level 1 and Level 2 of the fair value hierarchy; derivative contracts used to hedge currency and interest rate risk, derivative contracts to protect part of the net investments in foreign operations against adverse changes in the exchange rate between the euro and the functional currency of the U.S. dollar, and derivative financial instruments entered into in connection with the 2024 Notes discussed in Note 8 "Debt," which are classified in Level 2 of the fair value hierarchy; contingent consideration accruals, which are classified in Level 3 of the fair value hierarchy; and non-marketable equity securities remeasured as of September 30, 2024 and December 31, 2023 within Level 3 in the fair value hierarchy. There were no transfers between levels during the nine months ended September 30, 2024.

In determining fair value for Level 2 instruments, we apply a market approach, using quoted active market prices relevant to the particular instrument under valuation, giving consideration to the credit risk of both the respective counterparty to the contract and the Company. To determine our credit risk, we estimated our credit rating by benchmarking the price of outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, our credit risk was quantified by reference to publicly-traded debt with a corresponding rating. The Level 2 derivative financial instruments include the Call Options asset and the embedded cash conversion option liability. See Note 8 "Debt" and Note 9 "Derivatives and Hedging" for further information. The derivatives are not actively traded and are valued based on an option pricing model that uses observable market data for inputs. Significant market data inputs used to determine fair values included our common share price, the risk-free interest rate, and the implied

volatility of our common shares. The Call Options asset and the embedded cash conversion option liability were designed with the intent that changes in their fair values would substantially offset, with limited net impact to our earnings. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is substantially mitigated.

Our Level 3 instruments include non-marketable equity security investments. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date.

Our Level 3 instruments also include contingent consideration liabilities. We value contingent consideration liabilities using unobservable inputs, applying the income approach, such as the discounted cash flow technique or the probability-weighted scenario method. Contingent consideration arrangements obligate us to pay the sellers of an acquired entity if specified future events occur or conditions are met, such as the achievement of technological or revenue milestones. We use various key assumptions, such as the probability of achievement of the milestones (0% to 100%) and the discount rate (between 6.5% and 6.6%), to represent the non-performing risk factors and time value when applying the income approach. We regularly review the fair value of the contingent consideration and reflect any change in the accrual in the condensed consolidated statements of income (loss) in the line items commensurate with the underlying nature of the milestone arrangements.

Refer to Note 7 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the nine-month periods ended September 30, 2024 and 2023. For contingent consideration liabilities with Level 3 inputs, the following table summarizes the activity for the nine-month periods ended September 30, 2024 and 2023, all of which is related to the 2018 acquisition of STAT-Dx:


(in thousands)	2024	2023

Balance at beginning of year	($18,359)	($18,088)
Changes in fair value	8	(131)
Balance at end of period	($18,351)	($18,219)

As of September 30, 2024, $18.4 million was accrued for contingent consideration, of which $8.4 million is included in accrued and other current liabilities and $10.0 million is included in other long-term liabilities in the accompanying condensed consolidated balance sheet.

The estimated fair value of long-term debt, as disclosed in Note 8 "Debt," was based on current interest rates for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.

The fair values of the financial instruments are presented in Note 8 "Debt" and were determined as follows:

2024 Notes and Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on the 2024 Notes as well as the Convertible Notes due in 2027 and 2031.

German Private Placements: Fair value is based on an estimation using changes in the euro swap rates.

There were no adjustments in the three- and nine-month periods ended September 30, 2024 and 2023 for nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis.

11.Income Taxes

The quarterly provision for income taxes is based upon the estimated annual effective tax rate for the year, applied to the current period ordinary income before tax plus the tax effect of any discrete items. Our operating subsidiaries are exposed to statutory tax rates ranging from zero to 35%. Fluctuations in the distribution of pre-tax loss or income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the condensed consolidated financial statements.

In the third quarters of 2024 and 2023, our effective tax rates were 15.8% and 22.0%, respectively. In the nine months ended September 30, 2024 and 2023, our effective tax rates were (0.6)% and 21.6%, respectively. Our effective tax rates in 2024 are lower compared to 2023 primarily as a result of restructuring charges recorded in 2024 as part of the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments." We record partial tax exemptions on foreign income primarily derived from operations in Germany. These foreign tax benefits are due to a combination of favorable tax laws and exemptions in these jurisdictions, including intercompany foreign royalty income in Germany which is statutorily exempt from trade tax. Further, we have intercompany financing arrangements in which the intercompany interest income is nontaxable in Poland, beginning the first quarter of 2024, and in Dubai.

We assess uncertain tax positions in accordance with ASC 740 Income Taxes. At September 30, 2024, our gross unrecognized tax benefits totaled approximately $103.0 million which, if recognized, would favorably impact our effective tax rate in the periods in which they are recognized. We estimate that approximately $26.1 million of the unrecognized tax benefits may be released during the next 12 months due to lapse of statutes of limitations or settlements with taxing authorities. However, various events could cause our current expectations to change in the future. While we believe our income tax contingencies are adequate, the final resolution of these issues, if unfavorable, could have a material impact on the consolidated financial statements. We cannot reasonably estimate the range of the potential outcomes of these matters.

We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in the Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. Tax years in the Netherlands are potentially open back to 2011 for income tax examinations by taxing authorities. Our subsidiaries, with few exceptions, are no longer open to income tax examinations by taxing authorities for years before 2019. Since 2022, the German group has been under audit for the 2017-2019 tax years and beginning in late 2023, the U.S. group is under audit for the 2014-2020 tax years.

As of September 30, 2024, residual Netherlands income taxes have not been provided on the undistributed earnings of the majority of our foreign subsidiaries as these earnings are considered to be either permanently reinvested or can be repatriated tax free under the Dutch participation exemption.

12.Share-Based Compensation

Stock Units

Stock units represent rights to receive our common shares at a future date and include restricted stock units which are subject to time-based vesting only and performance stock units which include performance conditions in addition to time-based vesting. Shares are issued on the vesting dates net of the applicable statutory tax withholding to be paid by us on behalf of our employees. As a result, fewer shares are issued than the number of stock units outstanding. We record a liability for the tax withholding to be paid by us as a reduction to treasury shares.

At September 30, 2024, there was $62.8 million remaining in unrecognized compensation expense, less estimated forfeitures, related to stock awards which will be recognized over a weighted-average period of 1.58 years.

Share-Based Compensation Expense

For the three- and nine-month periods ended September 30, 2024 and 2023, share-based compensation expense was as follows:


Three Months Ended September 30,	Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023

Cost of sales	$1,130	$1,006	$3,077	$2,462
Research and development	104	2,134	4,722	5,442
Sales and marketing	3,193	3,979	9,171	10,323
General and administrative	4,423	5,940	15,823	16,840
Share-based compensation expense before taxes	8,850	13,059	32,793	35,067
Less: Income tax benefit	2,012	3,097	7,533	7,982
Share-based compensation expense, after tax	$6,838	$9,962	$25,260	$27,085

13.Equity

Issuance and Conversion of Warrants

In connection with the issuance of the 2024 Notes as described in Note 8 "Debt," we issued Warrants as summarized in the table below. The number of warrants and exercise prices are subject to customary adjustments under certain circumstances. The proceeds, net of issuance costs, from the sale of the Warrants are included as additional paid-in capital in the accompanying condensed consolidated balance sheets.

The Warrants are exercisable only upon expiration. For each Warrant that is exercised, we will deliver to the holder a number of common shares equal to the amount by which the settlement price exceeds the exercise price, divided by the settlement price, plus cash in lieu of any fractional shares. The Warrants could separately have a dilutive effect on common shares to the extent that the market value per common share exceeds the applicable exercise price of the Warrants (as measured under the terms of the Warrants).


Cash convertible notes	Issued on	Number of share warrants issued (in millions)	Weighted Average Exercise price per share	Proceeds from issuance of warrants, net of issuance costs (in millions)	Warrants expire over a period of 50 trading days beginning on

2024 Notes	November 13, 2018	10.9	$	50.3346	$	72.4	August 27, 2024

All Warrants related to the 2024 Notes that mature in November 2024 will expire unexercised.

Synthetic Share Repurchase Program

In January 2024, we completed a capital repayment program through a synthetic share repurchase that combined a direct capital repayment with a reverse stock split. The synthetic share repurchase was implemented through a series of amendments to our Articles of Association which were approved by our shareholders. The first amendment involved an increase in share capital by an increase in the nominal value per common share from EUR 0.01 to EUR 1.18 and a corresponding reduction in additional paid in capital. The second amendment involved a reduction in common shares whereby 25 existing common shares with a nominal value of EUR 1.18 each were consolidated into 24.25 new common shares with a nominal value of EUR 1.22 each. The third amendment was a reduction of the nominal value per common share from EUR 1.22 to EUR 0.01. As a result of these amendments, which in substance constitute a synthetic share buyback, $292.1 million was repaid to our shareholders and the outstanding number of common

shares was reduced by 6.8 million, or 3%. Total expenses incurred related to the capital repayment and share consolidation amounted to $0.8 million and were charged to equity through the nine months ended September 30, 2024.

Accumulated Other Comprehensive Loss

The following table is a summary of the components of accumulated other comprehensive loss as of September 30, 2024 and December 31, 2023:


(in thousands)	September 30, 2024	December 31, 2023

Net unrealized loss on hedging contracts, net of tax	($42,319)	($37,372)
Net unrealized gain on pension, net of tax	812	812
Foreign currency effects from intercompany long-term investment transactions, net of tax benefits of $13.2 million in 2024 and 2023	(33,650)	(33,648)
Foreign currency translation adjustments	(338,318)	(363,622)
Accumulated other comprehensive loss	($413,475)	($433,830)

14.Earnings Per Common Share

We present basic and diluted earnings per common share. Basic earnings per common share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding. Diluted earnings per common share reflect the potential dilution of earnings that would occur if all "in the money" securities to issue common shares were exercised. Due to the net loss for the nine-month period ended September 30, 2024, restricted stock units representing approximately 2.2 million weighted-average number of common shares were excluded from the computation of diluted net loss because the impact would have been antidilutive.

The following table for the three- and nine-month periods ended September 30, 2024 and 2023 summarizes the information used to compute earnings (loss) per common share:


Three Months Ended September 30,	Nine Months Ended September 30,
(in thousands, except per share data)	2024	2023	2024	2023

Net income (loss)	$98,056	$77,818	($4,731)	$243,639

Weighted average number of common shares used to compute basic earnings per common share	222,314	228,258	222,712	228,104
Dilutive effect of outstanding stock options and restricted stock units	1,721	2,355	-	2,474
Weighted average number of common shares used to compute diluted earnings per common share	224,035	230,613	222,712	230,578

Outstanding stock awards having no dilutive effect, not included in above calculation	-	2	2,197	1
Outstanding warrants having no dilutive effect, not included in above calculation	10,892	18,225	10,892	19,782

Basic earnings (loss) per common share	$0.44	$0.34	($0.02)	$1.07
Diluted earnings (loss) per common share	$0.44	$0.34	($0.02)	$1.06

For purposes of considering the 2027 Notes and the 2031 Notes, as discussed further in Note 8 "Debt," in determining diluted earnings per common share, only an excess of the conversion value over the principal amount would have a dilutive impact using the treasury stock method. Since the 2027 Notes and the 2031 Notes were out of the money and anti-dilutive during the period from January 1, 2023 through September 30, 2024, they were excluded from the diluted earnings per common share calculations in 2023 and 2024.

15.Commitments and Contingencies

Contingent Consideration Commitments

Pursuant to the purchase agreements for certain acquisitions, we could be required to make additional contingent cash payments for a previous business combination based on the achievement of certain FDA approval milestones. Potential milestone payments total $20.7 million, of which $8.9 million may be triggered by the end of 2024 and $11.8 million by the end of 2025. Based on the current estimate of potential milestone payments, $8.4 million is included in accrued and other current liabilities and $10.0 million is included in other long-term liabilities in the accompanying condensed consolidated balance sheet as of September 30, 2024.

Contingencies

In the ordinary course of business, we provide a warranty to customers that our products are free of defects and will conform to published specifications. Generally, the applicable product warranty period is one year from the date of delivery of the product to the customer or of site acceptance, if required. Additionally, we typically provide limited warranties with respect to our services. We provide for estimated warranty costs at the time of the product sale. At the time product revenue is recognized, a provision for estimated future warranty costs is recorded in cost of sales based on historical experience. We periodically review the provision and adjust, if necessary, based on actual experience and estimated costs to be incurred. We believe our warranty reserves, which totaled $4.0 million and $3.9 million as of September 30, 2024 and December 31, 2023, appropriately reflect the estimated cost of such warranty obligations.

Litigation

From time to time, we may be party to legal proceedings incidental to our business which may arise in the ordinary course and conduct of business as well as through acquisition. As of September 30, 2024, certain claims, lawsuits or legal proceedings arising out of the normal course of business have been filed or were pending against QIAGEN or our subsidiaries. Although it is not possible to predict the outcome of such litigation, we assess the degree of probability and evaluate the reasonably possible losses that we could incur as a result of these matters. We accrue for any estimated loss when it is probable that a liability has been incurred and the amount of probable loss can be estimated. We are not party to any material legal proceeding as of the date of this report except for the matters listed below.

Patent Litigation

ArcherDX

In 2018, ArcherDX (a company which spun out as an independent company in conjunction with QIAGEN's acquisition of Enzymatics in 2015 and was later acquired by Invitae in 2021) and Massachusetts General Hospital (MGH) sued QIAGEN for patent infringement. In August 2021, a federal jury ruled that QIAGEN infringed two patents owned by ArcherDX and awarded damages of $4.7 million which were accrued in 2021 and remain accrued as of September 30, 2024 in other long-term liabilities in the accompanying condensed consolidated balance sheet. We filed an appeal in August 2023 after the verdict was entered.

Other litigation matters

For all other matters, management's best estimate of the potential liability amounts to $0.8 million and $4.8 million as accrued as of September 30, 2024 and December 31, 2023, respectively, in accrued and other current liabilities. The estimated range of possible losses for these other matters as of September 30, 2024 is between $0.3 and $5.2 million.

Based on the facts known to QIAGEN and after consultation with legal counsel, management believes that such litigation will not have a material adverse effect on our financial position or results of operations above the amounts accrued. However, the outcome of these matters is ultimately uncertain. Any settlements or judgments against us in excess of management's expectations could have a material adverse effect on our financial position, results of operations or cash flows.

Operating and Financial Review and Prospects

This section contains a number of forward-looking statements. These statements are based on current management expectations, and actual results may differ materially. Among the factors that could cause actual results to differ from management's expectations are those described in "Risk Factors" and "Forward-looking and Cautionary Statements" below.

Forward-looking and Cautionary Statements

This report contains forward-looking statements that are subject to risks and uncertainties. These statements can be identified by the use of forward-looking terminology, such as "believe," "hope," "plan," "intend," "seek," "may," "will," "could," "should," "would," "expect," "anticipate," "estimate," "continue" or other similar words. Forward-looking statements include but are not limited to, statements that relate to our future revenue, margins, costs, operating expenses, tax expenses, earnings, profitability, demand, levels of research and development, growth and expansion, the success of our marketing and sales efforts, the expected benefits and other statements relating to acquisitions and business combinations, the expected benefits and other statements relating to the 2024 restructuring program, including the expected size, make-up and timing of the restructuring charge, costs associated with licensing, information technology and cyber security, the timing and costs associated with marketing and regulatory approvals for our products, market performance of our stock, our adoption of newly issued accounting guidance, and the sufficiency of financial resources to fund planned operations and expansion. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. We caution investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, the following: risks associated with our dependence on the development and success of new products; management of growth and expansion of operations (including the effects of currency fluctuations, tax laws, regulatory processes and dependence on suppliers and logistics services); variability of operating results; integration of acquired businesses; changing relationships with customers, suppliers and strategic partners; competition; rapid or unexpected changes in technologies; fluctuations in demand for QIAGEN's products (including fluctuations due to general economic conditions, the level and timing of customers' funding, budgets and other factors, including delays or limits in the amount of reimbursement approvals or public health funding); our ability to obtain regulatory approval of our products; difficulties in successfully adapting QIAGEN's products to integrated solutions and producing such products; the ability of QIAGEN to identify and develop new products and to differentiate and protect our products from competitors' products; market acceptance of new products and the integration of acquired technologies and businesses; actions of governments, global or regional economic developments, including inflation and rising interest rates, weather or transportation delays, natural disasters, cyber security breaches, political or public health crises, and its impact on the demand for our products and other aspects of our business, or other force majeure events; litigation risk, including patent litigation and product liability; debt service obligations; volatility in the public trading price of our common shares; as well as the possibility that expected benefits related to recent or pending acquisitions may not materialize as expected; and the other factors discussed under the heading "Risk Factors" in our most recent Annual Report on Form 20-F. For further information, refer to the more specific risks and uncertainties discussed under "Risks and Risk Management" in our Annual Report on Form 20-F for the year ended December 31, 2023.

Results of Operations

Selected Operating Performance

•Total net sales rose 5% in the third quarter of 2024 totaling $501.9 million compared to $475.9 million in the year-ago period, with net sales stable in the nine months ended September 30, 2024 at $1.46 billion compared to $1.46 billion in 2023. Total net sales were adversely impacted by unfavorable currency movements against the U.S. dollar by one percentage point in the nine-month period ended September 30, 2024.

•The operating margin of 22% for the third quarter of 2024 and -1.5% for the nine months ended September 30, 2024 reflects a total of $15.4 million and $364.9 million of restructuring charges, respectively, related to the 2024 restructuring program which commenced in the second quarter of 2024, as fully discussed in Note 3 "Restructuring and Impairments."

•Net cash provided by operating activities increased 56% to $482.0 million in the first nine months of 2024 from $308.1 million in the year-ago period. Cash flow results for the first nine months of 2024 reflected a decrease in working capital requirements.

Three- and Nine-Month Periods Ended September 30, 2024 compared to Three- and Nine-Month Periods Ended September 30, 2023

Net Sales

In the tables presented below, results may not sum and percentages may not recalculate due to rounding.


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Product type
Consumables and related revenues	$447.7	$416.6	+7	%	$1,299.4	$1,281.7	+1	%
Instruments	54.2	59.3	-9	%	157.6	174.4	-10	%
Net sales	$501.9	$475.9	+5	%	$1,457.0	$1,456.1	0	%

Customer class
Molecular Diagnostics	$282.3	$254.4	+11	%	$792.2	$764.5	+4	%
Life Sciences	219.6	221.5	-1	%	664.8	691.7	-4	%
Net sales	$501.9	$475.9	+5	%	$1,457.0	$1,456.1	0	%


Three Months Ended September 30,	Nine Months Ended September 30,
Product group (in millions)	2024	2023	% change	2024	2023	% change

Sample technologies	$161.9	$160.4	+1	%	$480.2	$498.5	-4	%
Diagnostic solutions	197.4	178.8	+10	%	552.5	518.1	+7	%
PCR / Nucleic acid amplification	74.3	68.0	+9	%	218.0	219.3	-1	%
Genomics / NGS	54.7	54.7	0	%	167.8	173.9	-3	%
Other	13.6	14.1	-3	%	38.5	46.4	-17	%
Net sales	$501.9	$475.9	+5	%	$1,457.0	$1,456.1	0	%

Sample technologies involve the sale of consumable kits and instruments for use in obtaining DNA, RNA and proteins from biological samples. This product group showed higher consumable sales over the year-ago period, while instrument sales declined modestly despite ongoing solid placements trends for the QIAcube Connect and EZ2 systems. Sales of sample technologies were adversely impacted by unfavorable currency movements against the U.S. dollar by one percentage point in the nine months ended September 30, 2024.

Diagnostic solutions involve the sale of regulated consumable kits and instruments for use in clinical healthcare, as well as revenues from our Precision Diagnostics portfolio and companion diagnostic co-development projects with pharmaceutical companies. Sales in this product group grew 10% and 7% for the three and nine months ended

September 30, 2024, respectively, compared to the year-ago periods, driven by solid gains in consumables sales offset by lower instrument sales. QuantiFERON TB test for latent tuberculosis (TB) detection maintained a 10% increase in sales both for the three and nine months ended September 30, 2024 supported by solid demand trends in all regions on conversion from the tuberculin skin test. QIAstat-Dx grew 41% and 24% in the third quarter and first nine months of 2024, respectively, on sales gains in both consumables and instrument sales. QIAstat-Dx placements are expected to remain on track to achieve our goal of at least 600 new systems in 2024. NeuMoDx results reflected the decision in June 2024 to discontinue this system and support customers during a transition period into 2025.

PCR / Nucleic acid amplification involves consumable kits used in non-regulated applications. Overall product group sales growth of 9% in the three months ended September 30, 2024 and decline of 1% in the nine months ended September 30, 2024 reflected solid gains in various consumables kits, especially the new range of assays launched for the QIAcuity digital PCR system, amid overall weaker instrument sales due to the cautious instrument purchasing environment. Sales in this product group were adversely impacted by unfavorable currency movements against the U.S. dollar by one percentage point in the nine months ended September 30, 2024.

Genomics / NGS involves our portfolio of universal solutions as well as the full QIAGEN Digital Insights portfolio. Sales in the three months ended September 30, 2024 were largely unchanged, but fell 3% in the nine months ended September 30, 2024, driven by growth in NGS consumables offset by a modest decline in sales in the QIAGEN Digital Insights (QDI) bioinformatics business reflecting a transition of some agreements to SaaS (software-as-a-service) from licensing agreements.


Three Months Ended September 30,	Nine Months Ended September 30,
Geographic region (in millions)	2024	2023	% change	2024	2023	% change

Americas	$268.6	$254.2	+6	%	$764.2	$763.9	0	%
Europe, Middle East and Africa	158.2	145.2	+9	%	469.9	451.3	+4	%
Asia Pacific, Japan and Rest of World	75.1	76.5	-2	%	223.0	241.0	-7	%
Net sales	$501.9	$475.9	+5	%	$1,457.0	$1,456.1	0	%

Net sales in the Americas region increased 6% during the third quarter but were unchanged in the first nine months of 2024, reflecting lower sales of instruments and consumables. Results include improving demand for QuantiFERON, QIAstat-Dx and QIAcuity consumables in the region.

Net sales in the Europe, Middle East and Africa (EMEA) region in the three and nine months ended September 30, 2024 were 9% and 4% higher compared to respective year-ago periods driven by results in Italy, Turkey, Belgium and the Netherlands.

Net sales in the Asia Pacific, Japan and Rest of World region declined 2% and 7% in the three and nine months ended September 30, 2024, respectively, compared to the year-ago periods, reflecting challenging macro demand trends in China over the year-ago period. Sales in this region were adversely impacted by two percentage points of unfavorable currency movements against the U.S. dollar in the nine months ended September 30, 2024.

Gross Profit


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Gross profit	$308.3	$298.0	+3	%	$634.1	$917.6	-31	%
Gross margin	61.4	%	62.6	%	43.5	%	63.0	%

The gross margin in the three and nine months ended September 30, 2024 reflects changes in individual product sales and mix. Generally, our consumables and related products have a higher gross margin than our instrumentation products and service arrangements. Fluctuations in the sales levels between periods can cause changes in gross

profit between periods. In the three and nine months ended September 30, 2024, gross margin was impacted by inventory write offs and impairments recorded in connection with the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments."

Sales and Marketing


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Sales and marketing	$111.3	$111.5	0	%	$337.1	$342.4	-2	%
% of net sales	22.2	%	23.4	%	23.1	%	23.5	%

Sales and marketing expenses were unchanged in the three months ended September 30, 2024 and decreased by 2% during the nine months ended September 30, 2024, compared to the respective prior year periods. The overall change in sales and marketing expenses primarily reflects lower freight and other supply chain costs while including an unfavorable currency exchange impact of $0.5 million and a favorable currency exchange impact of $1.8 million in the three and nine months ended September 30, 2024, respectively. Sales and marketing expenses are primarily associated with personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional expenses. The increased use of digital customer engagement continues to build on the new habits of customers and enhance customer engagement with a focus on greater efficiency and effectiveness.

Research and Development


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Research and development	$44.5	$47.9	-7	%	$144.9	$152.5	-5	%
% of net sales	8.9	%	10.1	%	9.9	%	10.5	%

Research and development expense decreased by 7% and 5% during the three and nine months ended September 30, 2024, respectively, compared to the prior year periods. The overall decrease in research and development expense in the three and nine months ended September 30, 2024 reflects the June 2024 decision to discontinue the NeuMoDx system as well as unfavorable currency exchange impacts of $0.5 million and $1.2 million, respectively. We continue to focus on investments targeted to drive sustainable growth. As we continue to discover, develop and acquire new products and technologies, we expect to incur additional expenses related to facilities, licenses and employees engaged in research and development. Overall, research and development costs are expected to increase as a result of seeking regulatory approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE approval of certain assays or instruments. Further, business combinations, along with the acquisition of new technologies, may increase our research and development costs in the future. We have a strong commitment to innovation and expect to continue to make investments in our research and development efforts.

General and Administrative


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

General and administrative	$29.4	$28.6	+3	%	$85.6	$90.8	-6	%
% of net sales	5.9	%	6.0	%	5.9	%	6.2	%

General and administrative expenses increased 3% during the three months ended September 30, 2024 and decreased 6% during nine months ended September 30, 2024 compared to the prior year periods. These results reflect efficiency gains across many administrative functions as well as investments into our information technology systems

(including an upgrade of the SAP enterprise resource planning system) and into cyber security measures. General and administrative costs include a favorable currency impact of $0.1 million in the nine months ended September 30, 2024. In the future, we expect to incur higher costs due to higher licensing and information technology costs as well as increased cyber security costs.

Acquisition-Related Intangible Amortization


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Acquisition-related intangible amortization	$2.4	$2.7	-13	%	$7.8	$8.1	-4	%
% of net sales	0.5	%	0.6	%	0.5	%	0.6	%

Amortization expenses related to acquisition-related intangibles decreased by 13% and 4% during the three and nine months ended September 30, 2024, respectively, compared to the respective prior year periods. Amortization expense related to developed technology and patent and license rights acquired in business combinations are included in cost of sales. Amortization of trademarks and customer base acquired in business combinations are recorded in operating expense under the caption "acquisition-related intangible amortization." Amortization expenses of intangible assets not acquired in business combinations are recorded within cost of sales, research and development, or sales and marketing line items based on the use of the asset. The decrease in expense reflects the impairment of acquired intangible assets in connection with the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments." Our acquisition-related intangible amortization recorded in operating expenses may increase in the event of future acquisitions.

Restructuring, Acquisition, Integration and Other, net


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Restructuring, acquisition, integration and other, net	$8.7	$10.0	-13	%	$80.1	$24.4	+228	%
% of net sales	1.7	%	2.1	%	5.5	%	1.7	%

Restructuring, acquisition, integration and other, net included $6.8 million and $73.2 million, respectively, in the three and nine months ended September 30, 2024 of charges related to the 2024 restructuring program described in Note 3 "Restructuring and Impairments." We expect to incur additional restructuring costs in 2024 as discussed in in Note 3 "Restructuring and Impairments." In addition, during the third quarter and first nine months of 2024, we continued to incur integration costs related to the acquisition of Verogen, Inc. in January 2023.

Other Income (Expense), net


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Interest income	$18.3	$20.4	-10	%	$52.9	$59.7	-11	%
Interest expense	(11.5)	(13.0)	-12	%	(32.7)	(41.0)	-20	%
Other expense, net	(2.4)	(4.7)	(3.5)	(7.2)
Total other income, net	$4.4	$2.6	$16.7	$11.6

Interest income includes interest earned on cash, cash equivalents and short-term investments, income related to certain interest rate derivatives as discussed in Note 9 "Derivatives and Hedging" and other components including the interest portion of operating lease transactions. The decrease in the three and nine months ended September 30, 2024 compared to the year-ago periods is attributable to changing interest rates and the duration and level of short-term investments held during the period.

Interest expense primarily relates to debt, discussed in Note 8 "Debt" in the accompanying notes to the condensed consolidated financial statements. The decrease in the three and nine months ended September 30, 2024 compared to the prior year period reflects the repayment of the Cash Convertible Notes (2023 Notes) that matured in September 2023 totaling $400.0 million and the repayment of two tranches of 2017 Schuldschein in June 2024 for $101.5 million. Interest expense was also lowered by capitalized interest associated with assets under construction.

For the three months ended September 30, 2024, other expense, net includes $1.1 million loss on foreign currency transactions and $0.9 million loss from equity method investments. For the three months ended September 30, 2023, other expense, net includes $2.0 million loss on foreign currency transactions and $1.2 million of income from equity method investments.

For the nine months ended September 30, 2024, other expense, net includes $4.0 million loss on foreign currency transactions partially offset by $2.7 million of income from equity method investments. For the nine months ended September 30, 2023, other expense, net includes $5.3 million loss on foreign currency transactions and $2.0 million of income from equity method investments.

Provision for Income Taxes


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	% change	2024	2023	% change

Income (loss) before income tax expense	$116.5	$99.8	+17	%	($4.7)	$310.9	-102	%
Income tax expense	$18.4	22.0	-16	%	$0.0	67.3	-100	%
Net income (loss)	$98.1	$77.8	($4.7)	$243.6

Effective tax rate	15.8	%	22.0	%	(0.6)	%	21.6	%

Our effective tax rate differs from the Netherlands statutory tax rate of 25.8% due in part to our operating subsidiaries being exposed to statutory tax rates ranging from zero to 35%. Fluctuations in the distribution of pre-tax income or loss among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements. Our effective tax rates in 2024 are lower compared to 2023 primarily as a result of restructuring charges recorded in 2024 related to the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments." We record partial tax exemptions on foreign income primarily derived from operations in Germany. These foreign tax benefits are due to a combination of favorable tax laws and exemptions in these jurisdictions, including intercompany foreign royalty income in Germany which is statutorily exempt from trade tax. Further, we have intercompany financing arrangements in which the intercompany interest income is nontaxable in Poland, beginning the first quarter of 2024, and in Dubai.

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two), with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025. The Netherlands formally enacted the Pillar Two legislation into domestic law. We expect to be subject to the top-up tax in relation to our operations in Dubai (United Arab Emirates) and Poland.

In future periods, our effective tax rate may fluctuate from similar or other factors as discussed in "Changes in tax laws or their application or the termination or reduction of certain government tax incentives, could adversely impact our overall effective tax rate, results of operations or financial flexibility" under "Risks and Risk Management" in the Annual Report on Form 20-F for the year ended December 31, 2023.

Liquidity and Capital Resources

To date, we have funded our business primarily through internally generated funds, debt and private and public sales of equity. Our primary use of cash has been to support continuing operations and our investing activities, including capital expenditure requirements and acquisitions.


(in millions)	September 30, 2024	December 31, 2023

Cash and cash equivalents	$973.0	$668.1
Short-term investments	507.4	389.7
Total cash and cash equivalents and short-term investments	$1,480.4	$1,057.8

Working capital	$1,325.5	$1,068.3

Cash and cash equivalents are primarily held in U.S. dollars and euros, other than those cash balances maintained in the local currency of subsidiaries to meet anticipated local working capital needs. At September 30, 2024, cash and cash equivalents totaled $1.5 billion having increased by $304.9 million from December 31, 2023, primarily as a result of net cash provided by operating activities of $482.0 million and net cash provided by financing activities of $66.1 million, partially offset by cash used in investing activities of $242.4 million as discussed in the Cash Flow Summary below.

Cash Flow Summary


Nine Months Ended September 30,
(in millions)	2024	2023

Net cash provided by operating activities	$482.0	$308.1
Net cash used in investing activities	(242.4)	(29.2)
Net cash provided by (used in) financing activities	66.1	(426.4)
Effect of exchange rate changes on cash and cash equivalents	(0.8)	(3.2)
Net increase (decrease) in cash and cash equivalents	$304.9	($150.7)

Operating Activities

For the nine months ended September 30, 2024 and September 30, 2023, we generated net cash from operating activities of $482.0 million and $308.1 million, respectively. While we reported a net loss of $4.7 million for the nine months ended September 30, 2024, non-cash components in the loss included $200.3 million of non-cash impairments primarily recorded in connection with the 2024 restructuring program discussed in Note 3 "Restructuring and Impairments," $157.7 million of depreciation and amortization, $32.8 million of share-based compensation expense, $15.4 million of amortization of debt discount and $32.3 million of deferred tax benefits from the net loss position. The increase in net cash provided by operating activities in 2024 as compared to 2023 is primarily the result of higher collections of accounts receivable, lower purchases of inventory and lower payments of accrued and other liabilities. In June 2024, we initiated the 2024 restructuring program discussed in Note 3 and estimate a total of approximately $100 million of cash payments through 2025 for this program. Because we rely heavily on cash generated from operating activities to fund our business, a decrease in demand for our products, longer collection cycles or significant technological advances of competitors could have an impact on our liquidity.

Investing Activities

$242.4 million of cash was used in investing activities during the nine months ended September 30, 2024 compared to $29.2 million of cash used for the same period in 2023. Cash used in investing activities include $561.4 million of purchases of short-term investments, $118.5 million paid for purchases of property, plant and equipment, $3.1 million

paid for the purchases of intangible assets and $0.9 million paid to our derivative counterparties to collateralize our derivative liabilities with them, mostly offset by $443.2 million from the sale of short-term investments. Cash used in investing activities during the nine months ended September 30, 2023 included $905.6 million in purchases of short-term investments, $149.5 million of net cash paid for the acquisition of Verogen, Inc., $98.3 million paid for purchases of property, plant and equipment, $12.6 million paid to our derivative counterparties in connection with cash we had provided to collateralize our derivative liabilities with them, $12.3 million for the purchases of intangible assets, partially offset by $1.2 billion received from the sale of short-term investments.

Financing Activities

Net cash provided by financing activities totaled $66.1 million for the nine months ended September 30, 2024 and includes proceeds of $496.4 million from the issuance of convertible notes partially offset by a net $292.1 million capital repayment made as part of a synthetic share repurchase discussed in Note 13 "Equity," $101.5 million repayment of long-term-debt as further discussed in Note 8 "Debt," and $33.3 million paid in connection with net share settlement for tax withholding related to the vesting of stock awards and $2.6 million paid to our derivative counterparties to collateralize derivative assets that we hold with them. Net cash used in financing activities was $426.4 million for the nine months ended September 30, 2023 including $400.0 million for the repayment of long-term debt, $17.2 million paid in connection with net share settlement for tax withholding related to the vesting of stock awards and $9.4 million paid to our derivative counterparties to collateralize derivative assets that we hold with them.

Other Factors Affecting Liquidity and Capital Resources

As of September 30, 2024, we carry a total of $1.9 billion of long-term debt, of which $0.6 billion is current and $1.4 billion is long-term.

In September 2024, we issued $500.0 million aggregate principal amount of 2.5% coupon Convertible Notes due 2031 (2031 Notes). The 2031 Notes will mature on September 10, 2031 unless converted in accordance with their terms prior to such date as described more fully in Note 8 "Debt."

In January 2024, we completed a synthetic share repurchase that combined a direct capital repayment with a reverse stock split. The transaction was announced on January 7, 2024, and involved an approach used by various large, multinational Dutch companies to provide returns to all shareholders in a faster and more efficient manner than traditional open-market repurchases. $295.2 million was returned to shareholders through the transaction, which reduced the total number of issued Common Shares by approximately 3%.

In July and August 2022, we completed another German private placement bond (2022 Schuldschein), which was issued in several tranches totaling €370.0 million due in various periods through 2032 as described more fully in Note 8 "Debt." The interest rate is linked to our environmental, social and governance (ESG) performance. As of September 30, 2024, a total of $413.5 million is outstanding.

In December 2020, we issued $500.0 million aggregate principal amount of zero coupon Convertible Notes due 2027 (2027 Notes). The 2027 Notes will mature on December 17, 2027 unless converted in accordance with their terms prior to such date as described more fully in Note 8 "Debt."

In November 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes due 2024 (2024 Notes). Interest on the 2024 Notes is payable semi-annually in arrears at a rate of 1.000% per annum. The 2024 Notes will mature on November 13, 2024.

In September 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes (2023 Notes) which were due and repaid in September 2023.

In 2017, we completed a German private placement (2017 Schuldschein) consisting of several tranches denominated in either U.S. dollars or euro at either floating or fixed rates and due at various dates through June 2027. As of September 30, 2024, a total of $16.2 million is outstanding. During the second quarter of 2024, we paid $101.5 million when two tranches matured.

In December 2020, we obtained a €400 million syndicated revolving credit facility with a contractual life of three years with the ability to extend by one year two times. No amounts were utilized at September 30, 2024. The facility can be utilized in euro and bears interest of 0.550% to 1.500% above EURIBOR and is offered with interest periods of one, three or six months. The interest rate is linked to our ESG performance. We have additional credit lines totaling €13.0 million with no expiration date, none of which were utilized as of September 30, 2024.

In connection with certain acquisitions, we could be required to make additional contingent cash payments totaling up to $20.7 million based on the achievement of certain revenue and operating results milestones as further discussed in Note 15 "Commitments and Contingencies."

We expect that cash from financing activities will continue to be impacted by issuances of our common shares in connection with our equity compensation plans and that the market performance of our stock will impact the timing and volume of the issuances. Additionally, we may make future acquisitions or investments requiring cash payments, the issuance of additional equity or debt financing.

We believe that funds from operations, existing cash and cash equivalents, together with the proceeds from any public and private sales of equity, and availability of financing facilities, will be sufficient to fund our planned operations and expansion during the coming year. However, any global economic downturn may have a greater impact on our business than currently expected, and we may experience a decrease in the sales of our products, which could impact our ability to generate cash. If our future cash flows from operations and other capital resources are not adequate to fund our liquidity needs, we may be required to obtain additional debt or equity financing or to reduce or delay our capital expenditures, acquisitions or research and development projects. If we could not obtain financing on a timely basis or at satisfactory terms, or implement timely reductions in our expenditures, our business could be adversely affected.

Quantitative and Qualitative Disclosures about Market Risk

Our market risk relates primarily to interest rate exposures on cash, marketable securities, and borrowings and foreign currency exposures on intercompany and third-party transactions. The overall objective of our risk management strategy is to reduce the potential negative earnings effects from changes in interest and foreign currency exchange rates. Exposures are managed through operational methods and financial instruments. We do not use financial instruments for trading or speculative purposes. Our exposure to market risk from changes in interest rates and currency exchange rates has not changed materially from our exposure discussed in "Quantitative and Qualitative Disclosures About Market Risk" in the Annual Report on Form 20-F for the year ended December 31, 2023.

Foreign Currency Risk

QIAGEN's functional currency is the U.S. dollar and most of our subsidiaries' functional currencies are the local currencies of the countries in which they are headquartered. All amounts in the financial statements of entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for the period, and (3) components of shareholders' equity at historical rates. Translation gains or losses are recorded in shareholders' equity, and transaction gains and losses are reflected in net income (loss). Foreign currency transactions in the three- and nine-month periods ended September 30, 2024 resulted in net losses of $1.1 million and $4.0 million, respectively, compared to net losses of $2.0 million and $5.3 million, respectively, in the same periods of 2023 and are included in other expense, net.

As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis using foreign exchange forward contracts, foreign exchange options and cross-currency swaps. At September 30, 2024, we were party to various foreign exchange forward, option and swap arrangements which had an aggregate notional value of $480.7 million which expire at various dates through July 2025. Additional information on our foreign exchange contracts is included in Note 9 "Derivatives and Hedging."

We are exposed to currency risks from foreign exchange contracts. If each of the respective currency pairs for derivatives which do not qualify for hedge accounting varied from the rates used for the preparation of the condensed consolidated financial statements, this would have had an effect which would have been almost fully off-set by corresponding valuation adjustments in the positions which economically had been hedged by these foreign exchange derivatives. Accordingly, the net effect of such variance in currency rates would not have been material.

Interest Rate Risk

We are exposed to interest rate risk on our short-term investments and our debt. This exposure is managed in the aggregate with a focus on immediate and intermediate liquidity needs.

Interest income earned on our cash investments is affected by changes in the relative levels of market interest rates. We only invest in high-grade investment instruments. A hypothetical adverse 10% movement in market interest rates would not have materially impacted our financial statements.

At September 30, 2024, we have $1.9 billion in current and long-term debt, of which $214.1 million is floating rate debt. We use interest rate derivative contracts to align our portfolio of interest-bearing assets and liabilities with our risk management objectives. At September 30, 2024, we are party to cross-currency interest rate swaps through 2025 for a total notional amount of €180.0 million under which we exchange, at specified intervals, the difference between the euro and USD interest amounts calculated on their respective fixed rates by reference to an agreed-upon euro and USD notional principal amounts. Also at September 30, 2024, we are party to cross-currency interest rate swaps through 2025 for a total notional amount of CHF 542.0 million under which we exchange, at specified intervals, the difference between the CHF and USD interest amounts calculated on their respective fixed rates by reference to an agreed-upon CHF and USD notional principal amounts. A hypothetical adverse 10% movement in market interest rates would not have materially impacted our financial statements.

We also make use of economic hedges. Further details of our derivative and hedging activities can be found in Note 9 "Derivatives and Hedging" to the accompanying condensed consolidated financial statements.

Recent Authoritative Pronouncements

For information on recent accounting pronouncements impacting our business, see Note 2 "Basis of Presentation and Accounting Policies" in the accompanying condensed consolidated financial statements.

Application of Critical Accounting Estimates

The preparation of our financial statements in accordance with accounting principles generally accepted in the United States requires management to make assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Critical accounting estimates are those that require the most complex or subjective judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. Thus, to the extent that actual events differ from management's estimates and assumptions, there could be a material impact on the financial statements. In applying our critical accounting estimates, at times we used accounting estimates that either required us to make assumptions about matters that were highly uncertain at the time the estimate was made or were reasonably likely to change from period to period, having a material impact on the presentation of our results of operations, financial position or cash flows. While changing conditions in our global environment present additional uncertainty, we continue to use the best information available to form our estimates. Our critical accounting estimates are those related to income taxes, share-based compensation, acquisitions, amortized intangible assets, and fair value measurements.

Our critical accounting estimates are discussed further in our Annual Report on Form 20-F for the year ended December 31, 2023. Actual results in these areas could differ from management's estimates.

Off-Balance Sheet Arrangements

We did not use special purpose entities and did not have off-balance-sheet financing arrangements as of September 30, 2024 and December 31, 2023.

Legal Proceedings

For information on legal proceedings, see Note 15 "Commitments and Contingencies" to the accompanying condensed consolidated financial statements.

While no assurances can be given regarding the outcome of the proceedings described in Note 15, based on information currently available, we believe that the resolution of these matters is unlikely to have a material adverse effect on our financial position or results of future operations for QIAGEN as a whole. However, because of the nature and inherent uncertainties of litigation, should the outcomes be unfavorable, certain aspects of our business, financial condition, and results of operations and cash flows could be materially adversely affected.

Risk Factors

Material risks that may affect our results of operations and financial position appear under "Risks and Risk Management" in our Annual Report on Form 20-F for the year ended December 31, 2023. There have been no material changes from the risk factors disclosed in our Form 20-F.

_________________________________

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Qiagen N.V. Presents at 6th Annual Wolfe Research Healthcare Conference 2024, Nov-20-2024 12:40 PM	Nov. 20
QIAGEN NV : Jefferies is Neutral	Nov. 20	ZD
Qiagen N.V. Presents at Jefferies London Healthcare Conference 2024, Nov-20-2024 09:00 AM	Nov. 20
Qiagen N.V. Presents at Stifel 2024 Healthcare Conference, Nov-19-2024 09:00 AM	Nov. 19
Qiagen Partners With McGill University for Microbiome Research	Nov. 13	MT
Qiagen, McGill University Enter Partnership Deal for Microbiome Research Development	Nov. 13	MT
Qiagen Collaborates with McGill University to Advance Microbiome Research	Nov. 12	CI
QIAGEN NV : UBS reiterates its Neutral rating	Nov. 11	ZD
Qiagen N.V., Q3 2024 Earnings Call, Nov 07, 2024	Nov. 07
QIAGEN NV : Deutsche Bank reaffirms its Buy rating	Nov. 07	ZD
QIAGEN : Markets hailed the Q3 beat + the profitability upgrade	Nov. 07
QIAGEN NV : Receives a Buy rating from Berenberg	Nov. 07	ZD
Qiagen Q3 Adjusted Earnings, Revenue Increase; Raises 2024 Adjusted Earnings Guidance	Nov. 07	MT
QIAGEN NV : UBS reaffirms its Neutral rating	Nov. 07	ZD
Qiagen N.V. Reports Earnings Results for the Third Quarter and Nine Months Ended September 30, 2024	Nov. 06	CI
Diagnostics firm Qiagen reports rise in third-quarter revenue	Nov. 06	RE
Qiagen N.V. Reaffirms Earnings Guidance for the Full Year 2024	Nov. 06	CI
QIAGEN Says FDA Cleared QIAstat-Dx Panel for Meningitis/Encephalitis	Nov. 04	MT

Chart Qiagen N.V.

Duration

Period

QGEN: Dynamic Chart

Company Profile

Qiagen NV is a holding company based in the Netherlands. The Company is engaged in providing Sample to Insight solutions that transform biological samples into molecular insights. Its Sample to Insight solutions integrate sample and assay technologies, bioinformatics and automation systems. Its sample technologies are used for isolating and preparing deoxyribonucleic acid (DNA), ribonucleic acid (RNA) and proteins from blood or other liquids, tissue, plants or other materials. Its assay technologies make these biomolecules visible for analysis, such as identifying the genetic information of a pathogen or a gene mutation in a tumor. Its bioinformatics solutions interpret data to provide actionable insights. The Company's automation platforms based on polymerase chain reaction (PCR), next-generation sequencing (NGS) and other technologies tie these together in molecular testing workflows from Sample to Insight.

Employees

5,800

Sector

Biotechnology & Medical Research

Calendar

2024-12-16 - Business Update Call

More about the company