Okay. We can hopefully get started. Thanks for being here. I'm Patrick Donnelly, the Tools and Diagnostics analyst at Citi here. Have a nice day. Happy to continue, including Roland Sackers as CFO. Thank you guys for being here. I guess, Roland, maybe we can start. Q3 was quite eventful for you guys. Not only the results, CEO transition, acquisition, share repurchase. A lot was going on. Maybe just run us through kind of high level those announcements, and we can dive in a little deeper as we go.
Yeah, no, you're absolutely right. I think this year was clearly a good year for us so far. Again, we had a strong performance. Q1 started off as a year more or less with a 7% growth rate and a second quarter overall a 6% growth rate. Clearly doing better than the industry, clearly doing better in the market. Clearly also a testament to, I think, our overall footprint, particularly around our consumables business, having 85% of our business being related to consumables. Therefore, quite resilient is a good thing in a more volatile environment. On power sets, we clearly were also able to move the company strategically forward. I think we announced just last quarter another bolt-on acquisition. I think Parse Biosciences is a perfect addition to our existing portfolio. For sure, we talk in more detail about that today as well.
Of course, the capital allocation is a big topic for QIAGEN since 2012. We're doing quite regular share buybacks. We started with $100 million incrementals. We then moved to, I think for the last two years, to $300 million incrementals per year. We just announced now a $500 million share- buyback to be executed early next year. I think the combination of small board or board-on acquisitions plus share buybacks is something where we feel quite comfortable with. I don't think one excludes the others. Given our overall cash generation, I think it's a question of the least. It's clear also that our CEO and the board have sat together and discussed more or less the future of the CEO position. Again, Thierry was CEO for and is still CEO for 10 years with the company, six years CEO, and including quite difficult COVID times.
I think they came together to the conclusion that it's probably a good time for transition. Nevertheless, of course, he will stay fully committed and on board till a new CEO is identified. If that is an internal or external candidate, it's too early to say. I think the board gives themselves the time to find the appropriate candidate.
Yeah, perfect. Maybe we can start with the CEO transition. You mentioned internal, external. I'm sure you'll look at both. Maybe just the timing, the scope, put some context around that and the candidates you guys are looking for in terms of being the report.
Good question to the board. I do think from my perspective, I would say in Europe, it typically takes somewhere between three and six months. I do think that it's probably also a time frame I would envision here as well. Of course, I'm quite sure that the board wants to review different candidates, different calibers, internal, externally. I would not expect, and I'm leaning a bit out of my window a bit, any change to strategy because I would assume that investors, as us board, believe that right now we are executing quite well. We are clearly doing better than the industry. I do not think any strategic change should be a driving factor for that. I would rather believe that a strong execution and continuation of the successes over the last more or less years is what is envisioned.
Okay. On the acquisition side, you mentioned Parse Biosciences. What attracted you to that asset? What's the right way to think about the potential there? Maybe we can start on the growth side, and then we can talk a little bit about some of these.
Yeah, let me kick it off, and then Daniel might add to that. Again, Parse is clearly an attractive business for us because it fits very well in our overall sample prep business. Having in mind that, again, it is an important part for our growth, not only historically, but also going forward. We do believe Parse has a unique feature compared to other companies in that area. Clearly, good growth pattern. Having in mind that in 2024, there was around $20 million in revenues we expected for next year, around $60 million in revenues. We're actually doubling up in R&D, so I would expect that we rather believe that the growth pattern continues for quite some time. It's accretive also in the midterms to our overall margin structure. It's not only growing, it's also quite profitable while we're investing into R&D over time.
I would say we see some competitive edge, but add to that.
Yeah. What I might want to add is that, first of all, it's a very nice business because it comes at the very front end, dealing with intact cells. Single cell analysis is basically opening up a window from turning biology from a very group picture into a very sharp portrait of every single cell. This market is now becoming really attractive, also because of Parse, as Parse allows for the scaling up to analyze millions to billions of single cell data sets. It's a manual technology, and you need millions and billions of data sets to be able to feed AI models, which then can predict how a drug is working on organs, how an organ might function. This is really the part of the single cell analysis market which is most attractive to us.
Having in mind that we have with our bioinformatics franchise, QDI, we have a very interesting technology where we can turn the data generated with Parse Biosciences into workable biological insights.
Yeah. And just to add to that, I think one of the features we really like also, particularly in a given environment, is that you clearly can work with Parse Biosciences solutions without having or using an instrument, which is a significant benefit if you're seeing through that overall budget situation. Particularly for large CapEx investments or a larger CapEx investment, it's probably still not the easiest one, also probably for some time going forward. Having here the opportunities to kick that on a consumer-based only solution off is what we believe a strategic advantage.
Yeah. I guess, Roland, to that point on the instrument-free side, are there certain areas in the market where you're seeing more adoption on the instrument because it's instrument-free? I think the profile is $40 million, double-digit growth, the durability there. Maybe first on the instrument-free, are there certain applications or parts of the market where this is seeing more traction?
Yeah, I can kick it off as well, and then Daniel can add to that. First of all, Parse Biosciences, for example, has a significant footprint in terms of overall customers, but also, for example, the top 10 pharma customers are all customers of SLAM. I do not think it makes too much of a difference for a pharma company or for a life science academic company in general. I think both actually like the benefit of not having to use an instrument. Nevertheless, of course, we do believe that the scale impact for Qiagen right now is particularly coming out of the pharma environment because our reach here, of course, is much wider than what they could do as a standalone company. Bringing that in our global network on the life science/also the pharma side is probably a nice add-on.
Yeah. What I potentially could add to that is that we have thousands of customers, really. That is also alluding to what Roland just said. Parse Biosciences is currently dealing with around 3,000 customers. We have Bentley for them globally. As I said, it fits very nicely at the front end of our sample technology portfolio.
Yeah. Maybe sticking with sample tech since that is stuck to the part where it is going to tuck in. That business came back to growth a little bit. I think it was 3% in Q3. Consumables doing well and still a little bit heavy. Maybe just talk through that business, what you are seeing, what the expectations are going forward for sample tech.
I would agree. Sample prep improved quite a lot. It's clearly an important franchise for us. We were slightly negative in Q1, slightly positive in Q2, and, as you said correctly, 3% in the last quarter. That in a difficult environment, right? The academic franchise, particularly in the U.S., is not an easy one. Sample prep, of course, is a product we sell on the clinical side as well as on the research side. Good news for us is, again, the resilience of our consumable business, which is also within sample prep, somewhere 80-85%, is very well proven because of that. Because even during shutdowns, consumables are getting still sold and utilized in the labs.
Of course, it is more difficult to sell instruments because if you do not know if you have funding the year after, you do not invest into an automation solution because you might also kickstart certain follow-on investments on incremental pull-through to an operator in front of the machine. Nevertheless, what makes us very positive on sample prep midterm and actually also for next year is we have three significant instrumentation launches coming up. That is also for Qiagen, a significant number of new machines. In particular, and I really do not want to pick one, but just to kick it off, the QIAsprint Connect machine is an important launch for us. Why? Because it is going in the high throughput part of sample preparation where Qiagen does not have any footprint. That means any incremental sale of the instrument is an incremental revenue opportunity for us.
Of course, every instrument by itself generates an incremental consumables stream. That is something we are quite excited about. We just launched the QIAsymphony just more or less a few weeks ago. We have, I think, a good insight into our books here as well. Clearly, also we will be incrementally successful for next year. Here, of course, it is probably the beginning of more of the instrumentation part of the business. Why? Because we have an existing symphony. As you know, symphonies are a flagship platform for many years. We are going probably at the beginning of replacing rather existing instruments. Therefore, we have good instrumentation contributions, but I would not expect that the consumable increase here will be significant, at least in the first couple of months.
Yeah. You guys did that deep dive on the sample prep business a couple of weeks ago. You mentioned the liquid biopsy MRD part a couple of times. Obviously, a nice double-digit growth driver. Can you talk about the presence there, what you guys are doing for liquid biopsy? Obviously, a high-growth vertical in diagnostics. How big is that today? If you're willing to kind of break down what part of sample prep that is? Where could that go? Because obviously, it's a big growth market.
If you think about QIAGEN over the last 40 years, how we've innovated and created the sample prep market here, what you're seeing in liquid biopsy, where you're taking blood to be able to do cancer testing, you can also do prenatal analysis type work. This is an area growing north of 30% for us. We won't size the overall market for competitive reasons, but we're on the front end of Natera, Guardant, these key players in that market, and helping them to be able to scale this market, like you said. This is an area where we continue to innovate. We're working on new ways to help them be able to handle the volumes of tests that they have to process. QIAsymphony Connect is the next generation of that. We'll see how we continue to innovate in that area to help them with automation.
Okay. Do these new products in the market, do they lean a little more in some of these higher-growth areas? What's the right way to think about new products in terms of what they could contribute into next year, particularly again, QIAsprint, QIAmini?
QiAsprint 4, as an example, start with that one. This is a research application product. QIAmini is a research application product as well. That's designed for the small academic bench where you're working with up to 10-15 samples in a run. I think it's 12, actually, where you're helping people to move from with a machine the size of an espresso machine to be able to automate work that used to have to be done by hand. Whereas the QiAsprint is at the other extreme of the market where you're doing about 190 samples of a similar type at the same time. QIAsymphony Connect, like you brought up earlier, this has been optimized even more for liquid biopsy applications, but that's primarily a clinical market, even though you have some research customers for Symphony. That's kind of the split of the markets.
Remember, in terms of growth going forward, the Parse sales next year, $40 million, will come on top of the sample prep. That is probably a good two percentage points of growth for the group, even more for our sample prep number. These instruments will start to kick in in the second half of 2026 in terms of incremental growth.
Okay. Got it. Maybe pivoting over to QuantiFERON, obviously been a great part of the story, pretty durable, double-digit grower. I know you guys have a next-gen testing there as well. If we can start with that as next-gen business, does that open up more of the market? Obviously, it's coming from. Skin test is ongoing and still a big opportunity. Maybe talk about the next-gen test and then we can dive in a little bit on QuantiFERON.
Yeah. Let me frame it a bit because I do think, as you said, QuantiFERON is clearly a wonderful business for us for many, many years. I still recall getting hammered, how could you pay $300 million for the business in 2012 if it only delivers $20 million in revenues? In the meantime, I think we have now $2.5 billion in cumulative revenues, which is a nice margin. Clearly a success story. I do think, and you pointed to that, Patrick, I do think the number one message is still 60% of the overall market is not converted. 60% is still a literally 120-year-old skin test. Even that 60% business is still going 4%. If we go with our agro business, let's say, doubled, we barely convert in the existing market share. I think that describes nicely the opportunity we're having.
We see clearly more and more areas, government, states starting this mandatory testing, might for healthcare workers, might be for legal immunization. There is a lot of opportunities where we can still gain momentum. What we are doing right now with fifth generation is improving the workflows, the automation support, because as you said correctly, volume is still increasing, and therefore customers clearly want to have a better integrated. We are trying to address because at the end of the day, it is still a lot of volume what customers have to move. There are still preferred valves you have to operate. If you can make that less hands-on and/or hands-free or more hands-free, it is seen as an advantage.
A few pieces to dive in there. I mean, in terms of the immigration side here in the U.S., there's obviously been some noise there on the border side. Has that changed the business much in terms of that opportunity? I know it tends to go in a little bit of waves with the immigration side.
Yeah. Just again, being European, staying outside geopolitics here. Again, when we're talking about immigration, we always talk typically legal immigration, right? So it's really, if you apply for a visa in the U.S. or whatever, you do have to go. That goes from students to workers. It is a global business for us. I do not think that any change in the U.S. so far has affected our business either way. Actually, sometimes it is the other way around, people going a different direction.
You guys have out that long-term target. I think it's the $600 million for QuantiFERON. You've been outgrowing it with the double-digit growth. What's the right way to think about this longer-term opportunity? How durable is this? Every time you guys put out LRPs, it's always slowed down, but it really hasn't. What's the right thought process around the durability of the growth here?
Yeah. As you know, our CAGR for until 2028 was 7% CAGR. So we're clearly doing better than that right now, and we would like to continue with that. Nevertheless, I think, of course, as the overall number gets bigger, it's not getting easier to achieve the double-digit growth rate. Nevertheless, if you look from today's perspective, I do think it looks like that they're going to beat the $600 million. I think that is one of the areas where we probably do better, similar to Qiagen, QIAstat-Dx and others. So I would say we feel quite comfortable. Again, by definition, it will never stay always double-digit. Also, for example, the fourth quarter right now had a tough comparison last year because Q4 last year was quite strong. Overall, we still feel good about the business.
The main reason is, again, 60% of the business is a literally 120-year-old skin test.
Yep. The biggest thing is the competitive landscape. It comes up at times. So far, it's been quiet. Even coming off that most recent update from a large competitor people are worried about, it does not seem like there's a whole lot there. I guess, what's the latest on the competitive side? How confident are you guys in your position? What would it mean if a large competitor did come out with a test? What would the timing be?
That's a pretty good question from another company. Again, what we see is more or less what I described before. We're doing quite well. We're working with our customers. I think we entered into many, many long-term multiple-year contracts. By the way, most of them actually with increased prices. I would say it also speaks for the quality and the workflow of our solution. Yeah, we always have seen that rumors affect our competitive situation. Again, what we shouldn't forget, it is competitive from the beginning. Other companies like Revity, as I find Oxford, are in the market since ever.
They haven't really outperformed Qiagen, to say the least, right? We have seen our French partners, competitors, are in the market for many, many years. Sometimes they had to take it off the market. Now they're back in the market. They haven't gained momentum either. Again, we are watching that market environment. As I said, number one competition for us is literally a 120-year-old HomePro test.
Maybe last one on QuantiFERON, just the Lyme program. What's the latest on that? What should we be thinking about in terms of timelines and expectations?
On Lyme, the CTES team, we're working with our partners, DiaSorin, who is our exclusive partner to work with on the QuantiFERON technology platform. They're responsible for the submission with the FDA. They're the ones who are working on that for us. We're an OEM partner. We're supplying components to them for the test. It's not a revenue driver for us as part of our 2020 HREs. We're longer term for the QuantiFERON franchise. It's a nice related growth. We'll see how the FDA responds to the certain submission here.
Maybe the next growth driver would be QIAstat-Dx. Been a nice story as well. Obviously placed a good amount during COVID. The question was, can you continue to expand the menu? It's a relatively crowded market. You guys have obviously done pretty well on that front. Maybe just an update there. The placement numbers continue to look good. You expanded. I think you got four FDA approvals recently. Maybe let's talk about the evolution there and expectations on QIAstat-Dx.
Yeah. Let me kick it off, and then I can add a bit more on the future launches. As you said correctly, it's clearly a significant double-digit growth for us. As I said, probably also one of the areas where we are well ahead of our 2028 targets. I don't think that it's going to change. As we traditionally said, if we place more than 150 placements in a quarter, in a given quarter, we had a good quarter. I think it's fair to say as of today, Q1 was a very good quarter. Q2 was a very good quarter. Q3 was a very good quarter. I'm quite sure I will say the same for Q4 when we talk about it in January. Placements are going quite well.
What of course is also being very helpful for us is what you described before, that we are still continuing and expanding our menu. The big step forward for us was clearly the four FDA approvals we got, in particular on gastro and meningitis, because now we can offer the full menu in the US market, which opens up to go for the tender business, which is an important step. Fortunately, unfortunately, tender business always means it is multiple-year business. You can probably apply only to one sort of the tenders every year because it needs more time until others are opening up. That also shows that we rather should expect a continuation of a double-digit growth rate for some time because we can just, again, add here as well. At the same time, we are also not standing still on expanding our menu.
Correct. What we still aim to achieve this year is to submit in blood culture identification, both in the EU and in the US. For next year, we will have a complicated organ tract infection panel that we will submit in the European Union and in the US. Do not forget that QIAstat-Dx also offers something unique, which is amplification curves and CT value calculation. We get that increasing traction also in the area of companion diagnostics. As you know, we signed a couple of branch agreements with AstraZeneca and NME. This is also a nice area of how we think of growing the QIAstat-Dx franchise further in the middle. In terms of the menu side, what are the biggest opportunities for you guys going forward?
Are there certain menu pieces, that panels, that the feedback is you need to get these one or two, and then you really see even more of a takeoff after you guys have the core ones? When you look at the menu, are there a few that you're really focused on over the next few years that are important to get on board?
As I said, I don't think we have more or less the must-haves we have now. We continue to work with the pharma partners on companion diagnostic because, again, if these are products you get approved, they're not necessarily big in numbers, but clearly big in value, right? The reimbursement for some of them is significantly different. Therefore, also quite profitable. Nevertheless, we should have in mind that there is still a lot of greenfield opportunities, right? Sometimes I hear you believe that there is a penetrative market. That's absolutely not true for the decentralized solutions. We see that in the number of placements we're having. If I also just look on the pipeline moving into next year, I would say it was never as good.
I would say overall, the combination of rolling out the machines to still new customer segments, having also now a good number of customers who want to have bigger machines, as you know, we launched the OptiViewer machine because there are customers who now have a fourth and fifth QIAstat-Dx machine. We want to have an optimized machine as well. I do think there are opportunities for us, which continue to grow.
Okay. We can shift over to QIAcuity. Another interesting growth vertical for you guys. Consumables doing well. Another one where instruments may be a little bit pressured. How do you think about the dynamic between the two? What loosens up on the instrument side? What have you seen there? Obviously, it was a competitive market. You guys have done quite well relative to the competitors.
QIAcuity is our system for digital PCR. This is the next generation of the standard technology you find in every laboratory. What we're working on with digital PCR is that we are working in primarily the aggregating and farming environment right now to bring this technology that can do things that PCR cannot do. In particular, areas that you talked about earlier, like removing residual disease testing, liquid biopsy analysis work, this is where digital PCR can have significant advantages over other technologies. We're now in the process of releasing the clinical environment as well, primarily in mycology and infectious disease testing, which is the two primary applications we see there. We're in the very early in the exhibit game there, maybe just starting to warm the pitches for the clinical market.
What we see is an environment right now in the research environment where the funding environment makes it very difficult to pay for funding.
Sorry.
Yeah. We are in training. That is what is causing us to seem to slow down in the demand for the system. Consumables continue to do very well. The instrument placements are the low point of interest that we are seeing right now in this year. Even though we are doing better, we see it as a competition.
Yeah. I guess in a clinical market.
The challenge right now is trying to drive people from PCR because PCR can provide so much more information with a higher level of precision at a slightly higher price.
For me.
As a research market.
The opportunity in areas you mentioned, liquid biopsy, MRD. I mean, how easily can that be transitioned? Obviously, historically, it's been a little more sequencing-based and tied to that. I mean, how easy is it to transition for some of those customers? How real is that opportunity? What's the right way to frame that?
Most probably advantages digital PCR is what costs and what is time, right? If you look on sequencing, sequencing still needs days and weeks, right? They run fully loaded scans of thousands, where in digital PCR, you can do literally in hours and for hundreds of dollars. I would say these two simple advantages do not move away, but rather getting more and more important. That is the reason why even in a more difficult environment right now, we do quite well with pharma companies, right? Because it is not a big topic for them if they do certain developments. I am quite optimistic that once we see it overall, I would say a more stable funding environment for other areas for the digital environment, digital PCR.
On the instrument side, is it just budgets loosening up? What are you guys hearing on that front? What would cause maybe the instrument side to loosen up a little bit?
Like you said, it's about the budgets. The issue is in terms of capital investments in the systems right now is very constrained in the markets on the research side. What we see in terms of competition, we can easily remain with the 8 out of 10 head-to-head competitions, even though there's a lot of significant opportunities for this type of system out there.
Yeah. Okay. The competitive side, feels like you guys are holding serve at a minimum, but what's the conversation in the market? What is your expectation in terms of what the share shift is looking like?
I think the best clue is always looking at numbers, right? If you see what we are releasing every quarter, we are growing the business. I'm not sure that you're hearing it from many other companies right now as well. If you do the math, it probably means that we're gaining some market share. We clearly also believe that we pushed forward quite nicely our menu expansion. As you know, we are adding more or less 100 different panels year over year. We will do the same thing as well. I think the combination of still positive instrumentation placements plus building out our menu as we speak will help us to also gain future market share going forward.
Yeah. And then maybe with QDI, I think it's the last pillar, $100 million business analysis and acquisition kind of tucked in there. Can you talk about both the acquisition with the core business, what you're seeing in there, and the expectations for QDI?
I can talk about genetics a bit, but I think from my perspective, as I said, it's a $100 million business, nice margin profile, which is always helpful. I do think what is really good for us is that we now move through this transition into a SaaS kind of business. As you know, when we started the business, it was very much a license modeling. The pharma companies bought three, sometimes even five-year license agreements, a couple of hundred thousand dollars. It was a bit more lumpy. Now there's an ongoing transition into the SaaS kind of business. Clearly has a one-time revenue impact because you can't recognize it upfront, but you do rather now in the quarterly installments. Again, we are moving through that.
Genoox helps us quite a lot with certain customer segments, which is rather smaller customers, meaning they have a nice front-end solution, which is quite attractive for smaller-scale customers as well.
Earlier this year, we bought a company called Genoox out of Tel Aviv that operates a business platform called Franklin. This is a very nice application, especially for hereditary disease analysis in the clinical environment, that's helping us to grow. If you look at our bioinformatics business that we've built over the last decade, about 60% of the sales are targeting research-type applications, whereas about 40% are in discovery, sorry, in clinical. The clinical side of the business is starting to really grow at a nice double-digit rate. That is where the Genoox application will help us to be able to reach a lot of smaller, medium-sized labs that want to be able to do their own genomic data analysis.
Okay. Roland, you mentioned kind of the SaaS transition. Where are we in that piece? Where can that get to over the next few years? Is there any shift on the economics? What's the right way to think about that piece?
Again, because of SaaS transition, we are also looking very much on order income. I think that's still a quite stable number. I would assume that that business also next year is probably a low double-digit core opportunity for us despite that ongoing transition. If that normalized over time, we are probably a bit more than halfway through. I think it has even some upside potentials. I would say, given the transition still being somewhat double-digit core, it's quite okay for us.
Maybe on some of the numbers, 4Q, you guys obviously gave that guidance a few weeks ago. You baked in some impact. I think there's a little bit of a step down due to the government shutdown. I guess now that the shutdown's over, how did that track relative to the expectations? What did you guys bake in versus what we saw on that front?
No, I think it's a fair comment. I think we clearly gave an apples-to-apples growth expectation for the first quarter of 2%. That was clearly driven by the fact that we still had a shutdown, right? Yes, the shutdown is over. I'm not 100% sure that that means that things are back to normal because we still don't have an approved budget. It might be as early as January next year. While we always had a quite normal consumer business, I don't think that is going to change. I'm a bit more reluctant to believe that just because you don't have a shutdown, people are going to spend on the instrumentation side.
Because I do think to do long-term investments, which instruments typically are, you also have to have some confidence that you have a budget the year after because you might have to invest into an incremental operator. You might have to invest into an incremental consumable stream. Therefore, you need, I think, a certain confidence. I would say it's good news that the shutdown is over for a lot of reasons, but I'm not sure that that releases a lot of incremental instrument placements in the short term.
Yeah. Okay. Looking ahead to 2026, Thierry gave some high-level commentary, of course, not formal guidance by any means, but it sounded like mid-single-digit growth on the table if conditions remain the same. Obviously, some variables out there. I guess when you look at next year in terms of just the variables that could play into the year, how do you think about the key things that you're keeping an eye on as we head into, again, the formal guidance to start the year?
I think we are overall quite optimistic for next year. There is clearly some volatility ongoing. If you talked about China, again, we just talked about the NIH budget situation in the U.S. We hope that we have some more clarity, particularly on the later one, sooner than later. Nevertheless, I think we did hopefully the right thing by moving into this year that we rather took out a more careful guidance for the first quarter. We were able to beat that and then again delivered and over-delivered and increased, I think, now three times our guidance. I think that is a better way than the way around. I think there is a kind of philosophy we would like to continue with.
Sure. Obviously, given the CFO talks of margins, it's been a good story. I mean, you guys have executed well on the margin front, had some tariff impact here into year-end and into next year. When you think about, again, those moving pieces heading into 2026 on the margin front, you guys are tracking, you have been tracking well ahead of the LRP for some time. What are the things you're looking at on the margin front? I assume tariffs are one of them, but yeah, why don't you talk a bit about the risk?
Yeah. No, I think it's also a fair observation that we improved our margins already quite nicely over the last more or less three years. I do think it's also fair to state that we do believe that we will continue our margin development going forward. As you might recall, we have right now a midterm plan out there, which calls for an EBIT margin of at least 31% in 2028. I think we have been, and we still are, quite vocal that we are going to update that number and that we will increase that number because we do believe that that is easily doable for us. If you now look into next year, we clearly have to observe a couple of facts. We just did a small acquisition, as we said on pass, which probably will have a 100 basis points headwind in terms of margin.
Also, currency as of today is probably not a positive factor for us, but rather also 50 basis points headwind as well, plus some tariffs headwind as well. Nevertheless, I think if I look as of today into next year, I would assume that we have enough optimization room that we overall have the margin at least on the same level as this year. There might be upside potentials, as I said, we will give formal guidance early next year. Afterwards, meaning in 2025 and 2028, we believe we still can nicely increase our margins beyond that levels. Let me give you a couple of examples. First and foremost, we still will see better utilization for our QIAstat-Dx production equipment. As you know, we built out that production environment during COVID.
There is still a significant underutilization, just a better utilization with a business which right now, as you know, is growing 10-15%, will decrease standard costing, therefore improve our margins. In general, we are also growing in the product areas faster where we have higher gross margins. The mix is also positive developing for us. I would say on the R&D side, we feel comfortable around 9% of revenues going to R&D as a mix between in and output. At the same time, we see quite some leverage opportunities on the SG&A side. Digitization in our industry is still going on. We have more and more revenues coming to us through digital channels. We are also looking into smaller footprint benefits. I would say there is a good pathway for us to improve our margins also all the way up to 2028 on a very regular basis.
Okay. That's really helpful. Maybe in the last minute here, just the capital allocation. I've seen you talked to Citi. You talked about the share repo. Is there still capacity to do more deals, share repurchases? What's the current?
Yes. We did $300 million last year. We did $300 million this year. We are going to do, or we are just announced to do, $500 million early next year. I'm quite sure that we will ask the AGM next year that we do more because we feel we have a very solid cash flow generation. We clearly right now have opportunities to also work on our leverage. I do think we should expect a fair mix between bolt-on acquisitions and share allocations. As you know, we also started this year to pay a dividend. For sure, the board is going to review if that is something which they should increase or not. I would say we feel very comfortable with the cash generation of QIAGEN. Therefore, we should have opportunities to optimize our capital structures as well.