QuidelOrtho CorpQDEL
QuidelOrtho Corp Revenue Disclosure
Revenue
Contract Balances
Timing of revenue recognition may differ from timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing a customer (a “contract asset”). Contract assets are included within Prepaid expenses and other current assets in the Company’s Consolidated Balance Sheets and are transferred to accounts receivable when the right to payment becomes unconditional.
The contract asset balance consisted of contractual arrangements with certain customers under which the Company invoices the customers based on reportable results generated by its reagents; however, control of the goods transfers to the customers upon shipment or delivery of the products, as determined under the terms of the contract. Using the expected value method, the Company estimates the number of reagents that will generate a reportable result. The Company records the revenue upon shipment and an associated contract asset, and relieves the contract asset upon completion of the invoicing. The balance of the
contract asset related to these arrangements was $34.7 million and $32.5 million as of December 28, 2025 and December 29, 2024, respectively.
The Company reviews contract assets for expected credit losses resulting from the collectability of customer accounts. Expected losses are established based on historical losses, customer mix and credit policies, current economic conditions in customers’ country or industry, and expectations associated with reasonable and supportable forecasts. No credit losses related to contract assets were recognized during fiscal years ended 2025 and 2024.
The Company recognizes a contract liability when a customer pays an invoice prior to the Company transferring control of the goods or services (“contract liabilities”). The Company’s contract liabilities consist of deferred revenue primarily related to customer service contracts. The Company classifies deferred revenue as current or non-current based on the timing of the transfer of control or performance of the service. The balance of the Company’s current deferred revenue was $37.8 million and $33.5 million as of December 28, 2025 and December 29, 2024, respectively, and was included in Other current liabilities in the Consolidated Balance Sheets. The Company has one arrangement with a customer where the revenue is expected to be recognized beyond one year. The balance of the deferred revenue included in long-term liabilities was $16.9 million and $17.3 million as of December 28, 2025 and December 29, 2024, respectively, and was included in Other liabilities in the Consolidated Balance Sheets. The amount of deferred revenue as of December 29, 2024 that was recorded in Total revenues during fiscal year ended 2025 was $30.0 million. The amount of deferred revenue as of December 31, 2023 that was recorded in Total revenues during fiscal year ended 2024 was $34.0 million.
Joint Business with Grifols
The Company has the Joint Business between Ortho and Grifols, under which Ortho and Grifols agreed to pursue a collaboration relating to Ortho’s Hepatitis and HIV diagnostics business. The governance of the Joint Business is shared through a supervisory board made up of equal representation by Ortho and Grifols, which is responsible for all significant decisions relating to the Joint Business that are not exclusively assigned to either Ortho or Grifols, as defined in the Joint Business agreement. The Company’s portion of the pre-tax net profit shared under the Joint Business was $30.9 million, $29.5 million and $47.3 million during fiscal years ended 2025, 2024 and 2023, respectively. These amounts included the Company’s portion of the pre-tax net profit of $10.7 million, $21.1 million and $21.4 million during fiscal years ended 2025, 2024 and 2023, respectively, on sales transactions with third parties where the Company is the principal. The Company recognized revenues, cost of sales, excluding amortization of intangibles, and operating expenses, on a gross basis on these sales transactions in their respective lines in the Consolidated Statements of Loss. The Company’s portion of the pre-tax net profit also included revenue from collaboration and royalty agreements of $20.2 million, $8.4 million and $26.0 million during fiscal years ended 2025, 2024 and 2023, respectively, which is presented on a net basis within Total revenues.
In December 2025, the Company and Grifols initiated discussions to terminate the Joint Business arrangement prior to its scheduled expiration date in 2039. Accordingly, the Company recorded a charge of $65.0 million payable to Grifols over a three-year period in Other operating expenses in the Consolidated Financial Statements for fiscal year ended 2025 to reflect the mutually agreed terms in principle. While the Company continues to engage in discussions with Grifols and additional information may become available as discussions progress, it is reasonably possible that the ultimate resolution of the termination may differ from the estimated amount accrued, and such an amount could be material to the Consolidated Financial Statements.
Disaggregation of Revenue
The following table summarizes Total revenues by business unit:
| Fiscal Year Ended | |||||||||||||||||
| (In millions) | 2025 | 2024 (1) | 2023 (1) | ||||||||||||||
| Labs | $ | 1,505.7 | $ | 1,427.2 | $ | 1,425.8 | |||||||||||
Immunohematology (2) | 543.8 | 522.0 | 512.0 | ||||||||||||||
Donor Screening (2) | 52.6 | 115.1 | 135.9 | ||||||||||||||
| Point of Care | 601.6 | 694.6 | 892.4 | ||||||||||||||
| Molecular Diagnostics | 26.5 | 24.0 | 31.7 | ||||||||||||||
| Total revenues | $ | 2,730.2 | $ | 2,782.9 | $ | 2,997.8 | |||||||||||
(1) Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
(2) As a result of the wind-down of the U.S. donor screening portfolio, the Transfusion Medicine business unit is shown in its two product categories: Immunohematology and Donor Screening.
Concentration of Revenue and Credit Risk
For both fiscal years ended 2025 and 2024, one customer represented 11% of Total revenues in the North America segment. For fiscal year ended 2023, no customer individually accounted for more than 10% of Total revenues.
Revenue related to the Company’s respiratory products accounted for approximately 15%, 18% and 24% of Total revenues for fiscal years ended 2025, 2024 and 2023, respectively.
As of December 28, 2025, no customers had a balance due in excess of 10% of Accounts receivable, net. As of December 29, 2024, customers with a balance due in excess of 10% of Accounts receivable, net totaled $33.7 million.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.