Good morning and welcome to the Bio-Techne Earnings Conference Call for the Second Quarter of Fiscal Year 2021. At this time, all participants have been placed in a listen-only mode. And the call will be open for questions following management’s prepared remarks. During our Q&A session, please limit yourself to one question and a follow-up. I would now like to turn the call over to David Clair, Bio-Techne's Senior Director, Investor Relations and Corporate Development.

Good morning and thank you for joining us. On the call with me this morning are Chuck Kummeth, Chief Executive Officer; and Jim Hippel, Chief Financial Officer of Bio-Techne. Before we begin, let me briefly cover our Safe Harbor Statement. Some of the comments made during this conference call may be considered forward-looking statements, including beliefs and expectations about the company's future results as well as the potential impact of the COVID-19 pandemic on our operations and financial results. The company's 10-K for fiscal year 2020 identifies certain factors that could cause the company's actual results to differ materially from those projected in the forward-looking statements made during this call. The company does not undertake to update any forward-looking statements as a result of any new information or future events or developments. The 10-K as well as the company's other SEC filings are available on the company's website within its Investor Relations section. During the call, non-GAAP financial measures may be used to provide information pertinent to ongoing business performance. Tables reconciling these measures to most comparable GAAP measures are available in the company's press release issued earlier this morning on the Bio-Techne Corporation website at www.bio-techne.com. I will now turn the call over to Chuck.

Thanks Dave and good morning everyone. Thank you for joining us for our second quarter conference call. Hoping you and your families have remained safe as we get closer to turning the corner on this horrible pandemic. The Bio-Techne team delivered another strong quarter accelerating our organic growth year-over-year to 19% building on the strength we experienced last quarter. In fact our 19% organic growth rate represents our strongest performance since I joined the company in 2013. This growth was broad based across our segments and geographies as our print annotation [ph] in biopharma continue to be red hot. And even academia returned to double-digit growth. The new normal of social distancing and staggered shifts has become an accelerant for the continued adoption of several of our technologies namely Simple Plex and Simple Western. I will dive into the specifics of each of these platforms later but they are all gaining traction or remain in the early innings of penetrating their large respective markets. We delivered this record organic growth with a continued focus on profitability as our adjusted operating margin improved 530 basis points year-over-year to 38.7%. Some of this improvement reflects the timing of hiring investments to drive future growth but shows a leverage in profitability inherent in our business model. The COVID pandemic continues impact traditional ways researchers are staffing labs and conducting experiments as well as the ways we are interacting with these customers. But I'm encouraged with the innovative solutions researchers have leveraged to push science further and the innovative strategies our commercial teams have implemented to meet their evolving needs in these challenging times. Academia in particular is getting better at managing through the COVID related restrictions and we're encouraged with the sequential improvement we experienced in this end market. While we experienced robust…

Thanks, Chuck. I will provide an overview of our Q2 fiscal 2021 financial performance for the total company, provide some additional color on the performance of each of our segments, and give some thoughts on the remainder of our fiscal 2021. Starting with the overall second quarter financial performance adjusted EPS was $1.62 versus $1.08 one year ago, an increase of 50% over last year representing a new company record. Foreign exchange positively impacted EPS by $0.08. GAAP EPS for the quarter was a $1.15 compared to $3.02 in the prior year, representing a 62% decrease. Our GAAP EPS results in the second quarter of last year benefited from a favorable realized and unrealized gain on our investment in ChemoCentryx. Q2 revenue was 224.3 million, an increase of 21% year-over-year on a reported basis and 19% on an organic basis for exchange. Foreign exchange translation had a favorable 2% impact on our revenue. Our strong growth in Q2 was fairly consistent across the globe, ranging from the high teens in the U.S. to 25% organic growth in China. By end market biopharma growth was very strong at over 20% and it was nice to see Academia continue to improve grow in the low teens during the second quarter. Moving on to the details of the P&L, total company adjusted gross margin was 71.5% in the quarter compared to 70.6% in the prior year. The increase was primarily driven by favorable volume leverage. Adjusted SG&A in Q2 was 25.2% of revenue, a 310 basis point decrease compared to the prior year and R&D expense in Q2 was 7.5% of revenue, 140 basis points lower than the prior year. While our adjusted SG&A and R&D spend both increased sequentially and compared to the prior year, a tight labor market in the life…

[Operator Instructions]. And our first question is from Puneet Souda with SVB. Puneet, please proceed with your question.

Great, thanks and Chuck, congrats on the strong quarter, impressive growth here in protein sciences and across the board. First of all, could you provide sort of the contribution that we're seeing from GMP proteins and cell and gene therapy and sort of how should we think about that for the full year here given the momentum that you're seeing so far?

Yeah sure, well, we're not going to give too much grill in the way of detail. We've been talking about throwing 100%. We've talked in the past of being a $30 million type portfolio with most of it being serious right now. And we're pretty much a run rate on protein's at 10 million and we gave you the growth rates in there. We have the ability to increase capacity -- to increase -- I guess we make here at the headquarters by a factor of four if we need to. So we're good while we take the time to qualify the new site, which is going along really well. Again, we've talked in the past about this 10 million in GMP approach growing to maybe 20 million next year and doubling in after that and then hopefully it really starts ramping once we start getting the production side of the therapeutics as they come out the back-end of clinical. The rest of the portfolio, it's kind of hard to say. We had a great quarter for both acceptance, for both Cloudz and for TCBuster we talked about. We're getting an awful lot of new revenue to get a look at these technologies and new preclinical with so we're pretty excited. The team's pretty excited, the best quarter we had for TCBuster. We're actually working on expanding the site already or making it. So it's a bit of a surprise so far. So it's kind of hard for me to tell you what it is going to be next year, but I think probably double what it is this year and probably double again next year after that. And as we've said in our five year outlook here, in our $1.5 billion goal, we see a $300 million business is what we see. So it'll be consisting of a bunch of components, 150 or so at least in GMP proteins but the rest is sort of between Cloudz, TCBuster, instrumentation, ACD for technologies for spatial cell analysis, Ella testing for QC testing and workflow, all these bits and pieces, roll up to 300. And, we're probably a year away from getting any more real -- doing a real detailed guesses on just what the recipes look like. I think the safest one is a GMP protein base right now.

Got it, that's very helpful. On Ella, this is a really strong quarter again, I think you've pointed that out in the past couple of quarters too. Obviously that product line is gaining significant traction here. Can you give us a sense of where this business could be? I mean, this is competitive ELISA market after all. So where could it be and what are the other key initiatives that you have in including the 510k approval that you're submitting for? And in that same context, if you could just help us understand, I mean, there's quite a bit of momentum right now in proteomics. Obviously, Bio-Techne is core to proteomics. You are one of the leaders across the board in antibodies, proteins, cytokines and broadly across proteomics. So maybe just help us understand where that could -- where this business could be, the protein sciences business overall and the proteomics business could be overall and sort of longer term and five-year timeframe?

Well, it's growing beyond our expectations and clearly we're super well-positioned in proteomics and as the wave of research hits and this golden era keeps growing and in the end, money is siphoned off these stimulus plans for more pandemic relief and pandemic research so it never happens again we're going to be a big beneficiary. We're seeing -- we're really seeing a lift in every part of our business in every geography, it was just astounding. I don't think I've ever seen a more green dashboard so in my career. It's hard to pin down what's COVID and what's just research. Now, we've dug into what's going on with our customers and they're certainly bigger biopharma are investing more, they're taking the cash, the ones -- the vaccine makers are obviously doing more. Companies that are doing well off COVID are taking that cash and doing more R&D. And where there's more R&D and more research, we're benefiting. I've always said that Simple Flex was a sleeper, right and it had for a few years now. And, if it keeps growing at a near 100%, it's going to be really big really soon. So we've now -- we're now well over 500 instruments placed worldwide, which is a lot. This is an amazing machine and it just does a lot for the money. It is just an amazing piece of technology from an amazing team that has worked on it for many years before we acquired the company. I think that was seen by Micropoint early on in China, and we're on track with their clinical and this could be -- that deal alone could be $100 million of revenue in three or four years if they hit their targets. This is a guy that did Mine Ray so…

That’s super helpful Chuck, and thanks for all the details. And if I could squeeze last one in for Jim. Jim, I appreciate the investments into Eminence, and obviously the GMP facility which is delivering growth now. And, when you look at on the acquisitions front in organic growth, we just -- we have not seen much on that end lately. Is it largely a function of the valuations in the space or anything else or a certain specific areas that are sort of more challenging versus attractive and just walk us through your assumptions there because obviously that's an important part of what Bio-Techne has done in the past?

Yeah, what I'd say on the evaluation front is that, the evaluations have been a challenge for many years, if that's really nothing new. It's really the ebbs and flows of the deal flow and what's coming up available and I think for a lot of 2020, probably the pandemic being a good reason why the flow wasn't as strong as it had been in prior years. But in the last several months, we're starting to see that turn around and seen a lot more deal flow, a lot more interesting targets. So, it's hard to predict because there's a lot of stars that need to align but I would predict that we will see more activity by us on that front in the remainder of calendar 2021 we saw last year.

Okay, great. Okay, thanks guys. Congrats.

Thanks Puneet.

And our next question is from Catherine Schulte with Baird. Please proceed with your question.

Hey guys, congrats on the strong quarter and thanks for the question. I guess first, just as you think about the outlook for fiscal 2021, last quarter you talked about maybe a 10% to 15% range for the year. So just curious if you had an updated thought on where you should end up in that range or if we should be thinking about a new range, given the strong performance you saw this quarter?

Sure, I'm not sure who was noted was this morning talking about clearing 15% plus for the year. We've stayed away from that. We certainly were bullish on ending up double-digit again. We left our comments at continuing momentum and the momentum is 15% to half year. And we have the easiest comp ahead of us for the rest of the fiscal year. So you can do the math from that but yeah, we're pretty bullish continuing at the levels we're at or even better to be honest at this point.

Okay. And you've talked about some research labs, perhaps needing to buy a second version of things given social distancing and building out secondary labs. How much of the rebound that you've seen do you think is related to perhaps some of that stocking or build out dynamics?

There is a little bit of stocking. After last quarter and in these below results and we don't have much COVID in our numbers yet. COVID is still coming for us hopefully with serology. We did a big deep dive really globally and what the hell's going on and why are we doing so well and so we did it. We really did an account by account customer by customer breakdown, by segment of how we are doing and why. And there's really no silver bullet. We're up with vaccine makers for obvious reasons. We're up with biopharma for a lot of reasons we talked about, but there's been more OEM work as well. They're all having a pretty good year, so they're outsourcing more so we've had more customer given to us. Academia has been certainly the duplicity issue and some surge comeback and maybe some budget flushing on a multiple fronts to be honest, we discovered some I think not material. It's not like it's half our growth or a third or fourth, but there's a little there. And it's really a sum of the parts is what comes down to for us. So, no silver bullet, it's not all COVID, it's not all anything, but it is a rising tide, really that's just research is doing really well on all fronts for us. We've been -- we're perfectly positioned as Puneet said earlier. I mean, in proteomics, it's just where we are. We're in the right spot right now. And, whether you're buying antibodies to make COVID tests or you need overflow help because, you're stacked with working capacity to develop vaccines or your academic institutions that are staggering. You're building out new labs and you've got to buy more equipment, preferably equipment that has its productivity inclinated like ours, not so expensive. That's kind of where it's all coming from. And in our reagents too it's broad based. Even ELISA, I mean one thing that we can always go back to and just look at our good old ELISA kits, just cute kits, 35 years old and they kind of ebb and flow with projects and kind of health of a project in biopharma with best year in years. So it just kind of speaks to the broad based growth. And we're not the only company talking about it, right. Everyone's riding its wave right now and we just happen to be riding a little higher than most, which is great for us.

Okay. And last one for me, just on the Exo kidney transplant test, you talked about publication in the next few weeks, what's the path forward for that test and how should we think about potential launch timing there?

Yeah. I really was hoping that we'd be talking about that publication by now. It's -- it really is imminent, it's should be days, not weeks, but who knows? The data looks fantastic. If it had been published, we could talk about the data. It's very good data. It's the first peer reviewed article, we need to get a second, we need to do an outcomes test. There's work to be done before we start going after an LDT approach or working with a Mac or get started, but we're on the path and we think we're at a year or less here of getting into early access selling this thing. Probably a good year away from a crosswalk or anything. But, we'll see -- we're also looking at partnerships as well. And, we're also looking at the other Macs, not using the same one we did prostate. So we got a lot going on here. It's just been going very well. That platform is astounding. It works so well, it's amazing. As you know, Exosome we feel is the best in class for liquid biopsy and the data is going to prove it here when you start seeing some of it. And, there it's a big market. There aren't the same kind of barriers like we have with prostate and urologists. We have organ centers and they're not so many of them, so they're not so hard to go after in terms of commercial attack. And, it's a big need. I mean, it's a horrible thing to have to be given a new kidney and then lose it or to damage it through biopsies or testing it as you're worried about rejection. And half of all these are rejected within 10 years. So this is a tool that really has been needed and it's pee in a cup and it can be sent in. It doesn't have to be done with a non-contact with phlebotomist or something. So, we see a lot of upside in the price, the cost first and the price second is going to be I think really good compared to what's out there now.

Okay, great. Thank you.

And our next question is from Alex Nowak with Craig-Hallum. Please proceed with your question.

Great, good morning everyone. So the vaccines are being administered now, more coming in soon. It looks like immunity to a particular variant actually might last pretty long, but then we're seeing new variants that come out to lower the overall efficacy. So I guess my question is how has the vaccine rollout and the emergence of these new variants changed your thinking around this quantitative COVID antibody tests? And then you mentioned it in the prepared remarks for where do you stand with partnering this test with the vaccine companies and then just separately, the diagnostic labs?

Yeah, well as you know, Alex, we've had this test kind of ready to go since late last spring. And, there's been I guess a lot of flutter and cluttered with the FDA and a lot of poor UAS that came out early on unqualitative versions of serology. And, and there's a bit of a hill to climb here for getting accepted. There won't be real demand until there's enough vaccine out there, enough people vaccinated to create that demand where they're calling their doctors to find out how do I find out if I'm immune or not, can I see my grandkids or not? People want to go back to concerts and get on planes and get on trains and be in malls again. And no one's going to feel really good until they know they feel safe. And this is without a variant, this is without a mutation. As you know we're tied at the hip of Mount Sinai and they've got the longest range testing known here on immunity and we're running at like seven or eight months. And they don't see a reduction in immunity with antibodies yet. But, the powers to be there do feel that it'll follow the Corona family and it will be variable with individual but between probably one and two years of immunity, but not forever. If it doesn't mutate, that means a booster, if it mutates then we're kind of looking at a flu every year kind of thing, right. Then we're trying to hit a moving target like flu does, which is harder. All that speaks to the more of a need to have serology. People are going to want to know consistently are they immune. Do not be surprised if in a year or two on your app,…

Thanks, Chuck. That's very helpful. Maybe to expand on the more macro life science funding flush that you're seeing here. So right now, Washington is hashing out the COVID stimulus plan. What specifically are you hearing in that plan that could be funded, that could be deployed for life science research funding and for how long could that benefit lab? And then I guess the same question, but directed more towards China, their plans with the next five-year plan. Are you hearing anything in particular there?

I will start reverse. China's not really good at laying out what they're going to do, but the demon we're looking at, I think the 14th version of a five-year plan, what typically happens is year one is a little bit soft and year two it kicks into high gear. Year five is a bit softer too and we had a bit of we'll call it budget flush over there too, because are also changing some tax consequences there. So I think everybody that had strong instrument results in China, probably we're seeing a little bit of pull forward from that. Haven't seen him much mentioned, but we certainly saw it and we'll admit to it. But I think, it's going to be really good. The next plan for China, I think healthcare is still way behind where they are in other parts of their economy and their industry. And, it's a lagging industry and now more than ever with COVID and they certainly don't want to see a pandemic hit there that people want health care there. I mean life sciences is on the rise still. That's why we continue to see 25% or better growth and, we will for a long time, I think.

I think as far as our government is concerned, whether it ends up being 600 million more or a billion more, or 1.9 billion, there's going to definitely be portions of this that are given as grants and been done for pandemic research and which really is infectious diseases, which there really hasn't been a whole lot of. Most of the NIH is really focused more on oncology neuroscience and different areas like that. I mean, as I've mentioned often, when's the last time you paid more than a dollar for an antibiotic. I mean, if there's -- we're behind in a lot of areas around infections and I think there'll be a lot of overflow in a halo effect from stimuli. I think that's one reason that's the official NIH budget for this year. Now it looks at looking at 3%. I think they're all holding off until they see what's going to really drift out around these stimulus packages into the science community, which I think there'll be some it's hard to quantify. I think there'll be some, if there's not you'll see, you'll see more, more, uh, pressure for the NIH to, to, to get more, I think.

Okay, great. Thanks, Chuck, I appreciate it.

And our next question is from Dan Arias with Stifel. Please proceed with your question.

Good morning guys, thanks. Chuck, on the GMP proteins business, you've talked about pharma customers looking for a provider that can handle some pretty large orders. They're multi-million dollar lots. Do you have some of these in the pipeline or as semi firm commitment at this point? And then when we think about what you're prepared to do in terms of supplying here in initial days with the new facility, what is the plan for scaling up that portfolio, it sounds like the idea is to kind of start off with a couple of key molecules, and then work from there, so I'm just curious what the portfolio expansion ramp looks like and whether that's what you really need in order to sort of drive the acceleration that you've talked about recently?

Sure, well we landed our second and these contracts are -- they started years ago with these guys coming to us and asking, we have been buying proteins from you forever and we buy them in small lots and we're probably a large customer for you at maybe a $0.5 million a year. If we get into cell and gene therapies and we need proteins as part of the workflow, we need something like probably 10 or more million a year, could you do that and back then all we could say was, no, we couldn't. So now fast forward to here, this is more building a factory, even there we've improved our current site and headquarters that we can do probably upwards of about $40 million or so annually of GMP proteins here. So we've done a lot of good jobs and that’s going to fill the gap while we qualify this factory and wait for the large orders, because we're not going to have a large venue, a large catalog here. We're going to have you making far less than 50 different proteins there. We are qualifying on the major runners and you can guess what they are, they start with an IL. And we'll go from there. Both these first two customers have needs of over 10 million a year, and we are in negotiation with at least a half a dozen others. And I won't tell you who, but one of them has a need for $50 million a year. What we've done with these customers, because it's hard for them to give us a forecast, we've talked to way these contract is that we are demanding 95% of their volume. Whatever they ended up needing, it's really an unknown right now, how these things take off, when they come out, what the forecast is going to be, what's the ramp, how do we plan for it? And they know it too. They know it's frustrating for us because how do you prepare? So what we've done is turned our contracting towards we want to see a range, what you need will be there. We don't know when, but we expect 95% of your volume that's contracted. So that's kind of the gist of how we're doing business. And these call them eight customers would swamp us out for a year if they hit their forecast, just these and there's another 50 to 100 after that. So we're not concerned about filling this factory eventually.

Yeah, okay. Okay and then maybe on the epi side, appreciate some of the comments that you made thus far. Leaving aside the dark visit dynamic and just the challenges related to the pandemic, what do you think the things are that the urology community needs to see this year in order to really feel like this is a test that's sort of a must use option rather than a nice to have option, is it additional data in publications, is it being seen by a sales rep now that you've kind of solidified the use case a little bit, I'm curious about what you think at this point, given where we are really kind of fulfills the dream here?

I know your latter comment. I think the utilities, the outcome studies, that's what the large payers are looking more for. And we're probably halfway there and we are very close to landing one of the majors, can't say that we have either but hopefully it's eminent. And when we get warm, we'll get more, but that's what they're looking for is the outcomes, how does it really save money for the industry, right and save more lives. The urologists, we've sold through roughly 2,500 of them and there's about 20,000. So we've got a lot of work to do. And of that 2577% are reordered. So once they're in it, they believe it. I think it really is more of a commercial issue of getting in front of them again and selling. And I think the home kits is still in part of the GAAP and certainly it is helping a lot. We have some great KOLs [ph], we're going to get back and front of NGS here in February for reconsideration, that's going to help quite a bit. I think that'll be a positive story. But I think it's a grind. I think these urologists, like a lot of different specialty doctors, they're hard to convert. I'm sure -- I'm certain a large portion of them enjoy their $1,500 a piece biopsies and know that they're mostly negative and don't care. So it's just the state of the business that we have to grind through them. We have to almost shame them into moving into this methodology because it's better for the patient, even though it's less revenue for them. And the better urologist get it and they're on board and we're converting them. But, it's not going to be a one-year event here.

Yup, understood. Okay, very good. Thanks, Chuck.

Next question is from Jacob Johnson with Stephens. Please proceed with your question.

Hey, thanks. And I'll add my congrats on a really nice quarter. Just Chuck one question on the outlook for this year, and I want to make sure I'm clear on your comment earlier. You're lapping I think a similar organic growth quarter or gain a growth number next quarter, and then obviously much easier comp in the fourth quarter. Is there any reason organic growth shouldn't be at this 19% level, like this quarter or potentially higher at the next couple of quarters?

I'm going to let my esteemed CFO, answer that one for you.

Yeah, hi Jacob. The way we're thinking about the forecast is more about the clear momentum we have in the business and the sequential of that momentum going forward as opposed to year-over-year growth rates cause it gets wonky, especially in Q4 for us with what happened in Q4 last year. So the way we're thinking about it is that the momentum from the absolute revenue perspective, continuing, if history is any guide usually our Q3 and Q4 -- fiscal Q3 and Q4 are slightly higher than our second quarter if nothing else, because there's less holidays within those quarters as they are in November and December timeframe. So that's kind of how we're thinking about it. We think the momentum that we saw -- that the step up in momentum that we saw in absolute terms in Q2 is with us, at least for the rest of this fiscal year. And so that's kind of how we're thinking about the forecast going forward.

Got it. Thanks for that, Jim. And then Chuck you made some interesting comments on TCBuster earlier. It sounds like business development efforts are going well there, can you give us any more details on where that offering stands, maybe how many customers you're working with, any color around that? And then you mentioned the potential to maybe add some capacity. Would that suggest that the opportunity here could be greater than I think that kind of 50 million revenue aspirations you've previously outlined?

I think it's more about the ramp and acceleration to that 50 million. I don't think we know enough yet. The gene editing portion of the workflow is if not the most expensive, not the most valuable part of the workflow. It is a critical part obviously and we'll see. Given the domain of customers is a little over a hundred as you know, and we are certainly working with a couple dozen and we are certainly sold to more than half a dozen, quite a few. And they are coming in bigger chunks. So they get access and do a trial, it's hundreds of thousands of dollars. So, we're in the millions now for revenue with TCBuster. So it's starting to get there. This thing's going to happen. Unfortunately, it's a critical part of a brand new workflow for a cell and gene therapy that's radically different than using viral approaches. So it's kind of next generation. So we've got to kind of grind through getting a half a dozen, two dozen of these guys lined up and get them into their clinical and then get going on it. I think this one really is a J curve for five years from now to the 50, 60, or whatever it ends up being. But, it's going to -- it's also going to probably be growth rates of 50% to 100% starting now for the next two, three years until it grows even faster as it really ramps as these things go into production.

Got it. Thanks for taking the questions.

Our next question is from Patrick Donnelly with Citi. Please proceed with your questions.

Hey guys, thanks for taking the questions. Chuck, maybe just on the ACD side, nice to see that back to growth pre-pandemic, even beyond that. Can you just talk a little -- more color on what you're seeing in that market and expectations going forward again, certainly feels like it's found its footing here and what can we expect over the next few quarters there?

Yeah, I think given the likes of other companies in the domain Nanostring and 10X and others, spatial and they're all helping. They're helping create an industry, right? So we're all working on creating a spatial analysis and there's a big need for spatial analysis in the workflow for all research and proteomics for one as well as other areas. So it really comes down to that. If you need to do down to single cell analysis and you really care about the morphology of your tissue sample, which is precious, this is a great technology. Also other technologies that use antibodies, sometimes you can't find the antibodies or they aren't working well, or they're not producible. Looking for a gene is much more -- it's much more on or off, it's there or not. And so this technology with the Z probe [ph] that could detect and get the signal it's full-proof. So, that's why we're seeing the lift. I think a lot of our softness, couple of years ago, we had to reorganize Europe. Europe is just on fire now, the plans really are definitely working in Europe. Europe is doing great. We had over 20% growth in Europe this quarter. So it's a nice thing to see and our genomics division had a big part of it. We're also seeing good growth across the board in Asia as well, although smaller starting to catch on. And, we've mentioned RNAscope and base scope, they're also growing nicely and our High Plex, our multiplex version is starting to grow. We'll, get an FFP version of the High Plex out here soon that will really be really needed, I think and compete well with what's out there. And then of course, DNA scope is coming at the end of this fiscal year we hope. And, that's another platform. So it's a great pipeline. It's got a lot of legs. Again, we see a $200 million to $300 million division here with this technology in our five-year plan and it keeps growing at the near 30% growth. It's back to a -- it won't take that long.

Yes, no, that's helpful. And then one for Jim, just on the margin side, can you just talk through kind of how we should think about that going forward, including, the Exo impact. I know that Medicare shifted over to accrual based accounting this year. So maybe just the impact of Exo on the margins and expectations as we approach kind of that 40% you've talked about for a little while here.

Yeah. And I think we've shared this last quarter. It's a similar story this quarter, if you exclude Exosome from our results, the total company would have been in the low forties with regards to our adjusted operating margin. So that'll give you some insight as to the dilution impact of Exo currently. With regards to the margin profile, second half versus first half, I mean. The margin performance has far exceeded our expectations, but mainly because we are behind on our investment plan, as I've mentioned even last quarter, right. So, it is absolutely important that we continue to invest in our R&D pipelines and our customer facing and customer service post sale service in order to maintain this momentum. So, we do expect to get caught up on those investments and if we are successful in doing so, our margin profile, we think will be slightly less than the back-half than it is in the front half. It's still very, very strong compared to last year. And ahead of plan of where we thought we'd be at this point in time and track to a total comfy performance of North of 40% in the next couple of years.

Understood. Thanks guys.

And we have reached the end of the question-and-answer session, and I'll now turn the call over to management for any closing remarks.

Well, thanks everyone. It was a record quarter. We enjoyed it. We enjoyed this call. We know they're not all like this. We hope we don't have one of those other kind very soon. And, we look forward to seeing the next quarter and it should be a great second half this year we think. So let's tune in again next quarter, thank you.

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.