Flexsteel Industries, Inc.

First-half 2026 revenue was USD 404.2 million, up 27.3% year over year. Adjusted net profit reached USD 62.5 million, up 23.3% year over year. Group gross profit reached USD 26.7 million, up 48% year over year. Life Science Group revenue was USD 319 million, up 28.8% year over year; adjusted gross profit was USD 185 million, up 46.1%; and adjusted operating profit was USD 94 million, up 102.8%. Life Science Group adjusted gross margin was 57.8%, or 55.4% excluding U.S. tariff refunds, and adjusted operating margin was 29.5%, or 27.1% on the same basis. ProGel revenue was USD 61.1 million, up 34.2%; adjusted gross profit was USD 8.3 million, versus about USD 2.7 million a year earlier; and adjusted EBITDA loss narrowed to USD 6.5 million from USD 16.8 million. Bestzyme revenue was USD 30.4 million, up 7.4%; adjusted gross profit was USD 13 million, up 14%; and adjusted operating loss was USD 1.3 million versus USD 0.6 million last year. Management raised full-year guidance for the Life Science services segment to 25% to 30% revenue growth, adjusted gross margin above 55%, and adjusted operating margin above 25%. ProGel guidance was for revenue growth of 8% to 10% with adjusted gross margin over 43%, and Bestzyme was expected to continue improving toward positive EBITDA in 2027.

Sherry Shao framed the quarter as evidence that Genscript is benefiting from a broader AI-driven shift in life sciences, not just one-off demand. She emphasized that the company is building validation infrastructure for AI biology workflows, with faster turnaround, more automated capacity, and integrated gene-to-protein capabilities. Her tone was confident and strategic, repeatedly describing AIDD as early but structurally important and positioning Genscript as a key infrastructure provider in the value chain.

Phil Zhou highlighted strong operating leverage and margin gains across the group, noting that revenue growth was outpaced by profit growth. He pointed to Life Science Group adjusted gross margin of 57.8% and adjusted operating margin of 29.5%, and said the group’s overall adjusted net profit of USD 62.5 million was a record for any half. On capital allocation, he said first-half capex was USD 484 million, full-year 2026 capex is expected to be approximately USD 130 million, and cash and cash equivalents were about USD 830 million, with working capital and free cash flow improving year over year.

Analysts focused on the upgraded Life Science guidance, asking what was driving the higher outlook and whether AIDD demand could keep surprising to the upside. Management said growth is being driven by stronger AIDD demand, customer base expansion, and returns from years of automation and digital investment, and said the AIDD opportunity still appears early with signs such as larger orders and more recurring work. Questions also centered on competition and whether rivals like Twist were limiting pricing or share; management argued Genscript competes on speed, data quality, and value per delivered item, and said its model provides faster turnaround and lower variability. Another thread was capital intensity: management said capex will stay disciplined, cash is strong, and they see no need for additional financing.