Earnings call transcript: Bruker Q3 2025 beats EPS forecast but stock dips

Bruker Corporation reported a stronger-than-expected earnings per share (EPS) of $0.45 for Q3 2025, surpassing analyst predictions of $0.33 by 36.36%. Despite this earnings beat, the company’s stock fell 2.05% in pre-market trading to $38.25. The decline suggests investor concerns over other financial metrics and market conditions.

Key Takeaways

• Bruker exceeded EPS expectations with a surprise of 36.36%.
• Revenue slightly beat forecasts but showed a year-over-year decline.
• Stock dropped 2.05% in pre-market despite positive earnings.
• New product launches in spatial biology signal future growth.
• Cost-saving initiatives are underway, targeting significant savings by 2026.

Company Performance

Bruker demonstrated resilience in Q3 2025, achieving an EPS of $0.45 despite a challenging market environment. The company reported revenues of $860.5 million, a slight beat against forecasts but a 0.5% decrease year-over-year. The decline in organic revenue by 4.5% and a reduction in the non-GAAP operating margin highlight ongoing challenges.

Financial Highlights

• Revenue: $860.5 million, a 0.5% decrease year-over-year.
• Earnings per share: $0.45, a 25% decrease from Q3 2024.
• Non-GAAP operating margin: 12.3%, down 260 basis points YoY.

Earnings vs. Forecast

Bruker’s EPS of $0.45 exceeded the forecast of $0.33 by 36.36%, marking a significant positive surprise. This performance contrasts with the prior year’s EPS, which was higher by 25%, indicating some operational challenges.

Market Reaction

Despite the positive earnings surprise, Bruker’s stock fell 2.05% in pre-market trading. The current price of $38.25 is closer to its 52-week low, reflecting a bearish sentiment. The stock’s decline suggests investor concerns over the company’s revenue decline and restructuring costs.

Outlook & Guidance

Looking ahead, Bruker has set a full-year 2025 revenue guidance of $3.41 billion to $3.44 billion, with non-GAAP EPS projected between $1.85 and $1.90. The company expects partial recovery in fiscal 2026, targeting double-digit EPS growth and significant margin expansion.

Executive Commentary

CEO Frank Laukien highlighted, "We expect significant improvements in our organic revenue performance compared to our meaningful organic decline in 2025." CFO Gerald Herman added, "We are fully committed to significant margin expansion and double-digit EPS growth in fiscal year 2026."

Risks and Challenges

• Organic revenue decline presents a challenge for sustained growth.
• Decreased operating margins could pressure profitability.
• Restructuring charges may impact short-term financials.
• Market conditions, particularly in biopharma, remain uncertain.
• Geopolitical factors, such as China’s economic stimulus, could influence performance.

Q&A

During the earnings call, analysts questioned the sustainability of positive order momentum, particularly in Europe, and the impact of cost-saving initiatives. The management expressed cautious optimism about Q4 trends and highlighted ongoing investments in efficient drug discovery tools.

Full transcript - Bruker Corporation (BRKR) Q3 2025:

Conference Operator: Good day, and welcome to the Bruker Corporation Third Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Also, please limit yourself to one question and one follow-up. Please note this event is being recorded. I would now like to turn the conference over to Joe Costa, Director of Bruker Investor Relations. Please go ahead.

Joe Costa, Director of Investor Relations, Bruker Corporation: Good morning. I would like to welcome everyone to Bruker Corporation’s Third Quarter 2025 Earnings Conference Call. My name is Joe Costa, and I am the Director of Bruker Investor Relations. Joining me on today’s call are our President and CEO, Frank Laukien, and our EVP and CFO, Gerald Herman. In addition to the earnings release we issued earlier today, during today’s conference call, we will be referencing a slide presentation that can be downloaded from the Events and Presentations section of Bruker’s Investor Relations website. During today’s call, we will be highlighting non-GAAP financial information. Reconciliations of our non-GAAP to GAAP financial measures are included in our earnings release and are posted on our website at irbruker.com. Before we begin, I would like to reference Bruker’s Safe Harbor Statement, which is shown on slide two of the presentation.

During this conference call, we will make forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to acquisitions, geopolitical risks, tariffs, foreign currency, market demand, or supply chains. The company’s actual results may differ materially from such statements. Factors that might cause such differences include, but are not limited to, those discussed in today’s earnings release and in our Form 10-K for the period ending December 31st, 2024, as updated by our other SEC filings, which are available on our website and on the SEC’s website. Also, please note that the following information is based on current business conditions and on our outlook as of today, November 3rd, 2025.

We do not intend to update our forward-looking statements based on new information, future events, or for other reasons except as may be required by law prior to the release of our fourth quarter and full year 2025 financial results expected in February 2026. You should not rely on these forward-looking statements as necessarily representing our views or outlook as of any date after today. We will begin today’s call with Frank providing an overview of our business progress. Gerald will then cover the financials for the third quarter of 2025 in more detail and share our updated full year 2025 financial outlook. Now, I’d like to turn the call over to Bruker’s CEO, Frank Laukien.

Frank Laukien, President and CEO, Bruker Corporation: Thank you, Joe. Good morning, everyone, and thank you for joining us on today’s Third Quarter 2025 earnings call. As forecasted, our third quarter revenues and earnings were down year over year, primarily due to weaker academic and research instruments demand in the first half of 2025. However, our Q3 2025 performance was quite a bit better than expected and represents a meaningful sequential step up from our Q2 performance. In this third quarter, we were encouraged by our mid-single digit % organic bookings growth. For the first time this year, we saw strength in bookings in the academic government market segment, as well as improving biopharma and applied market orders. Interestingly, in Q3 of 2025, we saw the stark contrast of a double-digit % organic revenue decline in the ACAGAV markets year over year compared to a double-digit % organic improvement in ACAGAV bookings year over year.

In fact, our ACAGAV orders grew in the high teens % in Q3 2025, as very robust order growth outside of the U.S. more than offset a continued year-over-year softness in the U.S. A lot of moving pieces. Anyway, notably, our innovative spatial biology, proteomics, and multi-omics solutions launched at AGBT, AACR, and ASMS earlier this year are being very well received by our biopharma and academic customers and enhance our leadership in enabling tools for drug discovery and disease biology research in the post-genomic era. Biopharma and applied also saw organic bookings growth in Q3, with biopharma having the strongest organic order growth of all of our end markets, both in Q3 and year to date.

Organic scientific instruments orders in China increased by double-digit % in the third quarter year over year, and we saw what may be green shoots of stimulus funding in China beginning to be dispersed. This stronger Q3 2025 order performance drove our scientific instruments segment book-to-bill ratio to greater than 1.0X, greater than 1.0 for the first time in several quarters. While one quarter of improved orders is too early to call a trend, we are encouraged that our two divisions most directly tied to macroeconomic factors, which happens to be Bruker Optics and AXS, also saw strong bookings in Q3 of 2025. These two divisions often serve as a leading indicator within Bruker for changing macro market trends.

However, due to the late timing of Q3 orders and certain customer site delays, we are reducing our organic revenue growth expectations for the fourth quarter and our guidance for the full year. This also de-risks our implied fourth quarter forecast to levels that we are very confident we can achieve. Finally, on this slide, our major cost savings initiatives announced last quarter are progressing very well towards the high end of our $100 million-$120 million cost down targets for 2026, and they are expected to deliver significant margin expansion and double-digit EPS growth in 2026. All right, turning to slide four now. In Q3 2025, continued softness in ACAGAV revenues led to year-over-year declines throughout the P&L. However, we noted sequential improvements in biopharma, microbiology, and diagnostic revenues, which led to both top and bottom line coming in better than our expectations in early August.

Bruker’s Q3 2025 reported revenues decreased 0.5% to $860.5 million, which included a currency tailwind of 2.9%. On an organic basis, revenues decreased 4.5%, which included a 5.4% organic decline in scientific instruments and 6.9% organic growth at BEST net of intercompany eliminations. Revenue growth from acquisitions added 1.1%. Our third quarter 2025 non-GAAP operating margin was 12.3%, a decrease of 260 basis points year over year as lower revenue absorption, additional tariff costs, and currency headwinds were only partially mitigated in Q3 by our earlier cost and pricing actions. Our third quarter 2025 non-GAAP operating margin of 12.3% represented a meaningful sequential improvement over the 9.0% we reported in the second quarter. Our third quarter diluted non-GAAP EPS was $0.45, down 25% from $0.60 in Q3 of 2024, but up sequentially compared to the $0.32 we reported in the second quarter of 2025.

Gerald will obviously discuss the drivers for margin and EPS later in more detail. Moving to slide five, our year-to-date Q3 revenue increased by 3.0% to $2.5 billion. Organic revenue declined 3.1% with a 2.9% organic decline in scientific instruments and a 5.5% organic decline at BEST net of intercompany eliminations. Our first nine months’ 2025 non-GAAP growth and operating margin and GAAP and non-GAAP EPS performance are all summarized on slide five. Please turn to slides six and seven, where we highlight the year-to-date third quarter performance of our three scientific instruments group and of our BEST segment, all on a constant currency and year-over-year basis. Year-to-date 2025 Biospin Group CER revenue of $612 million was down mid-single digit percentage. Biospin saw growth in lab automation and services offset by a tough comparison with two gigahertz-class NMR systems in Q3 2024 revenue versus none in Q3 of 2025.

Biospin saw weakness in ACAGAV and biopharma revenues but improved order growth in both end markets in the third quarter of 2025. Year-to-date 2025 CALID Group revenue of $879 million increased in the low double-digit percentage driven by microbiology and infectious disease diagnostics, with strength in both the MALDI Biotyper and the Elitech molecular diagnostics franchises. Life science mass spectrometry is seeing early traction for recently launched products, including the new TIMS Omni and the new TIMS Metabo, both launched at ASMS, while our molecular spectroscopy revenues remain stable but with strong applied markets orders in Q3 2025, as was mentioned earlier. Turn to slide seven now, please. Year-to-date 2025 Bruker Nano revenue of $775 million declined in the low single digit percentage. Revenues from advanced X-ray and nanoanalysis tools were down year over year, partially offset by growth in spatial biology.

Strength in biopharma year-to-date revenues was offset by weakness in ACAGAV and software industrial research and semi markets. Finally, year-to-date 2025 BEST revenues declined in the mid-single digit percentage net of intercompany eliminations. The clinical MRI superconducting wire market improved in Q3 and is now flat year-to-date, while our BEST research instruments business has been weaker due to a very strong prior year comparison. Moving on to slide eight. You may have seen our press release that we had some recent NIH and NSF-funded orders for advanced NMR instruments. I won’t go through all of them, but here are several very unique enabling and breakthrough tools listed on this page with the respective customers that are really very important for fundamental scientific research and very much, very much so also for drug discovery and disease biology research. The aggregate value of these orders was disclosed previously. It’s about $10 million.

They’re all expected to be installed and in revenue next year, not in Q4. Maybe the bigger message here is in that last bullet on slide eight that our scientific instrument ACAGAV orders, as I mentioned earlier, we were pleased were up mid-teens percentage organically year over year in Q3, and this was despite lingering U.S. weakness. There have been some improvements in the U.S., but primarily there are significant improvements outside of the U.S., Europe, Japan, and in China. Another press release, if you go to slide nine, that we stressed yet recently, there are some new, if you like, applied markets. This is not food testing. This is security and defense and homeland security. In this case, we have a very, very nice product line that’s sort of growing rapidly, 30% year over year.

We were highlighting some recent orders from explosive trace detectors that you will find at a lot of European airports and an increasing number of those, but also in South Korea and the Middle East. They have particularly performance and usability advantages. This, by the way, isn’t just an instrument sale. This is then five or seven years of consumables and service sales. It’s a nice steady business, and we have been gaining market share and are pleased with those orders. Because of tensions and rearming in Europe, we also got some significant defense detection orders from a Central European Ministry of Defense. This was not for Ukraine, but others are worried as well and are obviously—there’s a smaller part of Bruker that, if you like, is part of applied markets that’s growing very nicely. We thought we’d highlight that for you because obviously ACAGAV was weaker this year.

To wrap up, our third quarter P&L was still impacted by the various headwinds we’ve seen across the industry earlier this year. However, the results came in ahead of our expectations. Our improved bookings in Q3 2025 and scientific instruments book-to-bill ratio above 1.0 make us optimistic that we may be past the trough in demand. We look to build on this performance in Q4, and we are increasingly confident in a fiscal year 2026 partial recovery. We expect significant improvements in our organic revenue performance compared to our meaningful organic decline in 2025. Importantly, we are taking up to $120 million in cost out of our business in fiscal year 2026 in order to drive significant margin expansion and strong double-digit EPS growth.

In perspective, our transformed project Accelerate 2.0 portfolio is fundamentally very strong in post-genomic drug discovery and disease biology research, leveraging both proteomics and multiomics, as well as spatial biology. In innovative diagnostic solutions for microbiology, molecular diagnostics, and now also therapeutic drug monitoring. Finally, really an emerging $100 million area for us is now the fast growth area of automated, digitized, or digital labs ready for AI, or perhaps even driven by AI, the automated AI labs, if you like. These are four major profitable growth opportunities, and they are complemented by our healthy diversification in industrial research, QC markets, semiconductor metrology, and as you’ve seen, applied and security markets.

Combining this outstanding portfolio with operational excellence and strong execution, I am confident that by 2027, we can outgrow our markets again by 200-300 basis points per year on average and continue our rapid margin expansion and double-digit EPS growth after overcoming the multiple ACAGAV demand, new tariffs, and strong currency headwinds in 2025 with a partial recovery in 2026. With all of that, let me turn the call over now to our CFO, Gerald Herman, who will review things in more detail. Gerald. Thank you, Frank, and thank you, everyone, for joining us today. Pleased to provide some more detail on Bruker’s third quarter and year-to-date 2025 financial performance, starting on slide 11. In the third quarter of 2025, our results came in above our expectations on both the top and bottom lines.

In the third quarter of 2025, Bruker’s reported revenue decreased 0.5% to $860.5 million, which reflects an organic revenue decrease of 4.5% year over year. Acquisitions contributed 1.1% to our top line, while foreign exchange was a 2.9% tailwind. Geographically and on a year-over-year organic basis, in the third quarter of 2025, our Americas revenue declined in the low single-digit percentage. European revenue was roughly flat, while Asia-Pacific revenue declined in the mid-single digit percentage, including flat performance in China. For our IMEA region, revenue declined by over 20%. Scientific instruments organic revenue segment declined 5.4% in the third quarter of 2025. As mid-single digit organic growth in Kallid was more than offset by a double-digit organic decline in Biospin and a high single-digit organic decline in Bruker Nano. BSI Systems’ revenue declined roughly 10%, while BSI aftermarket revenue increased mid-single digit percentage organic year over year.

As Frank mentioned earlier, our order bookings performance in the BSI segment was up organically in the mid-single digit percentage year over year, and our BSI book-to-bill ratio for the third quarter was above 1.0. Non-GAAP gross margin decreased 110 basis points to 50.1%. Q3 2025, non-GAAP operating margin was 12.3%. Impacted by tariffs, foreign exchange, and the headwind from the prior year comparison of two gigahertz-class NMRs in our third quarter 2024 revenue. On a non-GAAP basis, Q3 2025 diluted EPS was $0.45, down 25% from the $0.60 we posted in the third quarter 2024, but improved sequentially and well ahead of our expectations. Our EPS in the third quarter of 2025 includes a $0.01 dilution from the mandatory convertible preferred offering we completed in September and benefited from a lower non-GAAP effective tax rate of 24.4%.

On a GAAP basis, we reported diluted loss per share of $0.41, reflecting non-cash goodwill and intangibles impairment charges of $119.4 million. And restructuring charges in the third quarter of $34.5 million. Non-GAAP weighted average diluted shares outstanding in the third quarter of 2025 were 152 million, flat compared to the third quarter of 2024. Slide 12 shows Bruker’s performance on a year-to-date basis for 2025, which has similar drivers to those in the third quarter. Turning now to slide 13, in the first nine months of 2025, we had operating cash outflow of $95.7 million. Driven by lower profitability, timing of tax, and key vendor payments, and restructuring expenses. We expect to see improved cash flow in the fourth quarter, our largest and most profitable quarter of the year, and always our strongest cash flow quarter. Turning now to slide 15.

We are updating our full year 2025 forecast and outlook to reflect Q3 results, order timing, and the impact of our September mandatory convertible preferred offering. Our outlook for the full year of 2025 now assumes revenue in a range of $3.41 billion-$3.44 billion. Reflecting an organic revenue decline of 4%-5%. Late order bookings in the third quarter, as well as certain customer site readiness issues, are expected to push a portion of revenue we previously expected in the fourth quarter into fiscal year 2026. The full year 2025 revenue growth contribution from acquisitions is expected to be approximately 3.5%. And we expect a foreign currency tailwind of about 2.5%. This leads to updated reported revenue growth guidance of 1%-2%. For operating margins in 2025, we now expect approximately 250 basis point decline in operating margins year over year.

This consists of headwinds of 60 basis points from M&A, 60 basis points from tariffs, 65 basis points from foreign exchange, as well as a 65 basis point decline in organic operating margin. On the bottom line, our updated full year 2025 guide now reflects non-GAAP EPS in a range of $1.85-$1.90. This includes a $0.07 dilution from our mandatory convertible preferred offering we completed in September. For your modeling, we expect the MCP offering to have a roughly $0.20 dilutive impact on our fiscal year 2026 EPS. Despite this dilution, we continue to expect double-digit non-GAAP EPS growth in fiscal year 2026 due to the significant cost savings initiatives we’re implementing this year. Other guidance assumptions are listed on the slide. Our full year 2025 ranges have been updated for foreign currency rates as of September 30, 2025.

With respect to the fourth quarter of 2025, we still expect relatively soft organic revenue performance with a mid to high single-digit % decline year over year due to lingering effects of weaker orders earlier in the year. We expect non-GAAP EPS for the fourth quarter to show significant sequential improvement, but still be down meaningfully year over year, as implied by our guidance. To wrap up, the first half 2025 market headwinds adversely impacted our financial performance in the full year 2025. However, we’re encouraged by our solid order performance in the third quarter of 2025 and expect to drive improved P&L performance in full year 2026 and beyond. With our cost savings plans well on track, we’re fully committed to significant margin expansion and double-digit EPS growth in fiscal year 2026. With that, I’d like to turn the call back over to Joe. Thanks very much. Thanks, Gerald.

We will now begin the Q&A portion of the call. As a reminder, to allow everyone time for questions, we ask that you limit yourself to one question and one follow-up. Operator. We will now begin the question and answer session. To ask a question, you may press star then one on your touchstone phone. If you’re using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Paneet Soda with Leer Inc. Partners. Please go ahead. Yeah, hi, Frank. Thanks for taking my questions here. First one on the book-to-bill, good to see more than one and congrats on the quarter. Just given the order momentum you’re seeing here, but just wondering, how has that trended in the fourth quarter?

Are you continuing to see the mid-teens organic order growth here? And maybe could you elaborate a bit, just a number of moving parts here. How has the international momentum continued? Is it more active versus pharma? And maybe tell us a bit more on the academic side of the U.S. Are you starting to see some recovery there? Given the points you mentioned, DMP and a couple of other points you mentioned in the slide. Yes. Thank you very much, Paneet. So we really don’t have Q4 data yet. It’s too early. I just can’t comment on Q4. There’s no meaningful data available yet. Moving parts, ACAGAV. The strength in ACAGAV orders was primarily outside of the United States, but the United States were less weak. All right, less soft. Is that a word?

Anyway, Q3 was better in the United States for ACAGAV orders than Q2, and we saw some orders come through. I gave you some NMR examples, but of course, it was broader than that. Also included TIMS stuff and microscopes and other stuff. Hard to say what’s the trend in the U.S. because clearly in the U.S. there was a little bit of catch-up in Q3 compared to Q2 and maybe even Q1. In ACAGAV orders in Europe and Japan, and a little bit in China also. That is why there might be green shoots, were quite encouraging, and that is why our ACAGAV orders year over year were up considerably in Q3. Do not think that we are now in a high teens growth trend all of a sudden. That is just a quarter, and Q3 2024 was not the strongest. It was very encouraging.

We hope that will continue in Q4, but I would not. The activity and opportunities are great and are encouraging, but I would not read anything into that yet. Just too early to comment on Q4. We do need Q4 to then give more meaningful growth and margin numbers for 2026. We are not going to do that today. We are not able to do that today until we really see how Q4 comes in, particularly the orders, obviously. To the other moving pieces, Paneet, yes, biopharma has been reasonable or okay, not great, but okay in the first half of the year, much better in the third quarter of the year in terms of orders. A particular strength there in the U.S., but also outside of the U.S. ACAGAV, sorry, biopharma particularly in the U.S.

And the applied market strength, which is a good sign of macroeconomic trends, that had a pretty broad international distribution. I do not know that I would highlight any geography there. That may add some color to the admittedly multiple moving pieces. The effect that Bruker, that prior order weakness now shows up in the P&L, whereas the new order improvements and encouragement, and maybe it is momentum if Q4 goes well, it is more likely to show it will show up all in 2026. Hope that helps. Got it. That is very helpful. Anything on the ultra high frequency gigahertz NMRs, how are you thinking about those? Obviously, the tougher comp in the third quarter, but as you go into 2026, how is the momentum there? I know we have been waiting for the U.S. to acquire more of those instruments. Thank you. Yeah, the U.S.

is the enigma there, but obviously, there are also other geographies. I still cannot call the U.S. trends. Obviously, nothing has come through so far. We will see. We are expecting at least one order for the gigahertz-class in Q4, not in the U.S. There are a number of cases brewing around the world, including in the U.S. but today is too early to do that. So when we give guidance for 2026, and presumably in early February of 2026, we can also comment on what has come in or where we have clear line of sight for ultra high field or for the gigahertz class. Yes, nothing in revenue in Q3. We expect hopefully one order in Q4. Sometimes these things get delayed by a quarter. Anyway, it is just not such a big part of our business anymore. I know they are easier to count.

Indeed, in Q3, a lot of our organic decline had to do with these two gigahertz class systems in Q3 2024 revenue, which accounted for more than $25 million of our revenue and comes with nice operating profits and margins. It did have an effect on Q3. That is the color I can give you. More to come when we give guidance in early February. Got it. Thank you. The next question comes from Michael Ryskin with Bank of America. Please go ahead. Michael, your line may be on mute. Hi, this is Mike on for this event’s gone for Mike. Could you give us the impact of the government shutdown that you were seeing in Q4, and is that baked into the updated outlook? Thank you. That is a good question, and it is not formally baked into our outlook.

So far, we have assumed that the effect will be relatively minor, but indeed, if this were to continue for a full second month or so, then this may delay some new grants, some orders. It could also delay some installations. So far, we have not become aware of anything that gets. We think that our Q4 guidance is now appropriately conservative to absorb some of that and maybe what we have seen so far, but if there was a further multi-week or multi-month shutdown that could have additional impacts that are not presently in our guidance. Understood. Thank you. I know that you are not formally guiding on 2026 today, but you called out meaningful improvement versus the minus 4-5% organic in 2025. Is it fair to assume that you can grow revenues in 2026, or are we looking at flat year over year? Thank you.

We are not making that assumption yet. It is a fair question, of course. We really do want to see our Q4 2025 bookings in order then to give hopefully reliable guidance in February of 2026. Yes, I mean, this year 2025, we are coming down organically quite a bit, right? We undoubtedly can do much better than that next year, but we are not presently. I do not want to state any assumptions because then you will take them as guidance and they are not. We just want to make sure that with the significant cost cutting that we are doing, even without growth, which is not our assumption, but even without growth, we can expand our operating profit margins very significantly, say 250-300 basis points or something like that. Yes, we expect, we continue to expect double-digit EPS growth.

Even after absorbing the roughly $0.20 dilution that Gerald mentioned during his prepared remarks for the additional dilution from the mandatory convert that we did in September. We still expect to do double-digit non-GAAP EPS growth next year. That is without that simply for mathematically, that is simply, we are not, this is without growth. Without growth is not our preliminary guidance. Period. That is what we are looking at right now. Preliminary guidance for us right now on growth does not make sense until we have seen our Q4 orders for Bruker. That is going to be very important for next year. Understood. Thank you for the color. Thank you. The next question comes from Taisho Peterson with Jefferies. Please go ahead. Hey, thanks. Frank, I want to pick up on that margin point.

It sounds like you are committing to this 300 basis points of margin expansion, even if the top line is flat, I guess. Given that you are running at the high end of the $100 million-$120 million cost savings target in the near term, should we interpret the upper end of savings as simply kind of increasing confidence in hitting that margin target next year, or do you think you could potentially do better? Okay. Nice question, Taisho. I was not confirming a number. I know you have mentioned one. I am not saying take that number out of your model, but I am not confirming it either. I think the second part of your question, I think it is fair to say we hope to have increased confidence in getting to very significant margin expansion and double-digit EPS growth all in, including the MCP.

That is exactly why we are driving towards the high end of our cost-cutting target. You are spot on with that one. Okay. Then just probing a little bit on your assumptions. We are not talking numbers for 2026, but just A&G, the outlook there, assuming flat-ish NIH budget. I mean, just talk a little bit about some of the give and takes around multi-year grants. I assume you are not expecting any budget flush here in the near term, but then as we think about next year, do you think A&G orders will grow? Can you flesh out your comments on China stimulus? How material was that, and how do you think about that for next year? These are all very important questions, right? There was a little bit of a budget flush for the fiscal year 2025 and orders, sorry, and funding coming out of NIH.

You all report that very well. It did improve in the third quarter, and particularly in September. I am aware of a cancer center that had fantastic NIH funding and cash coming in the door to where they even were flat or higher than the previous year. There was a mini budget flush. It went into a lot of multi-year grants. It went into things that they could fund readily. It went into a few instruments too. We sold some NMRs and some TIMS stuff and some other stuff. It was not very strong yet, which is why the strength in academic bookings for us in Q3 came from outside the U.S. The U.S. did improve a little bit sequentially. It just was not a growth driver yet year over year. That was that. NIH budget for 2026 and NSF budget while we are at it.

We are not necessarily assuming that it is flat. We would be delighted that it is flat. If we have to take 10% or 15% down, I think that will work for us too. I just want to be—it is hard to predict these things. We are not necessarily baking in an NIH budget flat. Again, delighted if it happens, but we can also work with it being down 10% or 15%. As you know, it is then actually more important whether the stuff actually gets disbursed regularly or gets held up for the majority of the year. We are, along with Q4 bookings, also looking forward to clarity on NIH and NSF and DOE budgets for research for fiscal year 2026. Hopefully, that all comes in calendar Q4 to give us more visibility. China, yeah, some green shoots, yeah. There were less than $10 million in orders.

Clearly, well, in orders anyway, but in clearly seemingly stimulus-related orders where customers said, "Yeah, this is stimulus money being released." Less than $10 million, not—and again, I think that is a green shoot. We will need to again see how that continues in Q4. I think in Q2, there was none of that. It is a little bit better, right? China contributed, but Japan, and quite honestly, Europe were really strong in ECOGAV orders in Q3. That is the color around the world. Okay. Thanks. Lastly, you just mentioned an order push-out. Can you quantify how large that was in the one you mentioned in your prepared comments? You mean—oh, revenue push-out? Yeah, there are a few sites that want delivery in Q1 rather than in Q4.

That also added to some of the more conservative guidance that we now have for the full year, but really implied for Q4 because that is all that is left. Okay. Thanks. I think I mentioned a lot. It is true that, I mean, it is always true that we get more than half the orders in a quarter in the third month of every quarter. Yes, a lot of the orders and the order improvement really became clear in September. If all of these orders had come in in July, maybe some of them would have made it into Q4, but now—I mean, there is some small stuff that will go into Q4 and all this does, but most of the larger orders go into next year. Most of the larger orders that came in in September will be revenue in next year, I should be precise. Thank you.

Thanks. The next question comes from Luke Serga with ArcLeaf. Please go ahead. Great. Thanks for the questions. I just want to talk on China. Coming in flat here. Things kind of improved sequentially. Just talk about what you’re seeing there more broadly. Pull forward. You talked a little bit about the stimulus, the murder’s row of key questions, but. How are you guys thinking about 4Q and the exit rate? And ultimately, are we kind of seeing some type of stabilization here, or is this just kind of like a one-off? Good questions. I wouldn’t read too much into starting backwards, Luke. I wouldn’t read too much into the Q4 2025 exit rate. That’s just Q3 and Q4 relatively weak on the P&L. Is pretty much the result of weak orders and yes, and some new currency and. Tariff challenges early in the year.

We can work our way through those and. Offset them and more than offset them by next year, but only partially this year. I would. Hesitate to take any given quarter this year as modeling something for next year. On China, yeah, China was a little bit better, right, sequentially. Not only in academic, not only some of the. Less than $10 million. I think it was closer to $6 million or something like that in stimulus green shoots. China felt a little better in Q3. Perhaps all around than in Q2 when they were. Probably staring down a trade war barrel. And maybe now. Maybe now that gets. That seems to have, even before the meeting that just happened recently, that maybe the whole world’s getting a little bit more optimistic that, well, we know the new tariff setup and there are not likely to be major trade wars.

Hard to say, right? So China was a little better in Q3 than in Q2. All right. Thanks. And then turning to the spatial and the demand that you guys are seeing there. Can you talk a little bit about the. Cadence for the instruments versus the consumables? And then the push here in ability to use your existing scale as this kind of hits the core to push further with academic government customers or deeper into pharma? Yep. Good question. Yeah. Spatial biology was all right. Slightly better orders or somewhat better orders in Q3, including international, I believe, as well. That’s both consumables and instruments. Remember some of the new workflows, like the whole transcriptome on the cosmics, of course, also will run on existing systems. They may need some upgrades, but you don’t always need a new system for that.

I think there was also strength in cosmics and cellscape orders. Painscape is still very new, so a lot of that is sort of, "We’ll take a little while and have a number of labs that are going to have placements of the Painscape, do this new spatial genomics, and look at dysfunction in cancer and infectious disease before that turns into papers, before that turns into revenues." That’s super interesting, but it’s not going to be a big contributor yet, whereas Cosmics and CellScape are doing well, also including some of the consumables. Spatial biology is doing better. Of course, we could use more U.S. academic funding. It was quite dependent. Two-thirds of that is academic government, and one-third is biopharma. That strengthening in biopharma also is good for spatial biology. As you know, so far in the U.S., that’s stronger than the ECOGAV growth. Yep. Great. Thanks.

The next question comes from Subu Nambi with Guggenheim. Please go ahead. Hey. Thank you for taking my question. Frank, some of the niche end markets in 2026, like diagnostics and maybe semis, what do those look like next year? Can Elitech be a low double-digit grower in your mind? Yeah. I mean, diagnostics is very important for us, right? About $500 million. They’ve done well in 2025, both in clinical microbiology and the molecular diagnostics that are both in that infectious disease division. MALDI Biotyper, good growth, very good growth in consumables and software and so on. Now in that business, I think it’s 60% aftermarket, which is service, consumables, but also database subscriptions. Very healthy there. The diagnostics business, the Elitech business primarily is a delight this year. It’s growing nicely. It’s expanding this year, 2025. It’s growing its margins. It’s growing, which is nice this year.

It’s actually at, I do not know the exact growth rate. It’s growing somewhere in the single digits, maybe even high single digits, which is lovely. Its placements have really outperformed significantly. I know you cannot take placements to the bank, but next year you will be. They had a lot of placements of their Ingenius and BGenius stations. The commercial synergies with Bruker are really working, and they’re getting into countries and into labs they previously could not get. I think their placements are something like 20% or more ahead of their business plan, which is not revenue this year. When these systems are placement under reagent rentals, then it takes six months until you really have the revenue ramp, but hopefully, then you have five to seven years of really solid revenue and consumables pull through. That’s going really well.

Semi, you have to look at it on an annual basis. I think we had, this year, two quarters of fantastic orders and two quarters of not-so-fantastic orders. Over the year, it’s all right. I think it’s flattish this year. I do not think there’s anything structural there. Revenue-wise, it’s been a little weaker, and we expect that to improve next year. Semi really has to look at it on an annual level. It’s a very nice margin contributor. Semi now is approaching or is around $300 million in annual revenue. It’s also pretty meaningful for us. Along with the diagnostics business, it has some of the best incremental margins. Those are very core to us. These are not niches for us, even though we love the post-genomic era. Both of those are just really important core businesses. Thank you for that, Frank.

Just to follow up, can you unpack where you saw orders incrementally positive from a product perspective? Is it the lower-priced equipment? How has consumables been impacted? Any color you could share there? For diagnostics, for molecular diagnostics and the Elitech, remember they’re primarily active in Europe, in selected countries in Asia, not in China, for instance, in parts of Africa, parts of Latin America. The strength there has been particularly in Europe, the placement strength that I mentioned. Can you repeat the question, Subu? I’m sorry. I thought you were referring to diagnostics, but yes. My first question was diagnostics. Yeah. Sorry. Backing up. In general, the order strength that you saw this quarter, where did you see the strength coming from from a product perspective, either diagnostics or outside of diagnostics?

I think, Subu and Gerald, I’d say the orders’ strength in the third quarter was coming from larger ASP-based instruments. We did have some volume, particularly coming out of our optics and AXS businesses, which tend to have lower ASPs. I’d say the bulk of the performance in the orders was particularly coming out of the European markets as well, just to clarify that. I mean, we saw considerable strength in the European markets, both in the ECOGAV side, particularly. I think I can answer it now. It took me a second. The strength in orders in Q3 of 2025 had very little to do with diagnostics. Diagnostics was just coming along, and it’s fine. The more discrete items were strength in ECOGAV outside of the U.S., biopharma, and applied. That’s right. None of those include diagnostics. Thank you for that. Sure.

The next question comes from Casey Woodring with JP Morgan. Please go ahead. Great. Thank you for taking my questions. On orders, historically, orders improved sequentially in Q4 in your business, but you’ve talked here today about some catch-up in academic and government in Q3. Can you just maybe walk through what the range of outcomes looks like in Q4 from an order exit rate perspective? How safe is it to assume orders step up sequentially, or are there scenarios where orders could be flat or down in Q4? I have a follow-up. Thanks. Sure, Casey. Okay. In ECOGAV, where we observed a little bit of catch-up was in the U.S. I don’t think that there wasn’t any holdback. Actually, in the U.S. and in China, a little bit. In the rest of the world, I think that catch-up, I’m not aware of that. China and the U.S.

and ECOGAV have been holding back. That’s why Q2 orders, for instance, in both of those geographies were weak. To your second part of your question, Q4 is always strong. The question for Q4 will not be, will it be up sequentially over Q3? That’s pretty much a given. Whether what the trend will be year over year compared to Q4 of last year. Got it. That definitely helps. No, no, that definitely helps. My second one, just quickly, on backlog, I think last quarter, you noted you had six and a half months, and you talked about that going down to five months in a normalized environment. Maybe just walk through kind of how you’re seeing that play out over the course of 2026. Thank you. What I can—this is Gerald.

What I can comment on is that we currently have about seven months of backlog through the third quarter of 2025, which is actually up now from the six and a half months we quoted at the end of the second quarter. I mean, I guess to a large extent, it really depends on our 2026 performance is really going to depend on how it looks like for the fourth quarter in terms of our revenue performance. Based on our guide, it looks like we will still carry considerable backlog into the 2026 period. Right. All right. Great. Thank you. You’re welcome. Thank you. The next question comes from Brandon Collard with Wells Fargo. Please go ahead. Hey, Gerald. Thanks for taking the question. Just a couple of housekeeping items. You gave us an updated interest expense number for the year. What’s the run rate for the fourth quarter?

Is that a good figure to assume for 2026? Is the impact of the share count from the MCP offering about 13 million shares? Thanks. Yeah. To answer your last question first, the answer is yes, roughly. The first part. We’ll go through, Brandon, a little more modeling on the interest because it gets a little complicated, partly because you may know we had some gains, some foreign exchange gains that get covered in that line as well. Somewhere in that range, the two quoting on interest is correct, but we’ll talk more about that in our modeling discussions. The next question comes from Josh Waldman with Cleveland Research. Please go ahead. Hey. For you. First, I wondered if you could talk a bit more about what you’re seeing in Europe.

Was it primarily ECOGAV accounts that improved there, or did you also see pharma and applied accounts improve as well? I guess at this point, what’s your confidence level on the sustainability in stronger orders? I mean, were there any one-off funding programs or anything like that that released in the third quarter that leave you, I guess, nervous about the durability of stronger orders there? Yeah. I guess I’d say, generally speaking, Europe was stronger. We did see strength in both ECOGAV as well as applied and biopharma. Those are good signs, and I don’t think there were specific one-offs related to those trends. I think we’re more confident, but I would say we need to see, as Frank has repeated a couple of times here, we need to see the fourth quarter order performance in order to confirm that specifically.

All of those markets, in particular on the ECOGAV side, European were not being driven by one-off improvements or orders. Got it. Okay. A follow-up. I wondered if you could provide more color on what you’re seeing out of pharma. I mean, it sounds like you saw sequential improvement in bookings. I forget if you commented what orders look like year over year. Does it seem like accounts are trying to push orders through by year-end, or does this seem like maybe a change in how they’re viewing medium-term investment in research tools? Good questions. Josh, this is Frank. Not aware of any particular drives to get orders in placed before the end of the calendar year. I would take this as biopharma having invested less now for—so there was kind of a COVID or immediate post-COVID boom. There was a hangover, right?

Then some concerns about most favorite nations’ pricing and how much CapEx did they need to move things in production to the US? Many of them have now committed to do that. It doesn’t happen overnight. Maybe that has cleared the decks a little bit to where they are investing in tools that will make drug discovery more efficient and give them better insights. Those tools, that’s exactly what we provide you. Yes, you need sequencers, but you need a hell of a lot more than that to really have deeper disease biology and then drug target, drug mechanism of action insights. Hopefully the still very poor yield and enormous expense and length of bringing a successful drug to market will improve.

That requires—they’re the biggest integrated fans of this hypothesis or thesis or fact, I would say, that we are in the post-genomic era and we need to understand the disease biology and the drug mechanisms a lot better to get less attrition and more yield and better drug discovery. They completely agree with that. They may not use the same terminology, but that’s how they’re investing. I would just add that the third-quarter performance on revenue was good. Okay. The order performance from biopharma across the globe was strong in the third quarter from an order perspective. Got it. Thanks, guys. The next question comes from Doug Shank with Wolfe Research. Please go ahead. Hey, good morning, guys. Thanks for fitting me in. Gerald, how do we balance what you’ve talked about in terms of the cost savings initiatives? You sound as good as ever on those.

You’ve exhibited some confidence about what you can do in 2026 from a margin expansion standpoint, seemingly in any growth environment. I mean, at one point, I think last quarter, you talked about getting 300 basis points of margin expansion next year, even in a flat growth environment. On the other hand, I think you increased your assumption for organic operating margin headwinds by 45 basis points for the year, which is pretty material with one quarter to go. I’m just trying to figure out how do we balance these things? Is there some risk that the benefits that you expect to occur over time are going to take a little bit longer to show up in the P&L just because of maybe the environment we’re in and the fact that I think a lot of these changes that you’re making are being done outside the U.S.

where regulations can work against you? Again, I’m just trying to think about this as we try to set you guys up to succeed with realistic targets for 2026. Thank you. Yeah, sure. Nice to hear from you, Doug. Here’s what I’d say. First, our cost-saving initiatives will be, and we expect them to be, at the high end of the range we quoted, this $100 million-$120 million for fiscal year 2026. We’re fully committed to that. Actually, we’re well on track with that. Ninety-five percent of the actions that needed to be taken to realize that are already underway or have been fully implemented. Very confident with respect to that. I think more generally, our expectation around margin expansion of closer to 300 is where we are, even under relatively weaker revenue conditions for 2026. That’s the position we’ve taken, and I think we’re holding to that.

I think the issue for us, as you already know, Doug, is some of these activities around cost savings do take a bit of time just because we have to go through a process, particularly in Europe. A lot of our cost-saving actions are driven around Europe because of our footprint. There’s going to be a slight likely delay in some of this as we’re going to see more of it hitting in the second quarter of 2026 as opposed to in the first. That doesn’t take us off the target, I think. Let me also—I mean, we did get Europe, there are other economic problems and layoffs by other companies.

We got very good cooperation, for instance, in Germany and France, which can be difficult from our workers’ councils and committee d’entreprise. They have agreed. They have approved that what we are doing is reasonable and protects the core and all of that. Good cooperation. When Gerald said that, yeah, Q1 will have—the $120 million for the year, we are very committed to that. Q1 will have, I do not know, 90% or 95% of the run rate cost savings implemented. A few things, just the way they are timed, will come in in Q2. It is not going to be a big modeling difference, Doug, or anybody else. Yes, that is how it flows. The $120 million is not some sort of a Q4 run rate. That is for the full year. Exactly. Yeah.

Just to your earlier part of your question, I mean, we did have—with respect to the fourth quarter of 2025, we do have some mixed challenges in the fourth quarter for 2025 that we did not see in the previous year as well. I think you are going to see some—you did see a change in the overall guide from an organic. Operating margin impact with respect to the fourth quarter. That is the explanation for that, Doug. Okay. I will leave it there. Thank you, guys. Thank you. Thank you all. This concludes our question and answer session. I would like to turn the conference back over to Joe Kostka for any closing remarks. Thank you for joining us today. Bruker’s leadership team looks forward to meeting with you at an event or speaking with you directly during the fourth quarter.

Feel free to reach out to me to arrange any follow-up. Have a good day. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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