Earnings call transcript: Danaher Q2 2025 beats estimates, stock dips

Danaher Corporation reported its second-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.80, compared to a forecast of $1.64, marking a 9.76% surprise. Revenue reached $5.94 billion, slightly above the expected $5.84 billion. Despite the positive earnings results, the company’s stock price experienced a decline, falling by 1.04% in premarket trading. According to InvestingPro data, Danaher currently trades at a P/E ratio of 36.38, indicating a premium valuation relative to peers. The company maintains a strong financial health score of "GOOD" based on comprehensive analysis of growth, profitability, and cash flow metrics.

Key Takeaways

• Danaher beat EPS and revenue forecasts for Q2 2025.
• Stock price fell by 1.04% in premarket trading despite earnings beat.
• Core revenue growth was reported at 1.5%.
• The company raised its full-year EPS guidance to $7.70-$7.80.
• Structural cost reduction efforts are ongoing, targeting $150 million in savings.

Company Performance

Danaher’s overall performance in Q2 2025 demonstrated resilience, with sales reaching $5.9 billion and core revenue growth at 1.5%. The company’s strong positioning in non-discretionary healthcare markets, which account for 80% of sales from consumables and service revenue, contributed to its robust performance. However, challenges in high-growth markets, particularly a mid-single-digit decline in China, tempered overall growth.

Financial Highlights

• Revenue: $5.9 billion, up from the previous quarter.
• Earnings per share: $1.80, a 5% increase year-over-year.
• Gross profit margin: 59.3%.
• Adjusted operating profit margin: 27.3%.
• Free cash flow: $1.1 billion in Q2, $2.2 billion year-to-date.

Earnings vs. Forecast

Danaher’s actual EPS of $1.80 exceeded the forecast of $1.64, resulting in a 9.76% surprise. Revenue also surpassed expectations, with a $5.94 billion result compared to the $5.84 billion forecast. This performance marks a continuation of the company’s trend of exceeding market predictions, reflecting strong operational execution and strategic positioning.

Market Reaction

Despite the earnings beat, Danaher’s stock price fell by 1.04% in premarket trading, closing at $187.03. This decline contrasts with the broader market trend and may reflect investor caution amid macroeconomic uncertainties and regional market challenges, such as the decline in China. Based on InvestingPro’s Fair Value analysis, Danaher appears to be trading near its Fair Value, with analyst price targets ranging from $210 to $310. The stock has historically demonstrated low price volatility, with a beta of 0.8 over the past five years.

Outlook & Guidance

Looking ahead, Danaher raised its full-year EPS guidance to a range of $7.70 to $7.80, with an expected core revenue growth of approximately 3% for 2025. The company’s strong financial position is supported by a moderate debt level and sufficient cash flows to cover interest payments. Discover more detailed analysis and future growth projections in Danaher’s Pro Research Report, available exclusively on InvestingPro, along with 1,400+ other comprehensive company reports designed for informed investment decisions. The company anticipates low single-digit core revenue growth in Q3, with an adjusted operating profit margin of around 25.5%. The bioprocessing segment is expected to see high single-digit growth, driven by new product launches and strategic partnerships.

Executive Commentary

CEO Rainer highlighted the company’s strong market positioning, stating, "We’re well positioned in end markets with long-term secular growth drivers." He emphasized the resilience of Danaher’s business model, noting, "Our businesses share a common set of relatively durable, high recurring revenue business models." Rainer also expressed confidence in the company’s ability to maintain strong results, citing the "talented team, the differentiation of our portfolio, and our strong financial profile."

Risks and Challenges

• Supply chain disruptions could impact product availability and cost structures.
• Ongoing global trade tensions may affect market dynamics and growth opportunities.
• Macroeconomic pressures, including inflation and currency fluctuations, pose risks to profitability.
• Market saturation in certain segments could limit growth potential.
• The decline in high-growth markets, particularly China, may continue to challenge revenue growth.

Q&A

During the earnings call, analysts inquired about global trade tensions and their potential impact on pharmaceutical capacity expansions. Executives addressed concerns about bioprocessing order trends and market dynamics, as well as the recovery of the China market. Questions about the respiratory testing market and potential guidance adjustments were also discussed, providing insights into Danaher’s strategic responses to market challenges.

Full transcript - Danaher Corporation (DHR) Q2 2025:

Margo, Conference Facilitator: My name is Margo, and I’ll be your conference facilitator this morning. At this time, I’d like to welcome everyone to Danaher Corporation’s Second Quarter twenty twenty five Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. I will now turn the call over to John Bedford, Vice President of Investor Relations.

Mr. Bedford, you may begin your conference.

John Bedford, Vice President of Investor Relations, Danaher Corporation: Required by SEC Regulation G relating to any non GAAP financial measures provided during the call and a note containing details of historical and anticipated future financial performance are all available on the Investors section of our website, www.danaher.com, under the heading Quarterly Earnings. The audio portion of this call will be archived on the Investors section of our website later today, under the heading Events and Presentations, and will remain archived until our next quarterly call. A replay of this call will also be available until 08/05/2025. During the presentation, we will describe certain of the more significant factors that impacted year over year performance. Our Form 10 Q and the supplemental materials describe additional factors that impacted year over year performance.

Unless otherwise noted, all references in these remarks and supplemental materials to company specific financial metrics relate to the second quarter of twenty twenty five, and all references to period to period increases or decreases in financial metrics are year over year. We may also describe certain products and devices which have applications submitted and pending for certain regulatory approvals, or are available only in certain markets. During the call, we will make forward looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results might differ materially from any forward looking statements that we make today. These forward looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward looking statements, except as required by law.

And with that, I’d like to turn the call over to Rainer.

Rainer, CEO, Danaher Corporation: Thank you, John, and good morning, everyone. We appreciate you joining us on the call today. Now before we get into the details of the quarter, I’d like to touch briefly on the announcement we made this morning regarding our CFO succession plan. As I’m sure many of you saw, we announced that Matt Gagino, the current group CFO of our Life Sciences Innovation Group and Vice President of Corporate FP and A will succeed Matt McGrew as Chief Financial Officer of Danaher at the February. As we’ve done with past transitions, Matt McGrew will continue on as an Executive Vice President as he begins his gradual path to retirement.

Matt, it’s been a privilege working with you. For more than two decades, we’ve all benefited from your outstanding financial leadership, your thoughtful guidance and trusted partnership. Since stepping into the CFO role in 2019, you’ve helped guide Danaher through pivotal moments, including launching Envista and Ver Alto as public companies, the acquisition of Sightiva and the challenges of the pandemic, all while developing an exceptional internal finance talent pipeline. Matt Danaher simply would not be the company it is today without your leadership, strategic vision, and humility. Thanks everybody for everything.

Now, of you know Matt Gagino from his time as Vice President of Investor Relations. Matt has had a number of important roles during his past twelve years with Danaher. And throughout Matt’s time at Danaher, he has gained extensive experience in several key areas, including investor relations, FP and A, mergers and acquisitions, talent development, and most recently operational experience as group CFO. He has consistently demonstrated exceptional leadership and has played a central role in shaping our financial strategy and portfolio evolution. I know he’ll be an outstanding CFO as we continue to grow Danaher into one of the most respected science and technology leaders.

We look forward to helping him transition to his important role at the February. So with that, let’s get to our results. Our team’s strong execution with the Danaher Business System drove solid second quarter results in what remains a dynamic operating environment. Strong growth in our bioprocessing business paired with disciplined cost management enabled us to exceed both our adjusted operating profit margin and cash flow expectations for the quarter. While global trade tensions have led to some uncertainty, market conditions in the second quarter were generally consistent with what we saw in the first quarter.

In pharma, global production of monoclonal antibodies, where the majority of our exposure lies, remained robust, and we continued to see a modest recovery in pharma R

: and D

Rainer, CEO, Danaher Corporation: spending. Academic and government demand remained soft as expected with ongoing uncertainty around research funding. Clinical diagnostics and applied markets meanwhile remain stable. Now, while the macro environment remains fluid, we’re intensely focused on what we can control, and that’s to continue delivering for our customers, associates, and shareholders. Now our team has done a nice job running the DBS playbook to offset cost pressures from tariffs, deliver meaningful productivity gains, and turn challenges into opportunities.

At the same time, we’re taking thoughtful actions to protect our financial and competitive positioning, including addressing structural costs while continuing to invest in innovation for the long term. Our second quarter results also highlight the strength and resilience of our portfolio. We’re well positioned in attractive end markets, driven largely by non discretionary healthcare needs and supported by strong secular growth drivers. Our businesses share a common set of relatively durable, high recurring revenue business models with the majority of our revenues being consumables that are specified into regulated manufacturing processes or specific to the equipment that we supply. On top of this, our strong balance sheet and free cash flow generation positions us well to further enhance our portfolio going forward.

So with that, let’s take a closer look at our second quarter twenty twenty five results. Sales were $5,900,000,000 in the second quarter, and we delivered 1.5% core revenue growth. Geographically, core revenues in developed markets were up low single digits with North America up slightly and a high single digit increase in Western Europe. Core revenues in high growth markets were flat overall, as solid performance outside of China was offset by a mid single digit decline in China. Growth in our biotechnology and life sciences businesses in China was more than offset by declines in diagnostics due to volume based procurement and reimbursement changes implemented in late twenty twenty four.

Our gross profit margin for the second quarter was 59.3%. Our adjusted operating profit margin of 27.3% was flat year over year as the favorable impacts of higher volume leverage, product mix, and disciplined cost management were offset by productivity investments to reduce our structural costs. Adjusted diluted net earnings per common share of $1.8 were up approximately 5% year over year. We generated $1,100,000,000 of free cash flow in the quarter and $2,200,000,000 in the first half of the year, resulting in a year to date free cash flow to net income conversion ratio of 143%. Now, as I mentioned earlier, we’re continuing to make significant investments in long term growth initiatives across Danaher.

In the second quarter alone, those investments translated into several important new product and technology launches, each reinforcing our long term competitive position while delivering meaningful benefits to our customers. Let me highlight a few of these key introductions and how they’re designed to help customers improve quality and yield, reduce costs, and bring new therapies and diagnostic tests to market more efficiently. In biotechnology, Cytiva expanded its comprehensive purification portfolio with the launch of two new Protein A resins, MabSelect SUR70 and MabSelect Prisma X. Each stage of drug development presents unique purification needs, and these resins are designed to offer cost effective solutions for preclinical and clinical production without compromising on quality. They also underscore Saitiba’s commitment to delivering innovative solutions to help customers reduce manufacturing costs, increase flexibility, and maintain the high performance standards they expect across all stages of the drug development process.

Now, sciences, SCIEX reinforced their leadership position in mass spectrometry with the introduction of the XenoTOF 8,600 at June’s American Society of Mass Spectrometry meeting. The XenoTOF 8,600 expands SIACS’s high resolution mass spectrometry footprint and delivers tangible performance improvements across proteomics, lipidomics, metabolomics, and small molecule workflows. Identification and superior quantification compared to other leading high end platforms, helping scientists better understand molecular structures and measure more targets and complex samples with greater speed and confidence, with the ultimate goal of accelerating drug development times. And in diagnostics, we announced a new partnership with AstraZeneca to develop diagnostic tools that help clinicians identify which patients are most likely to benefit from precision medicine treatments. This collaboration is leveraging the newly launched Danaher Centers for Enabling Precision Medicine to support a more streamlined end to end development process.

The first product in development uses technologies from Leica Biosystems with a focus on digital and computational pathology, including AI assisted algorithms to improve diagnosis and enable more targeted therapy decisions. So now let’s take a closer look at our results across the portfolio and give you some color on what we’re seeing in our end markets today. Core revenue in our biotechnology segment increased 6%, with bioprocessing up high single digits and discovery and medical down low single digits. In bioprocessing, we were pleased to see the positive trends in our order book continue through the second quarter. Revenue growth was led by low double digit growth in consumables with particularly robust demand for commercialized therapies.

Equipment declined as expected as customers continued to absorb capacity added over the past several years, and global trade uncertainty contributed to delays in some larger capital investment decisions. In addition to strong demand for commercial production, the number of therapies in development and clinical trials remains robust. Monoclonal antibodies, which comprise more than 75% of our bioprocessing revenues, remain the largest investment area for our customers and there is a healthy pipeline of new molecules in development. At the same time, biosimilar development and production and demand for our solutions are increasing as patents on high volume therapies expire, making life saving treatments more accessible and driving broader adoption. With our comprehensive portfolio and an innovation engine geared towards increasing yields and enhancing manufacturing efficiencies, we’re well positioned to support our customers as they advance these therapies through development and into commercial production.

The strength of the development pipeline paired with consistent growth in commercial production also reinforces our conviction in the high single digit long term growth outlook for our leading bioprocessing franchise. Now turning to our life sciences segment, core revenue decreased by 2.5%. Core revenue in our life sciences instrument businesses collectively declined low single digits in the quarter. Looking across our end markets, clinical and applied markets held up well globally, while demand from academic and government customers remained weak. As I mentioned earlier, we continued to see modest recovery in pharma spending with revenue from these customers growing in the quarter.

In China, we saw an improvement in demand as stimulus related funding translated into new customer orders and revenue. Core revenue in our genomics consumables business declined in the quarter, driven by lower demand for plasmids and mRNA from two of our larger customers, along with funding pressure across early stage biotech and academic research customers. Now you likely saw IDT and Aldevron in the headlines this quarter for their groundbreaking role in helping develop the world’s first on demand mRNA based personalized in vivo CRISPR therapy. This achievement marks a major milestone for in vivo CRISPR based therapies and serves as a powerful example of how our genomics businesses are helping advance the future of personalized medicine. Now moving to our Diagnostics segment, core revenue increased 2%.

Core revenue in our clinical diagnostics businesses was up low single digits, with mid single digit growth outside of China. Beckman Culture Diagnostics led the way with high single digit growth outside of China and notable strength in instrumentation. This marks Beckman’s fourth consecutive quarter of mid single digit or better core growth outside of China. And is a direct result of good traction from recent innovations such as the DXC500i integrated clinical chemistry and immunoassay analyzer, and the DXi9000 high resolution immunoassay analyzer and continued momentum in commercial execution. In molecular diagnostics, Cepheid’s respiratory revenue was modestly better than expected, though slightly below prior year levels.

Cepheid’s core non respiratory revenue grew double digits, including double digit or better growth in sexual health, neurology, and hospital acquired infections. This sustained growth in non respiratory revenue reflects increasing menu adoption and system utilization across our installed base, along with continued strength from newer assays, such as the multiplex vaginitis panel, which grew over 75% in The US this quarter. Now Cepheid continues to expand its global installed base of more than 60,000 instruments. This expansion has been driven by notable wins across large healthcare systems and integrated delivery networks that are standardizing testing on the GeneXpert platform. As these customers look to allocate resources more efficiently, Cepheid’s point of care molecular testing is proving increasingly valuable, helping deliver greater efficiency through fewer total tests, higher rates of correct treatment, and ultimately lower overall treatment costs compared to other testing strategies.

So with that, now let’s frame how we’re thinking about the third quarter and the full year 2025. For the full year 2025, we continue to expect core revenue growth of approximately 3%. Additionally, we’re raising our full year adjusted diluted net EPS guidance to a range of $7.7 to $7.8 versus our previous range of $7.6 to $7.75 In the third quarter, we expect core revenue to grow in the low single digit percent range, and additionally, we expect the third quarter adjusted operating profit margin of approximately 25.5%. So to wrap up, we’re encouraged by the momentum we’ve generated in the first half of the year, particularly in our bioprocessing business. Our team’s focused execution in a dynamic operating environment enabled us to deliver financial results ahead of our expectations while advancing solutions that are at the forefront of improving patient and healthcare outcomes.

Our solid second quarter results also underscore the unique positioning of our portfolio. Our businesses are well positioned in end markets with long term secular growth drivers, and our business models are resilient with more than 80% of our sales today comprised of consumables and service revenue, which is typically highly recurring. At the same time, the strength of our balance sheet and financial position allows us to invest for the future, both organically and through strategic capital deployment to further enhance our long term competitive advantages. So looking ahead, we remain focused on what we can control and what has become a more complex macro environment since the start of the year. We believe the combination of our talented team, the differentiation of our portfolio and our strong financial profile, all powered by the Danaher Business System will enable us to continue delivering strong results for the remainder of 2025 and beyond.

So with that, I’ll turn the call back over to John.

John Bedford, Vice President of Investor Relations, Danaher Corporation: Thank you, Rainer. Operator, that concludes our formal comments. We’re now ready for questions.

Margo, Conference Facilitator: We’ll take our first question from Michael Ryskin with Bank of America. Please go ahead.

: Thanks for taking my question guys.

Mike, Analyst, Bank of America: And I want to be the first to congratulate both Matt’s on current and future roles. It’s great working with both of you and look forward to it. Ryan, I want to start on just I want to start on the order trends commentary real quick on bioprocess. You had some really positive commentary in terms of positive trends in the order book continuing, especially in the consumables. I was wondering if you could dive into that a little bit more in terms of what the book to bill was, whether you saw orders accelerate from the first quarter, just sort of expectations for order trends in the third quarter, any color you can provide maybe by biotech versus pharma, just any additional color you can provide on bioprocess trends?

Thanks.

Rainer, CEO, Danaher Corporation: Thanks, Mike. Good morning. And let me put the order trend right into the context here of some of our comments. Think first it’s important to note that our biotechnology segment consists of two businesses. One is the bioprocessing business, which is the 6,000,000,000 annual revenue business that you were just asking about.

And then the other is the discovery and medical business, which is a $1,000,000,000 business. And that business, the Discovery and Medical, behaves a lot more like a life science tools business. Now to your point here, let’s talk about bioprocessing and work through to the orders development here. So first of all, the performance and trends in Q2 were very consistent with what we saw in Q1. Consumables continued to lead the way globally with low double digit growth in consumables, really driven by commercial demand and large pharma CDMO customers.

Smaller customers, while they were stable, are still below historical trends or historical levels. Now equipment remains below those historical trends with funnels improving. So we’re seeing better funnel activity, but we continue to see order delays with trade policy creating some incremental noise here and probably slowing some decision making. Now overall, our book to bill was consistent with prior quarters and around one, with some lumpiness in equipment orders. And overall orders activity in the first half and second quarter are fully supportive of a high single digit core growth in the second half.

So if you put all that together here, and I think it’s important to also comment on the top line performance here, which continues to drive strong profitability with fall through of over 50% in bioprocessing in the first half. So when you put all that together, we’re really encouraged by the strong first half. We expect high single digit growth in the second half of the year. And all this reaffirms our belief that bioprocessing is a high single digit grower, both in 2025 and the long term.

Mike, Analyst, Bank of America: Okay, thanks. And I want to touch on something you also brought up a couple times. You mentioned global trade tensions a few times in the prepared remarks. You just touched on it in your prior answer. If you could expand on that, where you’re seeing it?

Is it sort of what regions geographically and also what customer segments, whether it’s pharma or some of the more industrial or applied markets? Is it pausing of orders? Is it cancellations of orders? Is it delays of new orders? Sort of how are you seeing those dynamics play out?

And do you expect a recovery in that or improvement in that as we go through the rest of the year and we have sort of continued discussion on the tariff front? Thanks.

Rainer, CEO, Danaher Corporation: So Mike, I think there’s a general overlay here of trade uncertainty as it relates to how the tariffs will play out. If we think about the different end markets, in pharma, certainly as we pointed out, this market continues to grow over time. There is going to be a need for capacity expansions. And now pharma companies have to ask themselves the critical question as to where they’re going to build that new capacity. And of course, that’s hard to do if you don’t know yet what the tariff situation ultimately plays out to be.

But we would expect that that overhang here clears here certainly in the next six to twelve months. That’s certainly our planning assumption. So that is an overlay on pharma. As it relates to the applied and clinical markets, I think that’s less of a factor. So clinical markets, see volumes remaining fairly consistent.

Capacity increases are more incremental in that regard. And as it relates to applied markets, I would say the same thing.

: Great, thanks. I’ll leave there.

Rainer, CEO, Danaher Corporation: Thanks, Mike.

Margo, Conference Facilitator: And we’ll next go to Doug Schnicknoll with Wolfe Research. Please go ahead.

: Good morning. Matt and Matt, congrats, and thanks for all the help. And thanks to the broader team for giving us some time this morning. So, I just want to talk about bioprocessing a little bit more. And I really just want to clarify your bioprocessing assumptions that are embedded into guidance.

So first, you had previously told us to expect high single digit bioprocessing revenue growth for the year. Is that still the case? Second, you got 2.5 points of price in the biotech segment in Q2. What is your assumption for pricing for the second half within this segment? And what does that imply regarding volume pacing?

And then third, really more to the point, it seems like you may have increased bioprocessing guidance while reducing D and M assumptions. And you kind of referenced this in your response to Mike. I just want to see if that’s the case. Thank you.

Matt McGrew, CFO, Danaher Corporation: Yeah, Doug. Maybe I’ll take a first stab at it. So, kind of to your first part of the question on bioprocessing, I think the simple answer is yes. High single digits is still our guide for the year for the bioprocessing piece. Again, just for folks, that’s $6,000,000,000 of the $7,000,000,000 in the segment.

So that we are still expecting to see high single digits. I think your second question was around price and what we saw here. So I think we saw about, call the first half 1.5%, 2% kind of price is what we saw in the segment. I think we’re probably going to do roughly the same, maybe a little bit better here in the second half from a price perspective in the segment. And so from a volume pacing perspective, which I believe you asked about as well, we really we will see Q2 kind of step down in Q3, very traditional for us to have a kind of a volume step down in Q3.

We do some work on some of our plants and we typically Q3 is our lowest volume quarter. And you see that both in you see it really in the margins too, in bioprocessing Q2 to Q3. But then you step right back up, Q4 is our best quarter in bioprocessing. So I would expect to see the same kind of cadence on that. And then lastly, I think it was on just sort of maintaining the full margin, the full guide for the year on the segment.

I think that’s right. I think on the margin you’re probably a little bit lower at D and M, but we’re probably a little bit better here in bioprocessing in that $6,000,000,000 piece. So again, it’s on the margin. It’s not huge, but we are we would maintain the guide for the full year for the segment, little better in bioprocessing, maybe a touch worse in D and M. And as Reiner said, that D and M piece is very different than bioprocessing.

Kind of acts almost like a life science tools business to some degree.

John Bedford, Vice President of Investor Relations, Danaher Corporation: Great. Thank you.

: And next we’ll go

Margo, Conference Facilitator: to Scott Davis with Melius Research. Please go ahead.

Scott Davis, Analyst, Melius Research: Hey, good morning, guys. And I’ll echo my congrats. Ryan, you’re lucky to have two rock stars with you there. Three including John, sorry, John.

Rainer, CEO, Danaher Corporation: Totally agree, totally agree. Thanks, Scott.

Scott Davis, Analyst, Melius Research: Hey, just first just to clarify something, is the structural cost out part of the story, is that behind us now?

Matt McGrew, CFO, Danaher Corporation: Yeah. I mean, think it’s we feel very comfortable and confident that we are going to get all of that 150,000,000 I think we’ve probably got about half already, Scott, and the other half will come as we work through the second half. But I feel very comfortable with that.

Scott Davis, Analyst, Melius Research: Okay. And I’m actually just kind of curious of your view here. I mean, stage biotech, and just trying to get a sense of what you think this is going to how this is going to play out in the next couple of years. But is this a case of where kind of AI spend is crowding out perhaps some of the opportunities? Is there pent up demand here?

I mean, just kind of are we still going be talking about this in twelve months, I guess, is my question. And I’m just kind of curious how you guys view the market.

Rainer, CEO, Danaher Corporation: I would say that if we just look where we are today, biotech is at lower activity levels, stable. The investment environment has been tough here with the amount of venture capital that goes into these biotechs slowing and those that are already out there really needing to focus on those therapeutic programs that show the best data. And I think that is representative of what has been going on here more generally in the sector that the enormous wave of investment that we saw during and just after the pandemic has waned. And the market is now finding its footing. Now, as it relates to AI, we really see that ultimately as a tailwind because we see then less money being spent on getting to compound ideas, if you will, and more money being spent taking great ideas, which have been validated in silico, as they say, through the development pipeline, ultimately driving more manufactured and commercialized therapies.

And of course, that’s where our business is, where we have the most volume, of course, the most share. And so we view this really positively. But we have to say that we’re at a low activity level currently in the discovery phase of the biotech market.

Scott Davis, Analyst, Melius Research: Okay, good color. All right, I’ll pass it on. And congrats again, Matt and Matt.

Rainer, CEO, Danaher Corporation: Thanks, Scott. Scott.

Margo, Conference Facilitator: Next, we’ll go to Tycho Peterson with Jefferies. Please go ahead.

Rainer, CEO, Danaher Corporation: Good morning, Tycho.

: Hey, thanks. Good morning. I want to probe a little bit on the guide. So you’re not flowing through the entire EPS beat. I’m just curious if there are areas of maybe incremental caution in the back half of the year.

And then on 4Q specifically, you’ve got a step up in Life Sciences, I think kind of ramping to mid to high single digits and the comps there are more difficult. So just curious if you can get us more comfortable with that in particular. Is that contributions from the new SCIEX launches at ASMS?

Matt McGrew, CFO, Danaher Corporation: Yes, that’s a piece of it. Maybe I’ll let Rainer kind of take the second half piece because he can talk about some of like you said, some of the new stuff that’s out there. But maybe I’ll take the first question, which is sort of on the guide and the flow through. So, maybe I’m kind of sort of thinking about the guide like this. So we got off to a pretty good start in the first half, both on cost actions, like I said to Scott earlier, feel very comfortable with where we are on those.

And we had a little bit better FX as well. Probably FX was maybe a nickel better for us. And like I said, I think we get the full cost actions, which is probably 15¢ or so. And so, I kind of look at that, say 20¢, and that’s what we flowed through to the full year. So all the cost actions in the better first half FX.

So we started in January, we’d call it $7.60 as sort of the range, put the $0.20 on top of that, and that’s how you get to kind of the high end of the range now at $7.8 But there are two other things here that I think you’re right, we have not flowed through fully. I think maybe the easiest way to think about it is, one, we had a good start in respiratory in Q1 and Q2, and two, FX. In the second half, that’s going be much more favorable than we thought in January. And so I think the combination of those two, maybe probably another $0.15 $0.20 that has not flowed through. And the reason we haven’t flowed it through is one, we’re going to maintain the full year respiratory guide at $1,700,000,000 See how that plays out in Q3 to Q4.

That is a variable number. And that affects us the same. That could fluctuate and come back. That has made a significant movement since January, and that could very well come back. And so, we’ve decided now to hold back on Respiter, hold back on the second half FX, and just kind of see what happens, especially in a pretty dynamic policy and operating environment.

Just felt like we’ll sit and see how things play out before we commit to that final $0.15 to $0.20 And

Rainer, CEO, Danaher Corporation: to the second part, Tycho, I mean, what we’re really saying is the first half in the life science segment was down low singles. We expect the full year to be flat. So the second half needs to be up positive low singles. And what we’re really seeing there is the impact of three factors. The first is, and we’re actually not assuming a significantly improved activity level.

So in genomics, we expect to see better comps as an example. So in China, we’re seeing it’s incrementally firmer with some stimulus dollars following through. And then as you suggested, we have a number introductions that are gaining traction in our funnels here in the first half, including SCIEX and Beckman Coulter Life Sciences and some others. And so we expect those to gain traction here in the second half.

Matt McGrew, CFO, Danaher Corporation: Maybe to put some numbers around it for you, Tycho, you’re sort of best step up from one half to two half to go from down low single to up low single life sciences, call it $150,000,000 roughly. And I think if you are kind of trying to bridge that, I would say that genomics, again, remember the first half we had those two large customers really fall off. I think that’s probably a third of it. I would say that we are assuming China, especially China and tools with some easier comps and a better funding environment is another third of it. And then lastly, products and kind of other things is the final third.

So, a third, a third, a third between China, genomics, new products, other, that’s sort of what we’re assuming and have baked into the model from step up from one half to two half of roughly $150,000,000

: Okay. That’s helpful. And then one quick follow-up. It sounds like you’re not flagging any incremental headwinds volume based procurement. Obviously, one of your periods did last week.

Maybe just get us comfortable that that’s not a lingering issue that could get worse.

Rainer, CEO, Danaher Corporation: So in China, volume based procurement and the reimbursement changes was essentially what we thought in Q2 and for the first half of the year. In fact, volume was consistent with Q1 and our expectations. So there’s really no change to our expectations of 150,000,000 adverse impact from volume based procurement in 2025. Now, under the hood there, there’s been some recent policy changes, which largely did not affect us, because they’re really geared to different aspects of the testing menu, which we actually don’t have. So it’s possible that different companies experience different things here.

But for us, we saw the quarter develop as expected, volumes were consistent with Q1, and we don’t have a different perspective on $150,000,000 here for the year on volume based procurement.

: Okay. That’s helpful. Thank you.

Rainer, CEO, Danaher Corporation: Thanks, Tycho.

Margo, Conference Facilitator: Next, we’ll go to Vijay Kumar with Evercore. Please go ahead.

Vijay Kumar, Analyst, Evercore: Good morning, Vijay. Hi, Rainer. Good morning and thank you for taking my question. Congrats to both Gurgino and Luburu. Maybe one on biotech for you, Rainer.

Guidance, 7% was maintained. If you look at your second quarter and third quarter assumptions here for 6%, implied growth for Q4 should accelerate to high singles, maybe 8% to 9% -ish. What is the guidance you mean for Q4 acceleration in biotech? Is that maybe China coming back, small biopharma coming back, or maybe exocrine turning around?

Matt McGrew, CFO, Danaher Corporation: No, I think I would say that we’ve got high single digit core for both Q3 and Q4. I don’t know that there’s any real material changes that we have tried to bake in by a certain geography or in equipment or anything like that. Would say we’re just assuming a fairly steady environment, which is we’ve seen really good double digit type growth out of consumables. Equipment has been pretty muted and we expect that to continue here throughout the back half of the year as we work through. So I don’t think it’s a massive change for us.

Rainer, CEO, Danaher Corporation: Yeah, this is not about a step up in activity level. This is just the normal seasonality, BJ, that you see with Q3 being sort of the lowest level of activity in bioprocessing and some other markets as well. And then as the fourth quarter kicks in, that’s always been and continues to be the largest quarter for us from an activity level.

Vijay Kumar, Analyst, Evercore: Understood. Then maybe my follow-up sort of related question here. Was there any pull forward either in academic channels or biopharma channels that that question comes up you know because of tariffs, was there any customer change in customer behavior? And I think given all of these macro situations right, is this bioprocessing sort of high single, is this now a sustainable number? Or is macros still sort of an overhang when you think about ’26?

Rainer, CEO, Danaher Corporation: So Vijay, we haven’t seen any meaningful pull forward. We just haven’t. We’re often asked and our numbers and our surveys and our customer conversations don’t indicate that. We think the bioprocessing market has for years and the activity levels continue to confirm that this is a high single digit growth market, and that’ll continue. Now, as it relates to 2026, we obviously have still half a year ahead of us in what is a pretty dynamic operating environment with some questions that still need to be answered, as I spoke to earlier.

But it is our plan to provide some preliminary thoughts on 2026 for Danaher overall during our October earnings call. So we just want to see here how the third quarter plays out. And then in October, we’ll give you our preliminary thoughts on ’26.

Vijay Kumar, Analyst, Evercore: That’s helpful. Thank you, guys.

Rainer, CEO, Danaher Corporation: Thanks, Vijay.

Margo, Conference Facilitator: Next we’ll go to Puneet Souda with Leerink Partners. Please go ahead.

Rainer, CEO, Danaher Corporation: Good morning, Puneet. Yeah, hi.

John Bedford, Vice President of Investor Relations, Danaher Corporation0: Thanks, Reinhard. And my congrats also. Just wondering, I know you talked about tariffs, but just I wanted to clarify, you previously sized at about $350,000,000 in tariff costs with room to mitigate by supply chain and optimization. Can you talk to us about the updated number there? And just given the inter quarter changes with U.

S.-China trade policy and the 145 tariffs going to now 30%?

Matt McGrew, CFO, Danaher Corporation: Yeah, I would say that from a number perspective, we’re still at kind of a couple $100,000,000 of exposure right now today. That’s what we would think of. As far as versus the three fifty, mean, that obviously could change in very short order. As far as China and the tariff there, We’ve got a lot of different things that we can do both internally that we have control over and also other levers that were available to us within the quarter that we’re able to use to effectively not have to charge our customers a tariff. So we took advantage of those levers.

So therefore, from our perspective, as we’ve always said, we plan on offsetting all the tariffs and we only plan on offsetting them. If we have to pay it, we will try and pass that along somehow, some way. But if we don’t pay it, we’re not going to try and pass it along. So that was a net neutral event for us in China.

John Bedford, Vice President of Investor Relations, Danaher Corporation0: Got it. Thanks, Matt. And then just briefly on a question that is on minds of investors, given the impact that has happened in the gene therapy market. One of your customers have seen suspension of their therapies from FDA on safety concerns. The question is, how broad is the exposure to gene therapies?

And I totally recognize that innovation doesn’t come with risk without risk. So just how are you thinking about this risk overall and the AAV exposure that you have with respect to Aldevron and also the Cytiva segment as well? Thank you.

Rainer, CEO, Danaher Corporation: Gene therapy, so AAV based gene therapy, as you were just suggesting, is really in the early innings, Puneet. This is going to have its vacillations, two steps forward, one step back. Of course, what we just saw here in the news is a step back. But it’s not to say that that therapy is not a very interesting and important alternative here for all kinds of different disease forms that are out there. So specifically some genetic diseases.

So I think as we think of the broader picture, genomics is in the early innings and has the potential to be an exciting and effective treatment regimen. Now, as we think about our own exposure here across Danaher, we’re not talking about more than a couple $100. Keep in mind, we’re a protein house here with really 85% of what we do focused on proteins. Of course, that’s a well established market and that’s what drives our business and our earnings. Now, we typically talk about these things more narrowly, but if we think about our guidance, and you mentioned Sarepta here and Aldevron, our guidance in the market is essentially playing out as we expected, but Aldebron Sarepta revenue, we expect to be $30,000,000 for the full year with a minimal contribution here in the second half.

So our guide contemplated and did not expect significant revenue contribution from that particular therapy.

John Bedford, Vice President of Investor Relations, Danaher Corporation0: Got it. Helpful. All right. Thank you.

Rainer, CEO, Danaher Corporation: Thanks, Puneet.

: Thank you. And next, we’ll go to

Margo, Conference Facilitator: Dan Leonard with UBS. Please go ahead.

Rainer, CEO, Danaher Corporation: Good morning, Dan. Good morning. I was hoping, Rainer, that you could elaborate on trends in China outside of diagnostics. Is that business turning a corner? And if you could elaborate further, because you touched on it briefly a few times in the prepared remarks.

So our China business outside of diagnostics has been firming up. The bioprocessing business has shown a slight growth here in the quarter. And we see the biotech and pharma market there showing some more solid activity levels. So we do see that in bioprocessing. As we think of life science tools, we did see more stimulus activity and that flowing through not just to orders and to revenues, it’s still not at normal activity levels, but we do see it firming up.

So we’re encouraged by what we see here for those two businesses. And that’s reflected here in our second half view. You’ll recall Tycho’s question here, the firming up of China in life science tools is a part of that. Thank you. And just a clarification question for Matt McGrew.

Matt, did I hear you correctly that at current foreign exchange rates that your guide would be $0.15 higher?

Matt McGrew, CFO, Danaher Corporation: With both the respiratory and the current FX, probably $0.15 $0.20 I’m not sure I’d say that the guide is higher, but that’s what the math would imply, that we have not, if you would, not flowed through.

Rainer, CEO, Danaher Corporation: Understood. Between

Matt McGrew, CFO, Danaher Corporation: those two, $0.01 5 to $0.02 0 and we haven’t flowed that.

Rainer, CEO, Danaher Corporation: Thanks a bunch.

Matt McGrew, CFO, Danaher Corporation: Thanks, Sam.

: Thank you. And next we’ll

Margo, Conference Facilitator: go to Dan Brennan with TD Cowen. Please go ahead.

John Bedford, Vice President of Investor Relations, Danaher Corporation1: Great. Thanks for the questions. Matt and Nat, obviously congratulations. Ryan, I wanted to just go back to bioprocess orders, if you don’t mind. I just wanted to confirm sort of Mike’s earlier question.

I think you said the book to bill was around one, equipment more lumpy. I mean, if I look back at the first quarter transfer, I think you talked about the seventh consecutive quarter of a book to bill that was solidly over one. I’m not trying to nitpick it, just trying to clarify maybe that was related to consumables. Just maybe if you can expand upon that a bit.

Rainer, CEO, Danaher Corporation: So the trends are really very comparable here. I would tell you that this book to bill is not a perfect measure. And that lumpiness, especially with larger orders, sometimes does not play through. So what we see here is consistent with what we’ve seen in prior quarters. It’s around one.

And yes, we saw some lumpiness here in equipment and some larger orders. The activity level is Okay. Very

John Bedford, Vice President of Investor Relations, Danaher Corporation1: And then maybe moving over to Cephia, and I know you had a nice quarter, it was low double digits ex COVID. Could you just speak to kind of what’s baked into the twenty five percent guide? How we think about that low double digits continuing or changing as we get into the back half of the year? I know you gave some color in the prepared remarks, but any further color there would be great. Thanks.

Rainer, CEO, Danaher Corporation: Sure. Well, as you said, overall CEPI had exceeded our expectations on a little bit better respiratory and double digit non respiratory growth. In fact, as non respiratory reagents grew low double digits in the quarter, second quarter. And we did see strength across the test menu with double digit or better growth in sexual health virology and hospital acquired infections. And we actually expect that strong non respiratory demand to continue in the low to mid teens for the full year.

And the reason is we continue to expand that installed base, particularly at large IDNs that are standardizing across their network as they go a little bit closer to patients in their satellite settings. And it just shows how Cepheid strategy is playing out. I mean, we see increasing menu adoption and utilization of the existing installed base, and we continue to expand that. And then with that, we see the pull through of assays such as the hospital acquired infections and virology. And then lastly, this recent menu expansion around our MVP, so that’s the multiple vaginitis test.

That’s up over seventy five percent in The US. So we feel very good about the non respiratory portfolio continuing to track at higher growth levels, mid teens.

: Thank you. And next we’ll

Margo, Conference Facilitator: go to Rachel Vatzendel with JPMorgan for our last question.

Rainer, CEO, Danaher Corporation: Good morning, Rachel.

John Bedford, Vice President of Investor Relations, Danaher Corporation2: Great. Good morning, you guys. Thanks for taking the questions. I wanted to echo everyone’s earlier comments, and congratulations to both of the maps here. So my first question, I just wanted to dig on to some of the trends on bioprocessing equipment.

You’ve highlighted that revenues were weak and orders were lumpy in the quarter given some of that global trade uncertainty, but you said that the funnel remains strong as well. So if we look at some of these press releases on companies building on additional capacity, I just wanted to get your thoughts on how are you thinking about the timing of recovery on bioprocessing equipment given those dynamics? Are you assuming recovery in equipment in the back half of the year on a revenues basis? And then how are you thinking about the opportunity for onshoring and reshoring longer term?

Rainer, CEO, Danaher Corporation: Thanks Rachel. Well, it is as you suggested here that larger projects are in discussion. And the decisions are being delayed, certainly for the reasons I talked earlier, trade policy, tariffs, a couple other points. What’s also important to note is that the reality of this is that it takes a number of years to build new pharma manufacturing plants. And building that capacity is going to take some time.

So it’s really too early to determine what all these large announcements will, how they play out and when that money flows. Now that said, I mean, Saitiva is very well positioned here to capitalize as these decisions start being taken and move through their CapEx processes. Because of the breadth of our portfolio, our scale, and of course the global footprint, can do this anywhere in the world. Now, to your point earlier about how do we think about the guide for ’twenty five here, we expect 2025 is going to be a down year for equipment. And so we do not expect in our guide a significant step up here.

When I talk about the improved funnel activity, what we do expect here is the continued small capacity expansions that you see where the decisions are much easier to make in existing plant footprints. And we’ll see as we get to October here, we’ll talk a little bit more about how we’re thinking about 2026.

John Bedford, Vice President of Investor Relations, Danaher Corporation2: Great. And then for my follow-up, I wanted to dig on respiratory a little bit more. So you raised the endemic rate on respiratory to $1,700,000,000 earlier this year. You typically see that split roughly fifty-fifty between the first half and back half. So just given you’re tracking to $900,000,000 at this point, that’s slightly ahead of expectations relative to the $1,700,000,000 assumption for the year.

Now I know it’s too early and you guys are kind of pushing towards that 3Q call in terms of how you’re thinking about respiratory assumptions. But just can you walk us through, would you consider revisiting that endemic rate as we get towards year end? Would you potentially revisit it for a fifth time? And then can you remind us what are you currently assuming on that $1,700,000,000 number in terms of the mix on four in-one versus COVID only tests?

Matt McGrew, CFO, Danaher Corporation: Yeah. I mean, I think the way to think about respiratory is we’ve got a guide that is 1.7. We’ve been kind of guiding to that really for the last probably three years. And it’s been a little bit better the last couple of years. And we are not that is not a number that we are completely bold to.

I think if we start to feel as though that number is a little bit higher, we would sign up to that. And so I think we’ve had those conversations. I think I’d like to see how this year goes. This year started in January. That felt much more like a typical respiratory season.

It did get a little higher for a peak higher there, but it followed a more similar pattern than we had seen before. And so I think if we can get another year behind us, we’d be open to revisiting that number for sure. And as far as the 1.7, like you said, we’re a little north of $900,000,000 We’ll see how Q4 plays out. That’s usually the big quarter, Q4 and Q1, as you know, and see also the difficulty with respiratory straddling sort of two years does make it a little bit difficult. So that’s kind of where we’re at.

And four in one, I think we’re at this point probably seventy five percent, eighty percent four in one. We do do some regular COVID only, typically mostly I shouldn’t say a lot of it is in Europe, but there is some in The US too that will do that. But that’s basically been our mix for the last couple of years.

Margo, Conference Facilitator: Thank you. And I’d now like to turn the call over to John Bedford for any closing remarks.

John Bedford, Vice President of Investor Relations, Danaher Corporation: Thank you, Margo, and everybody. We’ll be around all day for questions. Bye.

: Thank you. And ladies and gentlemen,

Margo, Conference Facilitator: that does conclude today’s program. We thank you for your participation. You may disconnect at any time.

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