Danaher (DHR 0.98%) reported its second-quarter 2025 results on July 22, 2025, with sales of $5.9 billion and core revenue growth of 1.5% year over year. Adjusted diluted EPS grew 5% to $1.80, free cash flow hit $1.1 billion, and management raised full-year adjusted diluted net EPS guidance to $7.70–$7.80. The call addressed the company's CFO succession plan, sector-specific momentum, and notable tariff and China headwinds, and reaffirmed a high single-digit percentage long-term core growth outlook for bioprocessing.

Bioprocessing growth accelerates for DHR

Danaher’s biotechnology segment, anchored by its $6 billion bioprocessing business, reported 6% core revenue growth, led by low double-digit percentage consumables growth and robust order trends, particularly from large pharma contract manufacturers. Although equipment sales declined and global trade volatility suppressed larger-scale capital decisions, bioprocessing’s profitability in the first half of 2025 was strong.

"Consumables continued to lead the way globally with low double-digit growth in consumables really driven by commercial demand in large pharma CDMO customers. … Now, equipment remains below those historical trends, with funnels improving. … 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."
— Rainer Blair, President & CEO

Sustained high growth in consumables, despite capital spending pauses, significantly enhances Danaher’s recurring revenue visibility. This secures the bioprocessing franchise’s role as the company’s primary long-term growth driver.

DHR mitigates tariff headwinds, neutralizing risk

Management indicated current direct tariff exposure has dropped to “a couple hundred million dollars,” said Blair, down from prior estimates of $350 million, largely through strategic internal supply chain adjustments and flexibility in charging customers. The company continues to offset tariff headwinds on China-originating goods, and credits its ability to reconfigure operations and purchasing pathways for minimizing net financial impact.

"As far as, you know, kind of China and the tariff there, you know, we've got a lot of different things that we can do, both internally that we have control over and then also other levers that were available to us within the quarter that we're able to use to effectively, you know, not have to charge our customers in tariff. And so we took advantage of those levers. And 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 off. So that was a net neutral event for us in China."
— Matt McGrew, CFO

This reinforces Danaher’s ability to deliver stable margins and protect free cash flow in unpredictable environments.

DHR leverages high recurring revenue for resilience

The business model’s structural resilience is highlighted by consumables and service revenue representing more than 80% of sales, with the majority of consumables embedded in regulated manufacturing processes and tied to installed equipment. This dynamic underpins cash-flow strength.

"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."
— Rainer Blair, President & CEO

The combination of high recurring revenue, robust cash generation, and reinvestment capacity positions Danaher for continued portfolio enhancement.

Looking Ahead

Management reaffirmed 2025 core revenue growth guidance of approximately 3% for the full year, with core growth in the low single-digit percentage range expected for Q3 2025 and an adjusted operating profit margin of approximately 25.5%. Full-year adjusted diluted net EPS guidance was raised to $7.70–$7.80, up from the prior $7.60–$7.75. Early color for 2026 will be provided on the October earnings call; there was no new formal long-term multiyear guidance issued in this transcript.