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Date

Jan. 28, 2026 at 8:00 a.m. ET

Call participants

  • President & Chief Executive Officer — Rainer Blair
  • Executive Vice President & Chief Financial Officer — Matt McGrew
  • Vice President, Investor Relations — John Bedford

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Takeaways

  • Annual Sales -- $24.6 billion, with core revenue up 2%.
  • Adjusted Operating Profit Margin -- 28.2% for the full year.
  • Adjusted Diluted EPS -- $7.80, an increase of 4.5%.
  • Free Cash Flow -- $5.3 billion, resulting in a 145% free cash flow to net income conversion ratio, marking the thirty-fourth consecutive year above 100%.
  • New Product Revenue -- Approximately 25% year-over-year growth in new product revenue across the portfolio.
  • Q4 Sales -- $6.8 billion, with 2.5% core revenue growth.
  • Geographic Q4 Performance -- Core revenues in developed markets grew low single digits; North America was flat, Western Europe increased mid-single digits, and high growth markets rose mid-single digits; China declined low single digits, but was offset by growth elsewhere.
  • Q4 Margins -- Adjusted gross profit margin was 58.2%, and adjusted operating profit margin was 28.3%, both down 130 basis points, driven by cost savings initiatives offsetting volume leverage.
  • Q4 Adjusted EPS -- $2.23, up 4% year over year.
  • Q4 Free Cash Flow -- $1.8 billion.
  • Biotechnology Segment Q4 -- Core revenue increased 6%.
  • Bioprocessing Q4 -- Core revenue grew high single digits: consumables up high single digits, equipment up mid-single digits; equipment orders increased sequentially for the third consecutive quarter, though below historical averages.
  • Life Sciences Segment Q4 -- Core revenue increased 0.5%; life sciences instrument businesses were essentially flat.
  • Life Sciences Consumables -- Revenue declined, driven by lower demand from two large customers and continued funding pressure across early-stage biotech and academic research.
  • Diagnostics Segment Q4 -- Core revenue increased 2%; clinical diagnostics grew mid-single digits, with Leica Biosystems and Radiometer each up nearly 10%.
  • Beckman Coulter Diagnostics -- Achieved mid-single-digit global core growth, led by high single-digit growth in immunoassay, marking six consecutive quarters of mid-single-digit or better growth outside China.
  • Molecular Diagnostics Q4 -- Respiratory revenue reached approximately $500 million, exceeding expectations as customers prepared for a heightened respiratory season.
  • Cepheid Core Non-Respiratory Menu -- Low double-digit growth, highlighted by nearly 30% growth in sexual health and mid-teens growth in hospital-acquired infection assays.
  • 2026 Core Revenue Guidance -- Management expects core revenue growth of 3% to 6% for the full year.
  • 2026 Adjusted EPS Guidance -- $8.35 to $8.50 for the full year.
  • 2026 Bioprocessing Outlook -- Anticipates high single-digit core revenue growth, driven by consumables and equipment revenues supported by backlog and order trajectory.
  • 2026 Respiratory Revenue Expectation -- Forecasts approximately $1.8 billion, assuming a normal respiratory season and consistent customer testing protocols.
  • Cost Actions -- $250 million in 2025 cost actions expected to contribute around $0.30 per share to 2026 earnings, supporting operating margin expansion.
  • M&A Readiness -- Debt to EBITDA below two, cash flow generation enables readiness for potential acquisitions; management describes the M&A environment as “more constructive.”
  • Abcam Performance -- Three consecutive months of growth in Q4, driven by recombinant protein sales in pharma; operating margin 500 basis points higher than at time of acquisition.
  • Biotech Market Sensitivity -- Emerging biotech represents about 15% of bioprocess, and roughly 5% of Danaher overall; main bioprocessing revenue remains anchored in commercial volume (about 75%).
  • Restructuring Actions -- “consolidating rooftops,” process efficiency improvements, and headcount reductions have generated long-term cost savings.
  • Innovation Highlights -- Cytiva released more than 20 new products; SCIEX launched the Xenotop 8600, offering up to 30-times higher sensitivity; Beckman Coulter introduced MosaiQ spectral detection, and Cepheid received FDA clearance for its GI multiplex PCR panel.

Summary

Danaher (DHR 4.09%) reported consistent core revenue growth across all major segments, supported by accelerated new product launches in biologics, diagnostics, and molecular testing. Management provided explicit guidance for 2026, projecting 3%-6% core revenue growth and adjusted EPS of $8.35-$8.50, underpinned by ongoing cost actions and stable end markets. Margins are expected to benefit from $250 million in cost savings, with free cash flow conversion continuing to outpace net income for the thirty-fourth consecutive year.

  • Cytiva’s new protein A resins and bioreactor innovations target manufacturing efficiency and cost reduction in biologics, supporting bioprocessing’s high single-digit growth outlook.
  • SCIEX’s launch of the Xenotop 8600 positioned the platform for greater adoption in proteomic drug development and disease research.
  • Cepheid’s multiplex menu expansion, including an FDA-cleared GI panel, reinforced its strategy to broaden the installed base and support double-digit non-respiratory growth.
  • Management cited a “more constructive” M&A environment and readiness for disciplined acquisitions, with balance sheet strength highlighted as an enabler.
  • Abcam performance improved sequentially, with management targeting ongoing cost alignment and exceeded margin objectives post-acquisition.

Industry glossary

  • Bioprocessing: Production processes, especially in biologics manufacturing, that use living cells or biological molecules to manufacture therapies, vaccines, or diagnostics at scale.
  • Monoclonal Antibody (mAb): Laboratory-produced molecules engineered to serve as substitute antibodies that can restore, enhance, or mimic the immune system's attack on cells.
  • Protein A Resin: Chromatography material used to purify antibodies, particularly monoclonal antibodies, during downstream bioprocessing.
  • Volume-Based Procurement (VBP): Policy influencing pricing and purchasing of healthcare goods (commonly in China) by leveraging volume commitments for lower prices.
  • Installed Base: The total number of units of a product (such as diagnostic instruments) currently deployed and active within customer organizations.

Full Conference Call Transcript

John Bedford: Thanks for joining us on the call. With us today are Rainer Blair, our President and Chief Executive Officer, and Matt McGrew, our Executive Vice President and Chief Financial Officer. I would like to point out that our earnings release, the slide presentation supplementing today's call, the reconciliations and other information required by SEC Regulation G, 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 dial-in replay of this call will also be available until February 11, 2026. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. 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 results from continuing operations and relate to 2025. 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. With that, I would like to turn the call over to Rainer.

Rainer Blair: Alright, John. Thank you, and good morning, everyone. We appreciate you joining us on the call today. We delivered a strong finish to the year with better-than-expected performance across the portfolio. We were particularly encouraged by continued strength in our bioprocessing business, along with improving momentum in diagnostics and life sciences. Our team's disciplined execution also enabled us to exceed our fourth-quarter margin, earnings, and cash flow expectations. Now during the quarter, end market trends across our businesses were broadly consistent with what we saw through the first March of the year. In pharma, global monoclonal antibody production remained robust, and we were encouraged to see a modestly more favorable capital spending environment.

We also continue to see a recovery in pharma R&D spending, while biotech demand remained stable. Academic and government demand remain muted but was stable sequentially, while clinical and applied end markets continued to perform well. Now I would like to take a moment to thank our associates for their efforts in 2025. They did a tremendous job leveraging the Danaher business system to navigate a dynamic geopolitical and policy environment while continuing to deliver for our customers and drive productivity gains across our businesses.

Their dedication and passion for serving our customers enabled the launch of innovative therapies and diagnostic solutions, drove share gains in many of our businesses, and reinforced Danaher's reputation as a trusted leader in life sciences and diagnostics. Now looking ahead, we expect the gradual end market improvements we saw through 2025 to continue, and we believe the combination of our differentiated portfolio, the power of the Danaher business system, and the strength of our balance sheet positions Danaher for long-term value creation as we move into 2026 and beyond. So with that, let's take a closer look at our full-year 2025 financial results. Sales were $24.6 billion, and core revenue increased 2%.

Our adjusted operating profit margin was 28.2%, and adjusted diluted net earnings per common share of $7.80 were up 4.5%. We also generated $5.3 billion of free cash flow, resulting in a free cash flow to net income conversion ratio of approximately 145%. Strong free cash flow generation is one of the most important metrics at Danaher, and 2025 marks the thirty-fourth consecutive year our free cash flow to net income conversion ratio exceeded 100%. Our earnings growth and strong free cash flow generation in the face of tariff-related cost pressures and significant productivity investments underscore the differentiated quality of our earnings and business models.

Now, our continued investments in innovation drove an accelerated cadence of new product introductions across Danaher in 2025. These new technologies are helping customers develop and manufacture therapies and diagnostic tests faster and more efficiently, ultimately helping to improve healthcare outcomes. In biotechnology, Cytiva launched more than 20 new products across the biologics workflow. Upstream, new 2,000-liter formats of the AcelRx X platform bioreactor are helping drive higher yields while reducing the time and cost of biologic drug manufacturing for our customers. Downstream, Cytiva strengthened its purification portfolio with the launch of two new protein A resins, MabSelect SURE 70 and MabSelect PRISMA X, delivering cost-effective solutions for preclinical and clinical production without compromising quality.

Now, these launches reinforce Cytiva's commitment to helping customers improve yields and lower manufacturing costs while maintaining high performance across the drug development life cycle. In life sciences, SCIEX reinforced their leadership in mass spectrometry with the introduction of the Xenotop 8,600. The 8,600 delivers up to 30 times increased sensitivity versus previous platforms, accelerating proteomic research and enabling faster understanding of disease pathways to help accelerate drug development timelines. Meanwhile, Beckman Coulter Life Sciences expanded its flow cytometry portfolio with the MosaiQ spectral detection module, bringing spectral capabilities to the CytoFLEX platform that enable flexible, high-precision, multi-parameter characterization for pharmaceutical researchers.

In diagnostics, Beckman Coulter Diagnostics expanded the DXi9000 assay menu, highlighted by progress in neurodegenerative disease, including the first-to-market automated high-throughput BD tau research use only immunoassay, while continuing to expand cardiac and blood virus menus. These advances, combined with sensitivity up to 100 times greater than traditional immunoassay systems, enable faster, more accurate patient diagnoses and help pave the way for precision diagnostics. Finally, last week, Cepheid received FDA clearance for its expert GI panel, a multiplex PCR test that quickly detects 11 common gastrointestinal pathogens from a single patient sample.

Leveraging Cepheid's advanced 10-color multiplexing technology on its GeneX installed base, this test simplifies GI testing workflows, helps guide appropriate treatment for high-risk patients, and can aid in reducing the risk of outbreaks in healthcare and community settings. This panel marks another step forward in Cepheid's multiplex testing strategy, building on momentum from the four-in-one respiratory panel, the MVP panel in women's health, with further multiplex introductions planned over time. So these are just a few of the innovations from across Danaher delivering meaningful customer impact while also driving clear financial results, including approximately 25% year-over-year growth in new product revenue. So with that, let's turn to our fourth-quarter 2025 results in more detail.

Sales were $6.8 billion in the fourth quarter, and we delivered 2.5% core revenue growth. Geographically, core revenues in developed markets increased low single digits, with North America essentially flat and Western Europe up mid-single digits. High growth markets were up mid-single digits, with solid growth outside of China more than offsetting a low single-digit decline in China. Our fourth-quarter adjusted gross profit margin of 58.2% and our adjusted operating profit margin of 28.3% were both down 130 basis points as the impact of cost savings initiatives more than offset the positive impact of volume leverage.

Adjusted diluted net earnings per common share of $2.23 were up 4% year-over-year, and we generated $1.8 billion of free cash flow in the quarter. So now let's take a closer look at our fourth-quarter results across the portfolio and give you some color on our end markets today. Core revenue in our Biotechnology segment increased 6%. Core revenue in Discovery and Medical declined at a single-digit rate in the quarter, driven by a difficult prior year comparison in our medical filtration business and by declines in protein research instrumentation as academic research customers continue to face funding constraints. Core revenue in bioprocessing grew high single digits, with high single-digit growth in consumables and mid-single-digit growth in equipment.

Consumables growth was supported by continued robust demand for commercialized therapies, particularly monoclonal antibodies. We were also encouraged by the return to equipment revenue growth in the quarter and by the third consecutive quarter of sequential equipment order growth. The orders remain below historical levels. Current momentum in our equipment order book and funnels is concentrated around shorter cycle projects such as line additions and brownfield expansions, with U.S. reshoring-related greenfield investments expected to provide incremental upside over time. Now given the sustained and substantial activity levels at our customers over the last year, we anticipate high single-digit core revenue growth in bioprocessing for the full year 2026.

Growth is expected to be led by consumables, with our current backlog and order trajectory supporting the equipment revenue improving to approximately flat for the year. So we see a bright future ahead for Cytiva. Underlying biologic demand, which is the primary growth driver of our business, has grown at double-digit rates annually for more than a decade, and we expect strong demand growth to continue into 2026 and beyond. This outlook is supported by another year of robust FDA approvals for biologic medicines in 2025 and increased uptake of existing therapies during this year, which taken together drove global biologic revenues to surpass small molecule drugs for the first time.

The development pipeline also remains strong, with biologics expected to represent more than two-thirds of the top 100 drugs by 2030. So these positive trends reinforce our confidence in the durability of long-term growth in the bioprocessing market and for Cytiva's leading franchise. Turning to our life sciences segment, core revenue increased 0.5%. Core revenue in our life sciences instrument businesses was essentially flat in the quarter. Looking across end markets, we continue to see a modest recovery in Pharma, particularly in Europe, while biotech demand remained stable. Academic and research demand was muted, especially in the U.S. and China, but was generally stable on a sequential basis. Clinical and applied markets remained healthy.

Core revenue in our life sciences consumables businesses declined in the quarter, primarily due to lower demand for plasmids and mRNA from two of our larger customers, as well as continued funding pressure across early-stage biotech and academic research. We were encouraged to see another quarter of sequential improvement at AFCAM as key commercial initiatives in pharma and recombinant proteins delivered solid growth, partially offsetting ongoing softness in academic research. Moving to our diagnostic segment, core revenue increased 2%. Core revenue in our Clinical Diagnostics businesses grew mid-single digits, with high single-digit growth outside of China. Notably, Leica Biosystems and Radiometer were each up nearly 10%, with broad-based strength across both instruments and consumables.

Beckman Coulter Diagnostics also delivered another strong quarter with mid-single-digit growth globally, led by high single-digit growth in immunoassay. This is Beckman's sixth consecutive quarter of mid-single-digit or better core growth outside of China and caps off a year of sustained momentum across its innovation and commercial engines. In molecular diagnostics, respiratory revenue of approximately $500 million exceeded our expectation, as customers purchased in anticipation of an active respiratory season given the high prevalence of currently circulating respiratory viruses. Over the past several weeks, we have worked closely with the team to better understand seasonal trends and revisit our assumption for respiratory revenue in a typical year.

As a result, we expect respiratory revenue of approximately $1.8 billion for the full year 2026. This assumes a normal respiratory season and that testing protocols at our customers remain broadly consistent with what we have seen the last few years. Low double-digit growth across Cepheid's core non-respiratory test menu was highlighted by nearly 30% growth in sexual health and mid-teens growth in hospital-acquired infection assays. This strong performance reflects continued traction in Cepheid's growth strategy, including new menu additions such as the MVP panel in women's health, enabling entry into new care settings, and existing customers continuing to add both menu and instruments across their healthcare networks.

So looking ahead, we are excited about the long runway for durable growth at Cepheid, supported by a robust pipeline for future menu additions and anticipated continued expansion of our leading global installed base. Now let's briefly look ahead at the expectations for the first quarter and the full year 2026. Looking across the portfolio, we are assuming bioprocessing growth will be similar to 2025, including continued strength in consumables, driven by healthy growth in monoclonal antibody demand and our strong positioning across the biologics workflow. In life sciences, we are assuming a modest improvement in end markets, but assume growth will remain below historical levels given the current macro environment.

In diagnostics, we are assuming higher growth in 2026 due to moving past the peak of headwinds from policy changes in China and our expectation that we will continue to execute well globally. For the full year 2026, we anticipate core revenue growth in the 3% to 6% range. Additionally, we are initiating full-year adjusted diluted EPS guidance in the range of $8.35 to $8.50. In the first quarter, we expect core revenue to be up low single digits. Additionally, we expect the first-quarter adjusted operating profit margin of approximately 28.5%.

So to wrap up, we are pleased with our solid finish to the year and proud of the work our teams did in 2025 to reliably support our customers through a dynamic macro environment. They did a tremendous job staying focused on what we can control, running the Danaher business system playbook to offset cost pressures and deliver productivity gains while continuing to invest in innovation for the long term. So looking ahead, we are encouraged by the momentum building across our portfolio and expect growth to accelerate as end markets continue to improve.

Our strong positioning in attractive end markets and high recurring revenue business models support our long-term expectation for high single-digit core growth with a differentiated margin and cash flow profile. So with the powerful combination of our differentiated portfolio, talented team, and strong balance sheet, all powered by the Danaher Business System, we feel well-positioned to create long-term shareholder value while making a meaningful positive impact on human health. So with that, I will turn the call back over to John.

John Bedford: Thank you, Rainer. That concludes our formal comments. We are now ready for questions.

Operator: Thank you. If you would like to ask a question, please press star 1 on your keypad. To leave the queue at any time, press star 2. Once again, that is star and 1 to ask a question. The first question comes from Michael Ryskin with Bank of America. Please go ahead. Your line is open.

Michael Ryskin: Great. Thanks for taking the question, guys, and congrats on the front. Rainer, maybe just to kick things off, you are opening with a 3% to 6% core revenue guide that's consistent with the kind of framework you laid out on the 3Q call. But if you look at the various segment details you provided, it looks like the segment levels, if you kind of do the sum of the parts, it gets you closer to that 3%, which you hinted in the past. I am just curious if you could talk about how much conservatism is embedded in that, or maybe what are the levers or what are the drivers you could see getting you closer to that six?

Where do you see potential for upside as you go through the year? If there's one segment or another that kind of sticks out to you?

Rainer Blair: Sure, Mike. Well, how about I level set first on the guide, and then I can talk to those upside levers. First of all, we had a good finish to 2025 with the business performing better across the board in Q4. That really reinforced that 3% to 6% core growth outlook that we talked about in October. Now we have converted that into our core growth guide, which is based on the expectation of continued recovery in our end markets. To your point, let me give you a little color on those. First of all, we expect bioprocessing to remain strong at high single digits. We had an excellent finish to the year.

In fact, I have just spent time out with customers and with our teams, and things are going really well for us there in terms of spec wins and orders, and, of course, sales as well. This momentum should lead to continued strength in consumables, and for equipment, we are encouraged by that momentum that we saw in the fourth quarter. We are assuming that equipment is flat for 2026, which is off of a mid-teens decline in 2025, but that is supported by our current backlog. As we think about life sciences and our discovery and medical businesses, we expect those to be flat, and we are assuming some modest improvement in our end markets there.

That said, we do expect growth will improve through the year as our own comps ease, particularly in our life science consumables businesses. Lastly, we expect diagnostics to grow in a low single digit. We are assuming consistent mid-single-digit growth outside of respiratory in China. With China, we think the volume-based procurement headwinds will moderate as we move through the year. In respiratory, we have taken a look at that number again here in terms of the endemic level, and we think that's probably fairly consistent with 2025. This is how we are setting up the year based on these improving end markets and some of the momentum that we saw coming out of Q4.

Now, Mike, to your point, as to upside levers, there's probably two larger drivers that are most relevant there. One is to see continued improvement across our life science end markets. We are seeing some of that. We want to see more of that, especially some of those policy headwinds that we are seeing here in the U.S. in particular. We would like to see that improved biotech funding environment fall through now to an increasing order book in that particular segment. So encouraged, but we do not see that yet. Then, of course, China continuing an acceleration in life science research would be helpful in those life science end markets as well.

The other level is bioprocessing, where seeing better than high single-digit growth for the year with equipment potentially accelerating or even consumables accelerating more as we see more biosimilars and mAb production increasing. Those would be two areas that could produce additional upside to the guide.

Michael Ryskin: Okay. That is helpful. If I could follow-up just on the bioprocessing outlook for 2026. Can you talk a little bit about the order book, maybe book to bill, how that shaped up in the fourth quarter? For consumables and for equipment? Just give us a little bit more clarity on the confidence that's driving that '26 outlook. You know, you still have easy comps and equipment, but a little bit tougher comps in consumables. So for both the equipment and the consumable side, what did the orders look like exiting the year and how that supports next year's outlook?

Rainer Blair: Sure. The order book fully supports the high single-digit growth that we have been talking about for 2026. As you know, the lead times have gotten much shorter on the consumable side, so having a book to bill there of around one is exactly where it needs to be. So we feel very good about that. We have talked about equipment orders increasing sequentially here the last three quarters in a row. Then, of course, we grew revenue in the fourth quarter, so we feel comfortable that we are starting to head in the right direction there in equipment as well.

But one quarter of growth, we are not ready to call that a trend yet, but the orders coming out of the last three quarters are encouraging.

Michael Ryskin: Alright. Thanks so much.

John Bedford: Thanks, Mike.

Operator: Thank you. We will move next to Tycho Peterson with Jefferies. Please go ahead. Your line is open. Good morning, Tycho.

Tycho Peterson: Hey. Good morning. Rainer, would love to just hear a little bit more about the strength on SCIEX and how much of that is the new product versus maybe end market recovery? What specifically are you seeing in end markets turn for the better there?

Rainer Blair: SCIEX did nicely with mid-single-digit growth here in the fourth quarter, and we are seeing a number of factors contribute to that. Certainly, innovation with the Xenotop 8,600 getting some nice traction, but we also see continued improvement in the pharma end market there at the third quarter in a row that we saw in life sciences, the pharma end market being at growth. The clinical and applied markets were robust as well. As you know, SCIEX is the gold standard there in PFAS testing as just one example. Lastly, I would say in the academic and government segment, that continued to be muted, so it's stable but not growing in the last quarter.

Generally speaking, we see the end markets continuing to improve, and that also contributed to SCIEX's performance in the instruments group there in the fourth quarter.

Tycho Peterson: Okay. Then maybe one for Matt on margins. We got the first-quarter operating margin guide, but how should we think about the flow-through of incrementals? You didn't really touch on the incremental cost-out initiatives on the call, but how should we think about a full-year margin target and progression throughout the year?

Matt McGrew: Yeah. I think the way I would sort of think about it is very similar to core growth. Right? So I think we are kind of starting out the year at low single-digit core growth, and that is going to sort of accelerate through the year, very similar to what we saw here in Q4. So you will see kind of a little easier comps here in life science consumables in the second half, some modest end market improvements in life sciences that Rainer just alluded to, put in the easier comps in China, DX, and respiratory.

I think what we will see is sort of that low single-digit growth kind of build through the year, and earnings are going to follow that. I think you will see that follow the trajectory of the core growth, with certainly the second half and the fourth quarter probably being the biggest beneficiary of the 2025 cost actions. So if you kind of go through that, I think you will see the second half is certainly building up, but that's largely almost all the benefit from the cost actions in the fourth quarter.

Tycho Peterson: Okay. Then just lastly, quickly on bioproduction. I appreciate all the incremental color. Any commentary specifically on China? There were mixed data points earlier this week from one of the companies that reported on China bioprocess. So curious if you are seeing anything abnormal there in terms of trend?

Rainer Blair: We are not. Our fourth-quarter bioprocessing business in China is coming off of a large comp, but the underlying activity level continues to strengthen there. You know that the biotech market there, in particular, has found some new momentum here as they are able to monetize some of those molecules that they are developing there, some new to the world, through licenses, through going public, and other types of monetization opportunities. So for us, bioprocessing should continue to have a positive development, and certainly, we expect China bioprocessing to grow in 2026.

Tycho Peterson: Thank you.

Operator: Thank you. Our next question comes from Scott Davis with Melius Research. Please go ahead. Your line is open.

Scott Davis: Morning, Scott. Hey. Good morning, guys. Seems pretty encouraging commentary, particularly around bioprocess. But guys, I want to back up a little bit. You did a fair amount of restructuring and such, and that can be defined in a lot of different ways. But can you help us understand a little bit of the postmortem other than just the margin impact? What did you actually do as it relates to other rooftops or headcount? Was there tangible change in fixed assets or anything that you can talk about publicly here?

Rainer Blair: Scott, I mean, this is traditional Danaher business system type of productivity improvement, where we are certainly consolidating rooftops but also driving process efficiency. Yes, that has resulted in reducing associates as well. We expect the cost savings that we have generated there to sustain here for the long term. As we noted in previous calls, those are pretty significant.

Scott Davis: Yeah. Okay. That's a good non-answer, Rainer. I get it. Understood. The flu season has been pretty nasty. God knows it's cold up here. Cold where you are at too. But are you seeing a big pickup in orders here in January? I know that you had a strong preorder season in April and such, but have you seen a pretty sizable reload as the cases have picked up?

Rainer Blair: Well, we certainly in the second half of the fourth quarter saw the cases pick up quite significantly. You probably noted that the IOLI being as high as it's nearly ever been. That was manifested then also in the respiratory beat that we showed in the fourth quarter. Now since then, we have seen that IOI come down. But testing continues to be robust, and we have put out the perspective that we expect our first-quarter respiratory to be around $500 million of revenue.

Scott Davis: That's helpful. Thank you, Rainer. Best of luck. Thank you. See you guys.

Matt McGrew: Yep.

Operator: Thank you. We will move next with Doug Schenkel with Wolfe Research. Please go ahead. Your line is open.

Doug Schenkel: Good morning, Doug. Starting on bioprocessing. Given the strength of equipment growth in the fourth quarter and favorable comparisons for really at least 2026, it's a smidge surprising you didn't guide for maybe a little more growth at that line. Was there any pull forward of demand into Q4? And or is this just maybe some extra prudence as we sit here in January in what's been a tough environment and an unpredictable environment over the last few years?

Matt McGrew: Yeah, Doug, maybe I'll take that. I think not too dissimilar to what we saw sort of on the consumable side maybe six or eight quarters ago. It's encouraging to see some growth, mid-single-digit growth out of the equipment, but it's just one quarter. One quarter, a trend does not make. I think we still are in that environment, similar environment like you talked about to where we've been.

So while encouraging in the fourth quarter, I just think it's, you know, until we have a little bit more a few more data points to point to on the equipment side, I think it's, again, kind of demonstrated ability over the past year that we're just going to go ahead and guide the flat. I think it's a good place to start. Let's see how the year progresses, and we'll go from there.

Doug Schenkel: Okay. That is helpful, Matt. Pivoting to capital deployment, the business is clearly stabilizing. You got solid free cash flow as always. Debt to EBITDA is below two. Can you just describe the M&A environment and your readiness and your priorities to potentially get a little more aggressive than you've been recently? I'm trying to get at whether or not you feel that you're in a better spot now than maybe you were a couple of quarters ago to move on something potentially more sizable and more aggressive if the opportunity were to present itself. Thank you.

Rainer Blair: Doug, I would say the M&A environment is more constructive. We have seen some valuations moving in the right direction. Interest rates have moderated a little bit, and our cultivation and our bias towards M&A and our cultivation of those M&A targets remain as strong as ever. As you point out, our cash flow generation not only is differentiated but puts our balance sheet in a place where we are able to act on opportunities. We are going to stick with our discipline of looking at end markets that we believe have long-term tailwinds, attractive assets within that market that have defensible value or value creation opportunities that we can compound over time.

Then, of course, the financial model has to work as well. We do see that continues to progress in the right direction. We like the setup. We see improving end markets. Our team is executing well as manifested by the fall-through that you see on the business and the cash flow. Of course, the balance sheet is prime.

Operator: Thank you. We will move next with Jack Meehan with Nephron Research. Please go ahead. Your line is open.

Jack Meehan: Morning, Jack. Good morning. Hope you're doing well. I want to push on a couple of the guidance assumptions a little bit. The first is in life sciences. So 2025 is obviously an unusual year in terms of customer spending patterns. I was curious about your thoughts on 4Q as a jumping-off point for 2026. Is it possible there were some push-outs from earlier in the year that might have come in around year-end? So, like, what can you build off of in April versus what might be like an elevated base? Any thoughts on that?

Rainer Blair: So, Jack, I think we continue to see improvement in the pharma end market. That would be the third quarter in a row that we have seen that improvement, and we would expect that to continue here going forward. The clinical and the applied markets have been solid and stable for several quarters, and we would expect that to be the same. I think in academic and government, that's where the activity level has been muted. We could still have a bit of choppiness ahead of us with the discussions that we hear currently in the market. But over time, we also expect that to moderate.

Generally speaking, we would expect the life science end market to continue their gradual improvement here through 2026.

Jack Meehan: Sounds good. Okay. Then Matt, I wanted to push a little bit more on the margin puts and takes for 2026. So you talked about the $250 million cost actions. You also have the biotechnology segment, your highest margin segment, growing the fastest. There's the VBP. Is there anything else that stands out? I'm just trying to think about the 100 bps.

Matt McGrew: Yeah. Or more for the year. Yeah. No. Maybe let me give you just a little color on how we constructed the EPS guide of $8.35 to $8.50 just to give you a simple frame of kind of what that is. I think that might be helpful. So we are assuming the low end of the core growth like we've talked about. So think 3% to 4%. Assuming 35% to 40% fall through. We have got a 30¢ benefit from the 2025 cost actions. So that's in that 100 basis points of margin expansion. It is inclusive of this 30¢ benefit. That, as you remember, was the Q4 actions plus the savings. So it's $250 million.

So that benefit is about 30¢. Then there's kind of some below-the-line stuff in FX, which, you know, obviously could go either way. So I just assume all that stuff kind of nets to zero. If you do that math, you get kind of $8.35 to $8.50. So if we do better from a core growth perspective, then 30% to 4%, you know, there's probably likely some upside here to EPS. But, you know, we're just going to kind of start the year with what I laid out. See how the year progresses, and then we'll go from there.

Rainer Blair: Thank you, guys.

Jack Meehan: Thank you.

Operator: Our next question comes from Patrick Donnelly with Citi. Please go ahead. Your line is open.

Patrick Donnelly: Good morning, Patrick.

Rainer Blair: Hey, guys. Thanks for taking the question. A follow-up on Jack there on the LifeSci business. Rainer, it sounds like things are improving across the board, Abcam, Aldevron, SCIEX. Can you just run through what you saw into year-end on that front? Was there a good budget flush? Then similarly, as we look at '26, it seems like that still flattish for the year. It feels like there's some upside there. Can you just talk through what you need to see to get that number going to a few percent growth? Again, we'd love to dig into some of those verticals, Abcam, Aldevron, in particular.

Rainer Blair: Sure. Let's start with the fourth quarter. Like we said, the Life Science business was a little bit ahead of our expectations there. That was led by SCIEX and technical life sciences. With what we saw the pharma end market in particular do a little bit better than anticipated. There was probably a little bit of a budget flush. We saw that especially in Europe. Not enormous, but we did see a little bit of a flush. We're not a great read-through read across for that. The size of our instrument business there. But nonetheless, we did see some.

Now as we think about '26, we expect that end markets such as pharma will continue to improve, that clinical and applied markets will stay stable. I think the upside that we're looking for in life sciences comes sort of out of two categories. One being in the academic and government area. We need to see more stabilization there around the spending discussions and the budgetary discussions. So that would be one point. Then we'd like to see biotech in particular take advantage of the improved funding environment that we've seen here over the last two, three quarters. Start seeing that fall through into the order book.

So that, I think, would be what we'd like to see to think about upside in the life sciences.

Patrick Donnelly: Yep. Then maybe just the Abcam piece, Rainer, you talked about seeing improvement throughout the quarter. It seemed like that was firming up a little bit. Just wanted to dig in.

Rainer Blair: I mean, we're really encouraged by what we're seeing here at Abcam. The business continued to improve here in the fourth quarter. In fact, we've seen now three months of growth, particularly driven by the recombinant protein in the pharma segment that we've been talking about. Of course, the team has been working very hard on rightsizing the cost picture there to the business and to our earnings expectations going forward. We see that. In fact, the operating margins are 500 basis points higher than when we acquired the business. So, like what we see here for Abcam and expect to continue to see that trend here in 2026 as well.

Patrick Donnelly: Understood. Then maybe a little bit of a longer-term one. Think as you build this year, it seems like again, Rainer, think you touched on the gradual recovery a few times. As we exit this year and move forward, it certainly feels like we're approaching more level of normalcy. What is the path back to the LRP that you guys have out there? Is that on the table as we look ahead? I know it's January '26, but as we look ahead to future years, what is the path there? What do you need to see to believe that's on the table next?

Rainer Blair: Well, I mean, would say it's too early to comment on 2027 and beyond. To the point you just made. Here's how we're thinking about it. I mean, fundamentally, our businesses are in excellent end markets. Those growth drivers that we've talked about are very much intact. We expect those growth drivers to continue to recover here. What are some of those? Well, the proliferation of biologics, some of the advancements that we see in life science research, and then, of course, the diagnostics area, bringing those diagnostics much closer to the patient. So, we don't see any change to our long-term framework. As these end markets continue to recover, we'll get back to that high single-digit growth over time.

Patrick Donnelly: Understood. Thank you, guys.

Rainer Blair: Gotcha.

Operator: Thank you. We will move next with Dan Leonard with UBS. Please go ahead. Your line is open.

Dan Leonard: Hi, Dan. Thank you very much for taking the question. You've talked a couple of times about the importance of an improving biotech funding environment on your life sciences business. Can you remind us how sensitive would the biotech business segment be to an improvement in biotech funding?

Rainer Blair: So that emerging biotech sector for us is traditionally been in the sort of 15% of the business overall. It's probably a little bit better. Yeah. Probably more like 5% of overall, Danaher, or 15% of bioprocess and 10, 15%. So, I mean, it's not it's there is some level of exposure, but it's not the majority of what we do, obviously.

Matt McGrew: Yeah. I mean, we'll Dan, just to just to reaffirm, most of our business in bioprocessing is driven by commercial volume. 75%, we talk about that. Then you have a mix of clinical and biotech in the remaining 25%. So let's say 10 to 15% is probably in the biotech area. We have been seeing some improved orders there in bioprocessing out of that space. But early days.

Dan Leonard: Understood. Thank you. A quick follow-up. Rainer, you mentioned the reshoring topic as a longer-term theme in bioprocessing. Can you update us on how any of those conversations with customers have been trending over the past three months?

Rainer Blair: Sure. I mean, as I mentioned earlier, I've been out in the market a great deal with our teams and meeting with our customers, pharma customers, CDMOs, CEOs, you name it. To get a real sense of what's going on here as it relates to the demand picture and the reshoring question. I think the takeaway here is that one, equipment investment has been muted here for the last couple of years. Despite the fact that demand has been fairly strong as we see in the consumables demand. But you have this aspect of the fact that there's probably some catch-up required here over time just to meet the existing demand.

Then you add on top of that the reshoring topic which continues to advance. There's no question that is going to happen. It's just a matter now of bringing that timing together. Again, it's a little difficult to pinpoint the timing, but demand. We've been encouraged certainly on the former aspect. So the need to keep up with in our order book here for equipment. We want to see how this now plays out going forward. But we really believe we could be in the early innings of a long-term investment cycle. As you know, we're really quite well positioned to support those investments going forward.

Dan Leonard: Thank you very much.

Rainer Blair: Thank you.

Operator: Thank you. We have time for one more question. That question comes from Dan Brennan with TD Cowen. Please go ahead. Your line is open.

Dan Brennan: Great. Thanks. Hey, good morning, Rainer and Matt. Thanks for the question. Maybe to start just back to bioprocess, if you don't mind. You know, with the biotech guide, it's 6% for the year. I think you guys talked about Discovery Medical flat. That gets us to bioprocess growth, I think, around 6%, which is a bit lower than what I think you guys did in '25. So is that math correct? I'm just wondering, would that imply, like, a bit of a slowdown that you're starting the year at for consumables? Given equipment is stronger? I know, Matt, you talked about conservatism. But this is such a focus.

I just want to kind of flush out how you're thinking about the starting point for the '26 guide.

Matt McGrew: Yeah. I'm making it very, very clear here. Bioprocessing on the consumable side for the year and for Q1, our assumptions are that will grow high single digits. It's probably going to be at the upper end of high single digits. We are assuming equipment is going to be flat for the year. Bioprocessing will be all up all in high single digits for the year. I think what you're probably referring to is if you look at bioprocessing, the statement, you've got discovery and medical in there as well. I think Discovery and Medical for Q1 we've kind of said it's going to be flat. It might be up a bit.

I think the rest of the year for discovery and medical is going to be flat, maybe down a little. To kind of balance that out, you're going to have high single digits out of bioprocessing. No change whatsoever to what we've seen in the end markets and no change to what we have been talking about for a while now. I think, really, the wild card is what does DNM do for the segment. But just to be perfectly clear, we are not seeing any sort of change or slowdown in bioprocess.

Dan Brennan: Okay. Great. Then maybe just final question just back to life sciences. I know Rainer, you gave a lot of color so far on the kind of moving pieces there, but academic, I don't know, maybe it's, like, 15% to 20% of life sciences, I'm guessing. So that remains muted. I know in your guide, you kind of mentioned ongoing macro pressure. But would think pharma is a big part of life sciences, and I would think with MFN and tariffs kind of us, hopefully, you could see a really nice recovery on easy comps from pharma. Could you just unpack a little bit, like, on the pharma piece?

Kind of what you're seeing in life sciences and kind of how you kind of guide in and, you know, is there the chance to get better in '26?

Rainer Blair: Thank you. So our life science end markets and order of priority and size are pharma, clinical, applied, academic, and government. Pharma has shown growth here for three quarters in a row in our business, and that's the recovery in investment that we've seen out of pharma once the most favored nation deals have come to fruition. More confidence has returned to that market. When we say we expect end markets in life sciences to continue to improve, we're referring specifically to the pharma end market. We expect the clinical, think of research use only, testing that sort of thing. We expect that to remain stable as do we expect the applied market to remain stable.

So, no significant change there. Those are robust. They're doing fine. Then you have academic and government that's muted. Softer, there's still some noise there. That represents another potential upside as the policy situation stabilizes and finds its momentum again.

Dan Brennan: Great. Thank you.

Operator: We have reached our allotted time for questions. I will now turn the call back to John Bedford for closing remarks.

John Bedford: Thank you, Nikki, and everybody. We're around for counts the rest of the day. Thanks. Thank you. This brings us to the end of Danaher Corporation's Fourth Quarter 2025 Earnings Results Conference Call. We appreciate your time and participation. You may now disconnect.