Danaher Q4 Earnings Call Highlights

Danaher (NYSE:DHR) closed 2025 with what management described as a “strong finish” and better-than-expected performance across its portfolio, driven by continued strength in bioprocessing and improving momentum in diagnostics and life sciences. On the company’s fourth-quarter earnings call, President and CEO Rainer Blair said disciplined execution helped Danaher exceed its expectations for margins, earnings, and cash flow despite tariff-related cost pressures and ongoing productivity investments.

Full-year 2025 results and cash flow

For full-year 2025, Danaher reported sales of $24.6 billion and 2% core revenue growth. Adjusted operating profit margin was 28.2%, while adjusted diluted earnings per share were $7.80, up 4.5%. Free cash flow totaled $5.3 billion, translating to a free cash flow-to-net income conversion ratio of about 145%.

Blair emphasized the company’s cash generation track record, noting that 2025 marked the 34th consecutive year Danaher’s free cash flow conversion exceeded 100%.

Innovation highlights and new product momentum

Blair said continued investment in innovation supported an “accelerated cadence” of new product introductions in 2025, which contributed to approximately 25% year-over-year growth in new product revenue. He highlighted developments across the company’s businesses, including:

• Bioprocessing (Cytiva): More than 20 new products across biologics workflows, including new formats of Xcellerex X-platform bioreactors and launches of MabSelect SuRe 70 and MabSelect PrismA X protein A resins.
• Life sciences (SCIEX): Introduction of the ZenoTOF 8600 mass spectrometry system, which Blair said delivers up to 30 times increased sensitivity versus previous platforms.
• Diagnostics (Beckman Coulter Diagnostics): Expansion of the DxI 9000 assay menu, including progress in neurodegenerative disease and a first-to-market automated high-throughput BD-Tau research-use-only immunoassay, alongside additions in cardiac and blood virus menus.
• Molecular diagnostics (Cepheid): FDA clearance for the Xpert GI Panel, a multiplex PCR test that detects 11 gastrointestinal pathogens from a single sample using the GeneXpert platform.

Fourth-quarter performance by segment

In the fourth quarter, Danaher posted sales of $6.8 billion and 2.5% core revenue growth. Core revenue 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 growth outside China more than offsetting a low single-digit decline in China.

Adjusted gross margin was 58.2% and adjusted operating margin was 28.3%, each down 130 basis points. Adjusted diluted EPS increased 4% to $2.23, and free cash flow in the quarter was $1.8 billion.

Biotechnology segment: Core revenue increased 6%. Within the segment, bioprocessing delivered high single-digit core growth, supported by high single-digit consumables growth and mid-single-digit equipment growth. Blair said consumables demand was supported by robust commercialized therapy demand, particularly monoclonal antibodies. He also noted a return to equipment revenue growth and a third consecutive quarter of sequential equipment order growth, though orders remained below historical levels.

However, discovery and medical core revenue declined at a high single-digit rate, reflecting a difficult prior-year comparison in medical filtration and continued funding constraints affecting academic protein research instrumentation.

Life sciences segment: Core revenue increased 0.5%. Instrument businesses were essentially flat, with Blair describing a modest recovery in pharma—particularly in Europe—while biotech demand remained stable. Academic and government demand stayed muted, especially in the U.S. and China, while clinical and applied markets remained healthy. Consumables declined, driven primarily by lower plasmid and mRNA demand from two large customers and continued funding pressure across early-stage biotech and academia. Blair pointed to sequential improvement at Abcam, led by commercial initiatives in pharma and recombinant proteins.

Diagnostics segment: Core revenue increased 2%. Clinical diagnostics grew mid-single digits, with high single-digit growth outside China. Leica Biosystems and Radiometer were each up nearly 10%, which Blair attributed to broad-based strength across instruments and consumables. Beckman Coulter Diagnostics posted mid-single-digit growth globally, led by high single-digit immunoassay growth, marking its sixth consecutive quarter of mid-single digit or better core growth outside China, according to management.

In molecular diagnostics, respiratory revenue of approximately $500 million exceeded expectations as customers bought ahead of an anticipated active season. Blair said the company revisited its assumptions for respiratory revenue in a “typical” year and now expects approximately $1.8 billion of respiratory revenue for full-year 2026, assuming a normal season and stable customer testing protocols. Cepheid’s core non-respiratory menu grew at a low double-digit rate, led by nearly 30% growth in sexual health and mid-teens growth in hospital-acquired infection assays.

2026 outlook: growth, margins, and key assumptions

For 2026, Danaher guided to 3% to 6% core revenue growth and initiated adjusted diluted EPS guidance of $8.35 to $8.50. For the first quarter, management expects low single-digit core revenue growth and an adjusted operating margin of approximately 28.5%.

Blair said the company expects bioprocessing to remain strong and projected high single-digit core revenue growth in bioprocessing for full-year 2026, led by consumables. Management said current backlog and order trajectory support equipment revenue improving to approximately flat for the year. In response to questions, executives said bioprocessing’s consumables book-to-bill is around one, reflecting shorter lead times, and they characterized sequential improvement in equipment orders over the last three quarters as encouraging but not yet a definitive trend.

For life sciences and discovery and medical, management expects results to be flat overall, with modest end-market improvement but growth remaining below historical levels due to the macro environment. Blair said potential upside would require more stabilization in academic and government spending and clearer evidence that improved biotech funding is translating into higher orders.

On profitability, CFO Matt McGrew said earnings progression should follow core growth, with the second half and fourth quarter expected to be the biggest beneficiaries of 2025 cost actions. He also said the EPS guide assumes the low end of the core growth range (about 3% to 4%), 35% to 40% flow-through, and about $0.30 of benefit from 2025 cost actions tied to roughly $250 million in savings.

Executives also addressed capital deployment, with Blair saying the M&A environment has become “more constructive,” citing valuations moving “in the right direction” and moderated interest rates, while reiterating Danaher’s focus on assets with long-term tailwinds and a financial model that works.

Overall, management said it remains encouraged by the momentum building across the portfolio and expects growth to accelerate as end markets continue to improve.

About Danaher (NYSE:DHR)

Danaher Corporation (NYSE: DHR) is a global science and technology company that designs, manufactures and markets products and services for the life sciences, diagnostics, and environmental and applied markets. The company organizes its operations into business segments focused on Life Sciences, Diagnostics, and Environmental & Applied Solutions, supplying instruments, reagents, software and related services that support research, clinical testing, biopharmaceutical development, and industrial and environmental monitoring.

Products and services in Danaher’s portfolio include analytical and diagnostic instruments, laboratory consumables and reagents, digital and software solutions for workflow and data management, field and industrial monitoring equipment, and service and maintenance programs.