BRUKER CORP Q1 FY2024 earnings call

• Closed ELITech acquisition on April 30, ahead of schedule. - Raised constant exchange rate revenue growth guidance for FY2024 to 12%-14%. - First quarter '2024 reported revenues increased 5.3% year-over-year to $721.7 million, with organic growth of 1.6% and CER growth of 5.5%. - Had product introductions like 40 proteomics tools and workflows, and new NMR developments. - Completed acquisitions of Chemspeed and ELITech; pending NanoString acquisition.

BioSpin Group: Q1 '24 revenue was $183 million with low single-digit percentage CER growth. CALID Group: Q1 '24 revenue was $228 million, and its CER declined in the low single-digit percentage. Bruker NANO: Q1 '24 revenue was $240 million, achieving CER revenue growth in the mid-teens percentage. BEST: Q1 '24 CER revenues grew in the high teens percentage net of intercompany eliminations.

• Raised constant exchange rate revenue growth guidance for FY2024 to 12%-14%. - Reported revenue guidance: $3.29 billion to $3.35 billion, up $60 million from prior, representing growth of 11%-13% compared to 2023. - Non-GAAP EPS guidance: $2.79 to $2.84, up $0.08, with non-GAAP EPS growth guidance of 8%-10% compared to 2023. - Expect sequential margin improvement in Q2 and second half of 2024.

• Geopolitical risks, wars, supply chain, logistics, and inflation. - Litigation and patent issues related to NanoString. - Potential dilution from pending acquisitions, especially NanoString.

Q: My first one is on the revenue slippage you talked about. Is that just a pull forward into the 4Q '23 and thus not expected going forward? And just overall, with the mid-single-digit expectations for the second quarter, can you just elaborate what you're seeing in terms of the overall demand, your ability to deliver from the backlog and any bookings growth that you can talk about? And then I have a follow-up.

A: Yes. As you recall, our Q4 of last year was strong, even stronger than we had expected. Usually, some things slip into Q1, and all the site readiness and export permits, I mean, it was near -- nearly everything went flawlessly. And so yes, with that, we had already expected a low single-digit organic revenue growth for Q1, and we had signaled that previously. And then it was a little lower than we would have liked with about $15 million that's slipping into Q2, which is what we acknowledged here. There's essentially no risk of any of that getting canceled. That will come in, in Q2. Those were the usual export permits, site readiness or sometimes some logistical issues that the system does not go in. But there's no risk issue, and it's not a reflection of any demand. With that, we ended up at the 1.6% organic growth, which is a bit weaker than we would have liked. But as always, it's best to look at Bruker as an average over several quarters. And I think we'll have a decent mid-single-digit or perhaps better Q2 organic revenue growth and expect double-digit CER growth in the second quarter. So that's the cadence.

Q: My first one is on the revenue slippage you talked about. Is that just a pull forward into the 4Q '23 and thus not expected going forward? And just overall, with the mid-single-digit expectations for the second quarter, can you just elaborate what you're seeing in terms of the overall demand, your ability to deliver from the backlog and any bookings growth that you can talk about? And then I have a follow-up.

A: Yes. As you recall, our Q4 of last year was strong, even stronger than we had expected. Usually, some things slip into Q1, and all the site readiness and export permits, I mean, it was near -- nearly everything went flawlessly. And so yes, with that, we had already expected a low single-digit organic revenue growth for Q1, and we had signaled that previously. And then it was a little lower than we would have liked with about $15 million that's slipping into Q2, which is what we acknowledged here. There's essentially no risk of any of that getting canceled. That will come in, in Q2. Those were the usual export permits, site readiness or sometimes some logistical issues that the system does not go in. But there's no risk issue, and it's not a reflection of any demand. With that, we ended up at the 1.6% organic growth, which is a bit weaker than we would have liked. But as always, it's best to look at Bruker as an average over several quarters. And I think we'll have a decent mid-single-digit or perhaps better Q2 organic revenue growth and expect double-digit CER growth in the second quarter. So that's the cadence.

Q: Good morning, and welcome to the Bruker Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. I'd now like to turn the floor over to Justin Ward, Senior Director of Investor Relations and Corporate Development. Please go ahead.

A: Thank you, and good morning, everybody. I would like to welcome everyone to Bruker Corporation's First Quarter 2024 Earnings Conference Call. My name is Justin Ward, and I am Bruker's Senior Director of Investor Relations and Corporate Development. Joining me on today's call are Frank Laukien, our President and CEO; and Gerald Herman, our Executive Vice President and CFO. In addition to the earnings release we issued earlier today, during today's conference call, we will be referencing a slide presentation that can be downloaded from the Events & Presentations section of Bruker's Investor Relations website. During today's call, we will be highlighting non-GAAP financial information. Reconciliation of our non-GAAP to GAAP financial measures are included in our earnings release and are posted on our website at ir.bruker.com. Before we begin, I would like to reference Bruker's safe harbor statement, which is shown on Slide 2 of the presentation. During this conference call, we will be making forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to our recent and pending acquisitions, geopolitical risks and wars as well as supply chain, logistics and inflation. The company's actual results may differ materially from such statements. Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K for the period ending December 31, 2023, as updated by other SEC filings, which are available on our website and on the SEC website. Also, please note that the following information is based on current business conditions and to our outlook as of today, May 2, 2024. You should not rely on these forward-looking statements as necessarily representing our views or outlook as of any date after today. We will begin today's call with Frank providing an overview of our business progress. Gerald will then cover the financials for the first quarter of 2024 in more detail and share our updated 2024 financial outlook. Now I'd like to turn the call over to Bruker's CEO, Frank Laukien.

Q: My first one is on the revenue slippage you talked about. Is that just a pull forward into the 4Q '23 and thus not expected going forward? And just overall, with the mid-single-digit expectations for the second quarter, can you just elaborate what you're seeing in terms of the overall demand, your ability to deliver from the backlog and any bookings growth that you can talk about? And then I have a follow-up.

A: Yes. As you recall, our Q4 of last year was strong, even stronger than we had expected. Usually, some things slip into Q1, and all the site readiness and export permits, I mean, it was near -- nearly everything went flawlessly. And so yes, with that, we had already expected a low single-digit organic revenue growth for Q1, and we had signaled that previously. And then it was a little lower than we would have liked with about $15 million that's slipping into Q2, which is what we acknowledged here. There's essentially no risk of any of that getting canceled. That will come in, in Q2. Those were the usual export permits, site readiness or sometimes some logistical issues that the system does not go in. But there's no risk issue, and it's not a reflection of any demand. With that, we ended up at the 1.6% organic growth, which is a bit weaker than we would have liked. But as always, it's best to look at Bruker as an average over several quarters. And I think we'll have a decent mid-single-digit or perhaps better Q2 organic revenue growth and expect double-digit CER growth in the second quarter. So that's the cadence.