Thermo Fisher Scientific Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• 2025 Performance: Q4 revenue grew 7% to $12.21 billion; full year revenue grew 4% to $44.56 billion. Adjusted operating income Q4 grew 6% to $2.88 billion; full year grew 4% to $10.11 billion. End markets: Pharma/biotech had high single-digit Q4 growth, academic/government declined, industrial/applied mixed, diagnostics/health care low single-digit.
• Growth Strategy: Three pillars - high impact innovation (e.g., Orbitrap Astro Zoom, DynaDrive bioreactor), trusted partner status (Accelerator CDMO/CRO, partnerships with Chan Zuckerberg, OpenAI), and commercial engine (expanded global footprint).
• Capital Deployment: Deployed ~$16.5 billion in 2025, including $13 billion in M&A (acquired filtration/separation, Sanofi site, Clario) and returned $3.6 billion to shareholders.
• PPI Business System: Critical enabler of performance, embedded in culture, using AI to enhance impact.
• Corporate Social Responsibility: Focus on environmental stewardship, community STEM access, global health equity.

Segment Performance

• Life Science Solutions: Q4 reported revenue increased 13% year over year with 4% organic growth; full year reported revenue up 8% with 3% organic growth. Q4 adjusted operating income grew 10% with a margin of 35.5%; full year adjusted operating income grew 8% with a margin of 36.3%.
• Analytical Instrument: Q4 and full year reported revenue increased 1% with organic growth flat. Q4 adjusted operating income decreased 12% with a margin of 26.3%; full year adjusted operating income decreased 11% with a margin of 23%.
• Specialty Diagnostics: Q4 reported revenue grew 5% year over year with 3% organic growth; full year reported revenue up 4% with 2% organic growth. Q4 adjusted operating income grew 19% with a margin of 26.6%; full year adjusted operating income grew 8% with a margin of 26.9%.
• Biology Products and Biopharma Services: Q4 reported revenue increased 7% year over year with 5% organic growth; full year reported revenue up 4% with 3% organic growth. Q4 adjusted operating income grew 12% with a margin of 14.5%; full year adjusted operating income grew 8% with a margin of 14%.

Guidance

• 2026 revenue guidance: $46.3 billion to $47.2 billion (4-6% growth). Adjusted EPS guidance: $24.22 to $24.80 (6-8% growth). Assumes 3-4% organic growth, $300M FX tailwind, 50bps adjusted operating margin expansion. Excludes Clario acquisition benefit (~$0.02-$0.25 EPS).

Risks

• Market Conditions: Macro uncertainties in US and China affecting academic/government; tariffs and policy dynamics.
• Execution Risks: Integration of acquisitions, impact of AI adoption on regulatory compliance.

Question and Answer

Q: About 2026 guidance acceleration, what's underpinning?

A: Assumes market conditions similar to 2025, starting with 3% growth, expecting improvement as year progresses.

Q: Biopharma spending plans translating?

A: Positive sentiment in pharma/biotech, customers valuing trusted partner role, leading to strong engagement.

Q: Analytical Instruments performance and US academic/government?

A: Flat growth in Q4, impacted by academic/government funding pressures; cautious outlook for US academic/government in 2026.