Bruker Corporation Q4 2025 Earnings Call - Beat Q4 guide, $207M free cash flow, guiding modest 1%-2% organic growth and aggressive margin gains in 2026

Conference Operator: Good morning, everyone, and welcome to the Bruker Corporation fourth quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one using a touchtone telephone. To withdraw your questions, you may press star and two. Please also note today’s event is being recorded. At this time, I’d like to turn the floor over to Joe Kostka, Director of Investor Relations. Please go ahead.

Joe Kostka, Director of Investor Relations, Bruker Corporation: Good morning. I would like to welcome everyone to Bruker Corporation’s fourth quarter 2025 earnings conference call. My name is Joe Kostka, and I am the Director of Bruker Investor Relations. Joining me on today’s call are Frank Laukien, our President and CEO, and Gerald Herman, our EVP 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 and Presentation section of Bruker’s Investor Relations website. During today’s call, we will be highlighting non-GAAP financial information. Reconciliations 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 or may make 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 acquisitions, geopolitical risks, market demand, tariffs, currency exchange rates, competitive dynamics, or supply chains. The company’s actual results may differ materially from such statements. Factors that may 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, 2024, as updated by our other SEC filings, which are available on our website and on the SEC’s website. Also, please note that the following information is based on current business conditions and to our outlook as of today, February 12, 2026.

We do not intend to update our forward-looking statements based on new information, future events, or for other reasons, except as may be required by law prior to the release of our first quarter 2026 financial results expected in early May 2026. 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 fourth quarter and full year of 2025 in more detail and share our full year 2026 financial outlook. Now, I’d like to turn the call over to Bruker’s CEO, Frank Laukien.

Frank Laukien, President and CEO, Bruker Corporation: Thank you, Joe. Good morning, everyone, and thank you for joining us on today’s fourth quarter 2025 earnings call. At the conclusion of a difficult year, 2025, with headwinds from academic funding, tariffs, and currencies, we are pleased that in the fourth quarter, we delivered revenues ahead of our expectations. BSI or Bruker Scientific Instruments book-to-bill in the fourth quarter was again over 1.0x, providing more confidence that we are past the trough in demand seen in the middle of 2025. We also saw strong free cash flow in Q4, over $200 million, after admittedly weaker cash flow earlier in 2025. The year 2025 was the first full year of ownership for the three large strategic acquisitions that we completed in the first half of 2024.

Both ELITech and Chemspeed delivered robust mid- to high-single-digit % organic revenue growth year-over-year, while NanoString was approximately flat due to pressure on U.S. academic funding in fiscal year 2025. Encouragingly, spatial biology, including NanoString orders, were up in the double-digit % organically in the fourth quarter of 2025, year-over-year. Our innovation engine continued to shine in 2025 with outstanding and very competitive product launches at the AGBT, AACR, and ASMS conferences last year. Many of these recent launches have seen strong initial demand, which we expect to drive revenue growth in fiscal year 2026 and beyond. Looking to 2026, we expect continued improvements in our markets to drive demand for our differentiated post-genomic discovery, translational, and diagnostic solutions.

We start the year with solid BSI segment backlog of over 7 months of revenue and good bookings momentum, resulting from two consecutive quarters with BSI book-to-bill greater than 1.0. We are pleased to see the fiscal year 2026 NIH budget pass Congress with an increase in funding year over year and barriers to grant overhead cuts and multi-year grant funding. But for now, there is still some lingering uncertainty, uncertainty in the U.S. gov market. The second half improvements in 2025 in biopharma and industrial research order trends and robust semi-metrology orders in Q4 position these end markets for improved revenue performance in 2026. Finally, BEST, which was a headwind to our overall revenue growth in 2025, should turn into a tailwind in 2026, having booked major multi-year agreements worth more than $500 million over multiple years.

Accordingly, we are establishing our fiscal year 2026 guidance for reported revenue growth of 45%, with 1%-2% organic revenue growth for the full year, and an approximate 1.5% revenue growth contribution from an M&A. This all implies constant exchange rate revenue growth of 2.5%-3.5% year-over-year in fiscal year 2026. As we explained in our press release, we still expect a mid-single-digit organic revenue decline in Q1 of 2026, primarily due to the strong Q1 2025 year-over-year comparison. After our first quarter this year, we now expect to resume organic revenue growth in the second quarter and for the remainder of the year.

We remain very committed to rapid non-GAAP operating profit margin expansion, and we aim for 250-300 bps operating profit margin improvement in 2026, despite and including a 50 bps currency headwind. This implies, in principle, 300-350 bps of expected organic operating margin expansion, driven by our major cost-saving initiatives, which we now expect to exceed the upper end of our previously stated range of $100-$120 million. Finally, in fiscal year 2026, we expect non-GAAP EPS growth of 15%-17%, despite and including a strong 8% or approximately $0.15 expected currency headwind, which again implies 23%-25% constant exchange rate, non-GAAP EPS growth compared to 2025. Turning to current results now on slide 4.

In the fourth quarter of 2025, Bruker delivered stronger revenues than expected and above the preliminary range we provided at JPM in early January. Bruker’s fourth quarter 2025 reported revenues of $977.2 million were approximately flat year-over-year, including a currency tailwind of 4.1%, a growth contribution from M&A of 0.8%, and an organic decline of 5.1%. Organic declines in BSI and at BEST, net of intercompany eliminations, were also both at 5.1% in the quarter. In the fourth quarter, our non-GAAP operating margin was 15.7%, down 240 basis points year-over-year, as lower revenue volume, additional tariff costs, and currency headwinds were only partially mitigated in Q4 by our earlier cost and pricing actions.

Q4 2025 non-GAAP diluted EPS was $0.59, down from $0.76 in Q4 2024. Gerald will discuss the drivers for margins and EPS later in more detail. As I said earlier, fourth quarter BSI book-to-bill was again meaningfully greater than 1.0, and our fourth quarter free cash flow was good at $207 million. Moving on to our 2025 full year performance on slide 5. Fiscal year 2025 reported revenues increased by 2.1% to $3.44 billion. On an organic basis, revenues declined 3.7% year-over-year, consisting of a 3.5% organic decline in scientific instruments and a 5.4% organic decline at BEST, as always, net of intercompany eliminations.

Acquisitions added 3.5% to revenue growth, and there was a 2.3% currency revenue tailwind for the year. Our 2025 non-GAAP growth and operating margin and GAAP and non-GAAP EPS performance are all summarized on slide 5. Margins and EPS were down year-over-year as a result of dilution from our strategic acquisitions that closed in the first half of 2024, volume deleverage, and strong currency and tariff headwinds. So please turn to slide 6, slides 6 and 7, where we highlight the 2025 constant exchange rate performance of our three scientific instruments groups and of our BEST segment year-over-year. In 2025, BioSpin group revenue was $879 million and declined in the mid-single-digit %. Solid revenue growth in Chemspeed lab automation was more than offset by declines in NMR instrumentation.

Biopharma revenues were weak, resulting from soft bookings in the first half of 2025. In the fourth quarter of 2025, we had revenue from a 1.2 gigahertz NMR in the UK, our second gigahertz class NMR of 2025, compared to 4 gigahertz NMRs in 2024. The 2 fewer gigahertz systems resulted in a roughly $25 million revenue headwind for 2025 revenues. We’re expecting just 1 gigahertz NMR system in revenue in 2026, at present gigahertz class NMR funding activity, which is healthy, but would likely not yet come in as revenue in 2026, but may well refill our gigahertz NMR pipeline for 2027 and beyond.

For 2025, the CALID group had revenue of $1.2 billion and constant exchange rate growth in the high single-digit %, with growth in microbiology and infection diagnostics driven by ELITech Molecular Diagnostics, as well as by our optics division, driven by our applied market security detection growth. This was partially offset by softness in mass spectrometry, as strong orders for the recently launched timsOmni and timsMetabo mass spectrometers were expected to start to convert into revenue, mostly in 2026. On Slide 7, Bruker Nano 2025 revenues was $1.1 billion and declined to the low single-digits % as solid growth in spatial biology, driven by NanoString and robust biopharma growth, was more than offset by declines in academia/government and industrial markets.

Semiconductor metrology revenues were flat for the year, with a strong semi order book in Q4 of 2025, which is expected to drive stronger semi performance in 2026. Finally, 2025 BEST revenues declined in the mid-single digits%, net of intercompany eliminations, due to soft superconducting demand for clinical MRI systems. However, we received major multi-year orders at the end of the fourth quarter of 2025 and at the very beginning of Q1 of 2026, for superconducting wire from large MRI manufacturers, totaling more than $500 million. This is over multiple years. Also, our research instruments business, which is part of BEST, received more than $40 million in orders for enabling technology for the Extreme Light Infrastructure, something that we had a press release on previously, and this is expected to go into revenue mostly late in 2026.

Moving to slide 8 now, we highlight our Project Accelerate 3. portfolio expansion strategy, and we talked about that a little bit at the J.P. Morgan conference. We remain very focused on our leadership and expanding our leadership in post-genomic disease research and drug discovery tools, primarily proteomics and multi-omics, and of course, a core focus also on spatial biology. We continue to expand and focus in novel diagnostics, novel and differentiated diagnostics opportunities with novel microbiology and infectious disease molecular diagnostics opportunities. I’ll highlight that our ELITech molecular diagnostics business had very strong placements in fiscal year 2025, which bodes well for fiscal year 2026 revenue growth. In microbiology, we’re entering the rapid AST market with the Wave platform, hoping to get FDA clearance for the first claim in this year, in 2026.

In molecular diagnostics, we intend to expand into second-generation affordable syndromic panels on our Genea systems. Finally, a very important trajectory for us is that our proteomic and spatial biology translational research tools increasingly are expected to enter laboratory-developed tests or LDT markets here in the U.S. and elsewhere in CLIA laboratories. We’re excited about our next-gen automated and digitized self-driving labs, something that we just announced on Monday at the SLAS conference here in Boston. As I’ve mentioned earlier, our security, defense, and airport detection business, something that was lingering for a number of years, but where we have differentiated capabilities, is growing nicely at this point, particularly in Europe and overseas.

And finally, we continue to benefit from the AI boom indirectly in our, that our semiconductor metrology tools for new nodes and advanced packaging have seen solid order growth and particularly strong order growth in the fourth quarter. With that, let me conclude soon on slide 9, where you see where we give you our annual update on our revenue mix for the BSI segment, which, as you know, is 93% of our revenue. We are pleased that step by step, our aftermarket component of revenue is increasing. A year ago, in 2024, it was 35%, now it’s at 38%, and in fact, that part was growing organically also in 2025.

Our end market growth is, as you would expect, now more than 60% of our revenue coming from the Project Accelerate 3. focus areas and with particularly good growth that we’re expecting also in terms of orders and revenue from biopharma, from diagnostics, and from semiconductor metrology. Finally, by geography, as you all know, U.S. biopharma and industrial growth looked stronger, certainly in orders in the second half of the year. U.S. ACA Gov is still weak and had been weak throughout 2024, weak throughout 2025, except for the first quarter. The rest of APAC has been very, very resilient and strong, and China, which used to be 16%-17% of our revenue, has continued to decline, although we saw some nice order growth in Q4, and it’s now about 14%, just under 14% of our revenue. Right.

In summary, 2025 was indeed a challenging year for Bruker. We faced multiple unexpected significant headwinds, and we responded by continuing to innovate, launching novel and differentiated high-value solutions. We’ve also focused on cost efficiencies, taking very significant costs out in order to take a large step in 2026 towards greater than 20% operating margins in the next few years. In the medium term, beyond 2026, we expect our organic growth profile to return to a CAGR that is 200-300 basis points above the LSTDX market growth rate, and we will continue to focus on continued major margin expansion steps in 2027 and 2028 as well, while driving continued double-digit non-GAAP EPS growth. We believe that our transformed portfolio is now poised to achieve EBITDA margins greater than 25% over time.

With that, let me turn the call over to Gerald, our CFO.

Gerald Herman, EVP and CFO, Bruker Corporation: Thank you, Frank, and thanks everyone for joining us today. Before I get into the details of our financial performance, I wanted to provide a high-level view of how the fourth quarter played out versus our expectations at the time of our last earnings call. We’re pleased that revenue for the quarter came in about $20 million above our guide expectations. However, despite the top-line outperformance, our non-GAAP operating margin of 15.7% came in below our expectations by about 100 basis points. This was driven by headwinds of approximately 50 basis points from unfavorable mix, 30 basis points from delayed tariff offsets, and about twenty basis points from a stronger foreign exchange headwind relative to our prior guidance.

Our guide for fiscal year 2026 reflects an improved mix profile, as well as pricing and supply chain actions more fully mitigating the tariff impact going forward. Now, some further details on Bruker’s fourth quarter and full year 2025 financial performance, starting on slide 11. In the fourth quarter of 2025, Bruker’s reported revenue decreased 0.2% to $977.2 million, which reflects an organic revenue decline of 5.1% year-over-year. Acquisitions contributed 0.8% to our top line, while foreign exchange was a 4.1% tailwind. Both our BSI and BEST segments had organic revenue declines of 5.1% in the fourth quarter of 2025, with organic revenue declines across all groups.

BSI Q4 2025 instruments revenue declined in the mid- to high-single digits, while aftermarket revenue saw growth in the low single-digit range year-over-year. As Frank mentioned, for the full year of 2025, aftermarket revenue now represents 38% of BSI revenues, up from 35% in 2024. Geographically and on an organic basis in the fourth quarter of 2025, our Americas revenue declined in the low teens%. European revenue declined in the high single digits%, and Asia Pacific revenue grew in the high single digits%, including double-digit growth in China all year-over-year. For our IMEA region, Q4 2025 revenue was up high single digits% year-over-year. Non-GAAP gross margin decreased 310 basis points in the fourth quarter of 2025 to 49.4%.

Factors impacting our gross margin in the fourth quarter of 2025 are essentially similar to those impacting the operating margin in the quarter. In the fourth quarter of 2025, we posted a Non-GAAP operating margin of 15.7%, down 240 basis points compared to the fourth quarter of 2024. This decline was driven by a combined 490 basis points decline from lower volume, unfavorable mix, tariffs, and strong currency headwinds. These headwinds, which are described in more detail on the slide, were partially offset by a 250 basis point benefit from our fiscal year 2025 cost-saving initiatives, as we realized approximately $25 million of cost savings in the quarter.

On a non-GAAP basis, fourth quarter 2025 diluted EPS was $0.59, down 22.4% from $0.76 in the fourth quarter of 2024. Our non-GAAP effective tax rate was 29.9%, compared to 32.5% in the fourth quarter of 2024, with the decrease driven primarily by discrete items in the fourth quarter of 2025. On a GAAP basis, we reported diluted EPS of $0.10 versus $0.09 in the fourth quarter of 2024. Weighted average diluted shares outstanding in the fourth quarter of 2025 were 171.7 million, an increase of 19.7 million shares, or 13%, compared to the fourth quarter of 2024, reflecting the accounting for the mandatory convertible preferred stock offering we completed in September 2025. Turning now to slide 12.

We had an excellent cash generation quarter in the fourth quarter of 2025, with approximately $230 million of operating cash flow generated in the quarter, actually the highest in our history. We delivered over $100 million in improved working capital performance in the fourth quarter of 2025, and with CapEx investments at $22.6 million drove free cash flow of $207.3 million in the fourth quarter of 2025, up about $54 million over the fourth quarter of 2024. We finished the fourth quarter of 2025 with cash, cash equivalents, and short-term investments of approximately $300 million.

During the fourth quarter, we used cash to fund selected Project Accelerate 3.0 investments, capital expenditures, and continued our de-levering actions with a debt repayment of approximately $145 million in the quarter. We ended fiscal year 2025 with a leverage ratio of approximately 3.1. Slide 13 shows our non-GAAP P&L results for the full year of 2025. Revenue was up 2.1% to $3.44 billion, including an organic revenue decline of 3.7%. Acquisitions added 3.5% to our top line, resulting in constant exchange rate revenue to be roughly flat year-over-year. Foreign exchange was a 2.3% tailwind to revenue growth in fiscal year 2025.

Fiscal year 2025 non-GAAP operating margin was 12.6%, down 280 basis points year-over-year. This decrease reflects net headwinds from M&A of approximately 65 basis points, tariffs of approximately 65 basis points, foreign exchange, 70 basis points, as well as the impact from lower estimated volume impact of approximately 80 basis points, which includes the partial benefits from our pricing and cost reductions. The remainder of the non-GAAP P&L results for the full year of 2025 are summarized on slide 13, with the drivers, as explained earlier and on the slide. Turning now to slide 15, we entered the year with a healthy backlog of approximately 7 months and solid order momentum after two consecutive quarters of VSI book-to-bill above 1.0.

We are initiating guidance for fiscal year 2026 as follows: reported revenue of $3.57 billion-$3.60 billion, representing reported growth of 4%-5%, compared to fiscal year 2025. Organic revenue growth of 1%-2% year-over-year, plus acquisitions contributing 1.5%, plus an estimated currency tailwind of 1.5%, all contributing to reported revenue growth. For operating margins in fiscal year 2026, we expect organic non-GAAP operating margin expansion of 300-350 basis points in the year, offset by approximately 50 basis points of currency headwind, resulting in a net non-GAAP operating margin expansion of 250-300 basis points compared to the 12.6% posted in fiscal year 2025.

We expect to take a major step-up in operating margin performance in fiscal year 2026, with much of this margin improvement driven by our previously announced $120 million cost actions taken in fiscal year 2025, which we now expect to exceed. With markets signaling further recovery and our new products and solutions gaining traction, we expect to take another meaningful step-up in operating margins in fiscal year 2027 and beyond. On the bottom line, we’re guiding to non-GAAP EPS for fiscal year 2026 in a range of 210-215, or non-GAAP EPS growth of 15%-17% compared to fiscal year 2025. Using current foreign exchange rates, we’re estimating a currency headwind of approximately 8% to fiscal year 2026 EPS, implying non-GAAP CER EPS growth of 23%-25% year-over-year.

Other guidance assumptions are listed on the slide. Our fiscal year 2026 ranges have been updated for foreign currency rates as of December 31, 2025. Finally, a bit of color on Q1 of 2026. We have a strong year-over-year comparison as we delivered mid-single-digit VSI organic revenue growth in the first quarter of 2025, and margins in EPS in Q1 of 2025 were not yet impacted by U.S. import tariffs or ACA GOV funding disruptions. Therefore, we anticipate first quarter 2026 organic revenue to be down in the mid-single digits% and operating margin and EPS to be down meaningfully compared to the first quarter of 2025. We then expect operating margins and EPS stepping up each quarter thereafter throughout the rest of 2026.

To wrap up, we’re encouraged by the order momentum we now see in many of our end markets. This, combined with some stability in the U.S. academic funding environment, gives us confidence that we’re positioned to return to organic revenue growth in the second quarter of 2026, and we plan robust operating margin expansion and non-GAAP EPS growth in fiscal year 2026 and beyond. With that, I’d like to turn the call over to Joe. Thank you very much.

Joe Kostka, Director of Investor Relations, Bruker Corporation: Thank you, Gerald. We’ll now begin the Q&A portion of the call. As a reminder, to allow everyone time for questions, we ask that you limit yourself to one question and one follow-up. Operator?

Conference Operator: Ladies and gentlemen, at this time, we will begin that question-and-answer session. To ask a question, you may press star and then one on your touchtone telephones. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. At this time, we’ll pause momentarily to assemble the roster. Our first question today comes from Puneet Souda from Leerink Partners. Please go ahead with your question.

Puneet Souda, Analyst, Leerink Partners: Yeah, hi, guys. Thanks for the questions here. Frank, the margin question has been a frequent one and obviously a focus in the quarter. Could you talk about, you know, just given the 4Q margins, you came in below, you were expecting a number of cost initiatives to push margins higher in 2026. Maybe just tell us where are those cost initiatives focused? How much reduction—How should we think about that beyond that $120 million that you have talked about? And also for Gerald, if you could talk about the OpEx margin cadence, just given the significant ramp you have throughout the year, and anything you can provide on your comment around the meaningful 1Q OpEx margin impact.

Frank Laukien, President and CEO, Bruker Corporation: Okay, Puneet, I’ll start. Good morning. So as Gerald had explained, of the 100 basis points, lower margin than what we had expected in Q4 of 2025, the way we look at it is that the 50 basis points from unfavorable mix is not likely to repeat itself. Those were idiosyncratic factors in Q4. Thirty basis points from delayed revenue offset, I think will offset that successfully in 2026, and the 20 basis points of stronger currency headwind is here to stay for now, right? And in fact, as you will see, as you will have seen from our guidance by now, both on the operating margin expansion in 2026 as well as on the EPS growth, we have acknowledged significant headwinds from currency.

Accordingly, and that leads to the second part of your questions, we have gone even stronger or even further on the cost initiatives. We now expect these to yield on an annualized basis, between closer to $140 million or even higher than that. That will not all these additional cost cut, cost reductions will, not all be active or effective, excuse me, in Q1 or Q2, but certainly by Q3, that should be all effective and then become annualized. So we’ve been pushing that, if you like, by an additional 10%-15%. And that’s about the right amount.

We don’t want to under-invest in our opportunities, but we also, of course, are very committed to this 250-300 basis points of operating margin expansion and the double digit, in this case, reported, 15%-17% reported EPS growth. Which is all in including currency headwinds, which are strong, and including, obviously, also some of the dilution we had from the mandatory convert. So that’s hopefully, that addressed your questions. I think you had something for Gerald on cadence.

Gerald Herman, EVP and CFO, Bruker Corporation: Yeah. Hi, Puneet, it’s Gerald. I’ll just comment just generally, as I mentioned in my prepared remarks, we had a quite strong Q1 of 2025. You may recall, while we sort of hit the mid-single digits range of total Bruker organic growth at the VSI level, it was actually mid-single digits and quite substantial. I mean, we don’t expect to hit that in the first quarter, especially on our organic performance. So we are expecting a softer Q1, and we expect to pick up the pace pretty dramatically starting in Q2, Q3, and stronger again, finishing again in the fourth quarter. The step up in operating margin growth is quite significant, largely due to what Frank was just describing.

We do have, in the fourth quarter of 2025, about $25 million of cost savings that are reflected mostly in the OpEx category. You’ll see that again, in the other quarters as we move forward. But some of our European-based cost actions will take effect more in the first quarter and in the second. So you’ll start to see a more significant ramp starting in Q2 and thereafter, Q3 and Q4. We can talk more about the details, but fundamentally, that’s the direction.

Puneet Souda, Analyst, Leerink Partners: Okay. That’s super helpful. Thanks for that. Just a quick follow-up on, Frank. The new and competitive renewable awards are coming in lower. Maybe it’s due to that at NIH, mainly, and maybe it’s due to the political challenges that we have in getting those grants out and whatnot. But NIH is supposed to be 1% better this year versus last year. So just any feedback on the academic and government customers, in your, you know, interactions so far in the first quarter? Would appreciate any context there. Thank you.

Frank Laukien, President and CEO, Bruker Corporation: Yeah, I mean, the, you know, it’s, nobody’s talking about a strong tailwind yet, but the absence of the strong headwind from last year feels a little bit better for U.S. ACA Gov. U.S. ACA Gov orders in Q4 were still quite weak. But I think, you know, that’s so that’s bottoming out later than the trough, in biopharma and industrial research demand, where we probably saw the trough mid-year of last year. It’s so, so there’s still that. That’s why everybody, including us in particular, are still cautious on growth rates this year, right? 1%-2% organic growth rate isn’t a snapback to our typical growth rates. So we’re still, we’re still cautious on that. But I am obviously, compared to a really tough year, 2025, I’m encouraged that things are likely going to get better.

But I think until academia gets more confidence and that and I think it’ll may be a couple of quarters, even if an NIH budget that’s flat or up +1%, and with prohibitions against overhead cuts and multi-year grants, or at least limitations on those, if this will pass, and, you know, I think there’s a reasonable chance of that. Similarly, also encouraging on NSF and other science budgets, by the way, NASA, DOE, you name it. So I’m encouraged with that, but I think it may not help us with orders all that much till the second half. Got it. Okay. Thank you. Thank you.

Conference Operator: Our next question comes from Michael Ryskin from Bank of America. Please go ahead with your question.

Michael Ryskin, Analyst, Bank of America: Hey, thanks for the question, guys. I wanna dig into the margin a little bit in terms of the 2026 versus 4Q. I think you talked about 4Q coming in a little bit lighter, and you shifting some of those. I guess asking it qualitatively, just you know you pointed to the higher end of the range. What gives you confidence in your ability to take that, given you know that you weren’t able to execute on all the margin cost outs in the fourth quarter? Just sort of you know yeah just confidence on ability to execute that. And then I’ve got a follow-up. Thanks.

Frank Laukien, President and CEO, Bruker Corporation: Well, we’ve taken out the high end of the $100 million-$120 million in costs already, and we are in the process of taking out additional costs, which will, let’s say, that becomes fully effective by mid-year. So that’s why we have a lot of confidence in that. And then some of the other margin idiosyncrasy, some of that has to do with pricing, supply chain, these things. When, you know, when we increase pricing and until we then get an order, and until that order turns into revenue, can, in many cases, be three or four quarters. So the effect of all these things, those good steps that we did take and have taken or continue to take on the supply chain, have a longer lead time, and we noticed that in Q4.

But, you know, they really are happening and they have happened, so that gives us a lot of confidence in next year. And as I said, we had some, we really did have some unfavorable mix in Q4, so we don’t think that’ll repeat itself.

Michael Ryskin, Analyst, Bank of America: Okay. Okay, I appreciate that. For the follow-up, I wanna talk about your comments you made about revenue pacing through the year. I think you pointed to down mid-single in the first quarter, but you expect revenues to be positive starting in 2Q. Just clarify how much of that is the comps from prior year? I know there were, you know, 1Q 2025 was surprisingly good. You know, I think we didn’t see the hit from the end market slowdown and from the NIH concern until later in the year. So how much of that is the prior year comps versus underlying assumptions on any end market improvement this year? Or just sort of, you know, how your order book visibility factors into that, just, you know, the confidence between that 1Q jumping.

Frank Laukien, President and CEO, Bruker Corporation: Yeah, it’s both. Yeah, you’re right, it’s both. I mean, you know, and there’s I can’t, I cannot really disentangle that quantitatively, but qualitatively, both are your question already implies they both play a role. So yes, the comps get easier, and in some cases, a lot easier by Q2, right? Q2 2025 was not good for us, so the comps do get easier and even through the remainder of the year. So with easier comps and with picking up, with improving, gradually improving order momentum in many of the segments, even if not all of them, even China bookings were better in Q4, Applied and Semi was very strong. Biopharma was very solid in bookings in Q3 and Q4 of last year.

Industrial research, which was very, very slow, the orders in Q2, as everybody was trying to figure out what’s the new geopolitical and tariff landscape. As that has now become solidified or stabilized for the time being, I think these markets have all picked up. Really, the little bit the outlier is still U.S. aka gov, but at least even there, from what I see, reading more than tea leaves, reading NIH budgets, I think it may begin to benefit us in the second half in bookings. That, however, may then mean that it, you know, could be a Q4 or mostly 2027 effect in revenue, which is why we think longer term, we return to our 200-300 basis points above market revenue, organic CAGR, but not yet this year.

But even this year, you do the math pretty easily with a mid-single-digit decline in Q1. Obviously, the organic growth rates for the remainder of the year, the remaining three quarters, are better than the full year growth rate. Obviously, that’s easy math for you and for us. But even at that level, they’re not fully back at our long-term growth rates. We hope to achieve those in 2027 and beyond. I hope that helps.

Michael Ryskin, Analyst, Bank of America: No, that’s super helpful. Much appreciated. Thanks. Thanks, Frank.

Frank Laukien, President and CEO, Bruker Corporation: Sure.

Conference Operator: Our next question comes from Tycho Peterson from Jefferies. Please go ahead with your question.

Tycho Peterson, Analyst, Jefferies: ... Hey, thanks. Frank, maybe just can we do a quick walk on the assumptions for some of the other end markets? I appreciate you’ve, you know, hit on academic already, but what are you assuming for biopharma this year? What are you assuming for semi? You know, anything in microbiology that could be a headwind, we’ve heard about, you know, that from some of your peers. So maybe just give us a walk on some of the other end markets.

Gerald Herman, EVP and CFO, Bruker Corporation: Thank you. It’s Gerald. I’ll just, I’ll just talk just generally about the end markets assumed in the guide. For, for biopharma, we’re, we’re not assuming a snap, a significant snapback. We’re assuming low single digits organic growth. Our semi business, which was relatively flat on a revenue level for 2025, we’re expecting to be in the low single digits in growth. Clinical, a little bit stronger for us from our microbiology-based business. And academic and government research, largely driven by continued softness for the first quarter or so, we are expecting to be sort of flat or low single digits down. Industrial, flat and applied about the same. So generally speaking, we are not expecting a significant snapback in any of our end markets. We think strength coming from biopharma and certainly semi in 2026.

Tycho Peterson, Analyst, Jefferies: Okay. And then-

Frank Laukien, President and CEO, Bruker Corporation: I, I would add maybe one fine point. Molecular diagnostics, which is of course part of infectious disease diagnostics, we’re expecting very good growth there this year because we had nearly, nearly 30%, now about 30% more placements, of these Genius platforms last year in 2025 than what we had anticipated, what we had planned. So that was, that was excellent. So that tends to then bring in the pull-through in the following year. So that. So I think diagnostics and biopharma and semi will be the highlights for the year. 2026, and others are recovering and stabilizing, and U.S. aka, U.S. aka gov, perhaps turning in our revenues and P&L, not really much of a corner until Q4, perhaps even into next year. But with improving trends and less headwinds. Sorry. Yeah.

Tycho Peterson, Analyst, Jefferies: Gerald, I know you had a number of questions on margins. Can you just comment on gross margins for this year? Are you expecting gross margin expansion?

Gerald Herman, EVP and CFO, Bruker Corporation: Yeah, we are. I mean, we, as, as you already heard, specifically on the fourth quarter, we were somewhat below our expectations on the gross margin level, and that was partly being driven by the mix issues and the tariff and of course, the foreign exchange pieces I highlighted earlier. So yeah, we’re, we’re not gonna be able to do too much further on the foreign exchange piece, but on the mix, our view is that this is gonna improve for us. And certainly from the tariff side, as you heard from Frank, we’re expecting to, you know, recover that and mitigate any tariffs going forward.

Frank Laukien, President and CEO, Bruker Corporation: I think, I think it’s fair to say that of our operating profit margin expansion, about half of it comes from gross margin expansion.

Gerald Herman, EVP and CFO, Bruker Corporation: Yeah, and of course, our OpEx, right?

Frank Laukien, President and CEO, Bruker Corporation: Right. But it’s about half, half-

Gerald Herman, EVP and CFO, Bruker Corporation: Yeah.

Frank Laukien, President and CEO, Bruker Corporation: - this year, 2026, and probably be, and beyond that as well.

Tycho Peterson, Analyst, Jefferies: Okay. Then, Frank, on the M&A contributions, you flagged proteomics and spatial entering, LDT and CLIA. Can you maybe just elaborate a little bit more on, you know, how you think about that opportunity?

Frank Laukien, President and CEO, Bruker Corporation: So sorry, those were not M&A contributions. Those were-

Tycho Peterson, Analyst, Jefferies: Oh, I didn’t know if it was related to NanoString or something. Okay. Can you just comment on what-

Frank Laukien, President and CEO, Bruker Corporation: No, no, no. This is just our higher growth and higher margin opportunities, which we bundle under the now further evolved Project Accelerate. Much of that, or some of that was M&A, but it was prior M&A that we’ve now owned for one or two years in these areas.

Tycho Peterson, Analyst, Jefferies: Okay, thank you.

Frank Laukien, President and CEO, Bruker Corporation: All right. Thank you.

Conference Operator: Our next question comes from Subbu Nambi from Guggenheim. Please go ahead with your question.

Subbu Nambi, Analyst, Guggenheim: Hey, guys. Thank you for taking the questions. So what are your expectations this year for book-to-bill and backlog to hover at? Will it be noisy with some end market rebound? Just how should we be thinking about the trend of customer spending interest in 2026?

Frank Laukien, President and CEO, Bruker Corporation: Yeah, we expect continued gradual improvements. So while we don’t specifically forecast backlog or book-to-bill, we hope that... we believe, actually, that the book-to-bill trends of the last two quarters, which in BSI were, you know, above 1.0, will continue into this year. Also aided, of course, by easier comps, at least again in Q2 through Q4. And, we may need, we may use a little bit of our still high backlog this year, but, you know, we’re not, we’re not modeling anything that, that becomes all normalized to, you know, perhaps the 5.5 or 5x level, five months level that we, that we, that we think it would be a normalized level for the way BSI is configured now.

Subbu Nambi, Analyst, Guggenheim: Thank you for that. Then, you mentioned some new products in microbiology and diagnostics. Exiting 2026, what do these businesses look like, like, from a product roadmap perspective and a revenue growth perspective? Thank you.

Frank Laukien, President and CEO, Bruker Corporation: Okay. Yeah, so in microbiology, I assume that we’ll have the first rapid AST, gram-negative positive blood culture, claim approved by the FDA this year, 2026, hopefully before midyear. And that we will be in clinical trials for additional claims on that rapid AST platform. So that will be a nice build-up over the next couple of years as more and more content is becoming available on that Wave platform. Of course, there’s a lot of content coming out on our existing Genius platforms, both in Europe, and then we’re also doing a first assay, going into clinical trials for entering the US market with these Genius platforms. Again, that won’t move the needle in 2026.

It’ll include still some investment, obviously, in OpEx investments in 2026, but that will begin to mostly help us then for further growth in 2027, 2028, and beyond. And what was the second part of your question, or did that address your question?

Analyst: The diagnostics business.

Frank Laukien, President and CEO, Bruker Corporation: Yeah. Well, BeGenius is the diagnostics business, right? Syndromic panels will begin to roll out and get through regulatory approvals in Europe in late 2026, 2027. So they’ll begin to affect our larger install base in Europe first, Europe and Latin America, and a few other countries, actually. And then there’ll be a series of syndromic panel, affordable syndromic panels coming out through and making it through the regulatory processes, IVDR, in this case, in 2027, 2028. So these are, you know, that’s just a flywheel. You add something every year. It doesn’t make a big difference in one year, but the cumulative effect over time is just very, very nice. As we’ve seen with molecular diagnostics, even in 2025, that was a very nice growth market, mid-to-high single-digit growth market for us.

Analyst: Perfect. Thank you so much.

Frank Laukien, President and CEO, Bruker Corporation: Mm-hmm.

Conference Operator: Our next question comes from Doug Schenkel from Wolfe Research. Please go ahead with your question.

Doug Schenkel, Analyst, Wolfe Research: Good morning, guys. Thank you for taking my question. Regarding first quarter organic revenue growth guidance, your description of the difficult comparison is accurate. However, there’s, you know, two or three discrete items that seem like those should render the number a bit better.

Frank Laukien, President and CEO, Bruker Corporation: Mm-hmm.

Doug Schenkel, Analyst, Wolfe Research: What I’m thinking about are, you know, first, the recovery of at least part of the $40 million in semiconductor-related revenue that you previously told us had slipped out of Q4, and you expected to recapture largely in Q1, but over the course of the first half. The second is the impact of pricing, which you started to get more aggressive with, you know, last May, and it takes time for that-

Frank Laukien, President and CEO, Bruker Corporation: Mm.

Doug Schenkel, Analyst, Wolfe Research: -to come through quarter by quarter. But it seems like at this point, that should be more meaningful. And then, you know, I guess the third I would point to is you did talk about an NMR placement slipping out of Q4, and, you know, maybe that gets recaptured in Q1. So when I think about those things, that doesn’t seem consistent with mid-single-digit organic declines in Q1, even with the comp. Can you help us out?

Gerald Herman, EVP and CFO, Bruker Corporation: Yes. Doug, it’s Gerald. With respect to the Q1 story, I think it’s important to understand that, you know, some of our organic performance in Q1 of 25 was pretty significant in terms of both mix and the actual operating profit performance. So we had strong order performance in semi, in particular, in the first quarter of 2025, and very strong bookings performance in that quarter. So we think that the timing of our existing orders that are principally driven by what happened in H1, really, of 2025, will not significantly improve our ability to execute on orders in the first quarter.

So that becomes a headwind in its, in its own right, but it’s just the timing of our orders and the lead time required in order for those to execute into revenue. I would say secondly, with respect to the semi orders that got pushed out, I mean, I think our, our commentary has been pretty consistent about hitting the first half of 2026. Not all of that is going to impact in the, in Q1. So I think we are expecting to, to see some improvement in Q2 from those, but not all of it hits in the, in, in Q1 of 2026. And then on the NMR side, I mean, we don’t have any specific NMR push-outs. I mean, we had some challenges in BioSpin for sure, from a mix perspective.

We saw some of that in the fourth quarter, but we don’t really.

Frank Laukien, President and CEO, Bruker Corporation: The 1.2 gigahertz did not get delayed.

Gerald Herman, EVP and CFO, Bruker Corporation: Yeah.

Frank Laukien, President and CEO, Bruker Corporation: It was in Q4, the U.K. 1.2 gigahertz. Maybe, Doug, I mean, you’re you know us really well. You know, you know a lot of the moving pieces. Obviously, as we’ve said, a mid single digits, that’s obviously quite a range, right, of outcomes for Q1. But we just wanted to highlight that it will still be our revenue, almost certainly will still be down. I think mid single digits, which is a bit of a range, we realize that, is not just prudent and conservative. I think that’s the right number. It puts a little bit into perspective the obviously greater optimism that we have in resuming organic growth, and not only at the 1%-2% level, but more meaningfully in the subsequent 3 quarters of this year.

Doug Schenkel, Analyst, Wolfe Research: Okay. All right. Thank you, guys.

Frank Laukien, President and CEO, Bruker Corporation: Thank you.

Gerald Herman, EVP and CFO, Bruker Corporation: You’re welcome.

Conference Operator: Our next question comes from Luke Sergott from Barclays. Please go ahead with your question.

Analyst: Hey, this is Jake on for Luke. Thanks for the question.

Analyst: ... I wanted to dig more in on China and that double-digit growth. Your mix there has historically leaned towards industrials, but with your build-out on the pharma portfolio and this part of the market picking up there, what does your end market mix in China look like now, and how should we think about it going forward?

Frank Laukien, President and CEO, Bruker Corporation: Yeah, after a bit of a lull there, when the CRO business went away, and then there was indeed, we had very little on that. Now, China has recovered on the CRO side, and China is becoming, it’s in a drug discovery and development biopharma powerhouse in its own right. So that’s beginning to become noticeable. And academic spending, there was... I mean, we don’t talk about it much anymore, but there was decent academic spending and bookings in Q4, better than the year before. Whether some of that was stimulus or not is now not so clear. People can’t really just, this is stimulus, this is other academic funding. It’s become more nebulous and diffuse, but anyway, it was healthier.

So we didn’t know what expectations to have for China in Q4, but it ended up being one of the better performers in terms of bookings, and also at the end of the year, we had some decent revenues there.

Analyst: Mm-hmm. Great. Thanks for that.

Frank Laukien, President and CEO, Bruker Corporation: Hard to read any trends into that. Clearly, the biopharma piece in China is growing, no questions about that. Of course, there’s also some of that is growing also in India, and also the rest of APAC, you know, from Korea to Taiwan to Japan. They all have improving biopharma trends for our particular tools. And of course, there’s a lot of semiconductor metrology in APAC, outside of China, obviously, Taiwan, Korea, but also Japan. So we’re benefiting from that, mostly on the order side, which should bode well for gradual step-ups in 2026.

Gerald Herman, EVP and CFO, Bruker Corporation: I would just add that our guide for 2026 related to China is not strong. I mean, we are assuming that the basic revenue performance is largely flat, which is not a good, and certainly not a snapback from where it was several years ago. So we’re not assuming strong growth in China, in our current guide position.

Analyst: Great. Thank you.

Conference Operator: Our next question comes from Dan Brennan, from TD Cowen. Please go ahead with your question.

Analyst: Great, thank you. Thanks for the questions. So maybe the first one would just be on U.S. economics and government. Frank and Darryl, I know you made some comments already. Just did you guys say what the instrument growth or trend was for you from that customer base in 2025 and what’s assumed in 2026? And I think, Frank, you mentioned multiyear funding was capped. I’m just wondering, like, is that multiyear funding no longer a headwind, or just how do we think about that for 2026?

Frank Laukien, President and CEO, Bruker Corporation: Yeah, good question. On the multiyear funding, quite honestly, I’m not so sure. I’m a little confused by that as well, on how that all plays itself out. You know, even if it’s multiyear funding, it is more funding into the system, and some of that funding is a little bit fungible in some of these big academic research or disease research centers. If they get more funding in one area, it alleviates pressures elsewhere to transfer budgets, so it makes more money available. So even the multiyear grants aren’t bad for us, even if they don’t always immediately and directly fund another NMR or mass spec or microscope. Before, to your first part of your question, bookings in ACA Gov in the US for the year were down in the high teens.

Yeah, so, not the worst outcome, but not a great outcome, right? So that’s clearly a significant headwind. We also felt it in revenues, but bookings were down significantly in high teens for the year.

Analyst: Right, and you guys-

Frank Laukien, President and CEO, Bruker Corporation: That means in some-

Analyst: You said-

Frank Laukien, President and CEO, Bruker Corporation: It means in some quarters-

Analyst: For quarters?

Frank Laukien, President and CEO, Bruker Corporation: It was down more than 20%. Yep.

Analyst: And, and-

Frank Laukien, President and CEO, Bruker Corporation: Sorry. Go ahead.

Analyst: I think you said earlier, Frank, it was flat on the outlook is expected flat in 2026. Is that right?

Frank Laukien, President and CEO, Bruker Corporation: This is for all of ACA Gov.

Analyst: ACA, yeah. Yeah.

Frank Laukien, President and CEO, Bruker Corporation: Yeah, yeah.

Analyst: Okay.

Frank Laukien, President and CEO, Bruker Corporation: This was not a U.S.-specific comment.

Analyst: Right.

Frank Laukien, President and CEO, Bruker Corporation: But as you know, China and Japan and Europe, the ACA Gov, and almost everywhere else, was much more much better than in the U.S., right? Some were, some were strong, some were just solid, you know, solid and good. So that was a comment for all of ACA Gov, not, not a U.S.-specific comment.

Analyst: Got it.

Frank Laukien, President and CEO, Bruker Corporation: I don’t know that we broke that out. Therefore, you’d still expect U.S. ACA Gov to be down organically in revenue for the year 2026.

Analyst: Got it. And if I can just speak one more just on semis, just so the guide is flat for semis. I know that business have been growing double digits. You are very positive on kind of the AI connection. Can you just elaborate a little bit on that?

Gerald Herman, EVP and CFO, Bruker Corporation: Just to be sure that, you know, just to be-

Frank Laukien, President and CEO, Bruker Corporation: Sorry. That’s upright.

Gerald Herman, EVP and CFO, Bruker Corporation: Yeah, just to be clear. With respect to full year 2025 revenue performance, semi was flat.

Analyst: Right.

Gerald Herman, EVP and CFO, Bruker Corporation: For full year 2026, in our guide, we are expecting actually to be up in the low single digits range. That’s what we’re currently thinking. By the way, just to clarify, even on the BSI Gov side, we’re not expecting a significant growth level in BSI Gov, either in the U.S. or globally in our guide. Right.

Joe Kostka, Director of Investor Relations, Bruker Corporation: Okay, thank you very much.

Gerald Herman, EVP and CFO, Bruker Corporation: You’re welcome.

Conference Operator: Our next question, our last question comes from Brandon Couillard from Wells Fargo. Please go ahead with your question.

Brandon Couillard, Analyst, Wells Fargo: Hey, thanks. Good morning. Frank, just directionally, which of the three VSI segments do you expect to lead in terms of revenue growth this year? And just one clarification on the ultrahigh field MR systems. You know, I think you said 1 install expected in 2026. You used to carry a pretty large backlog there. Do you expect to go back to, say, 3 or 4 installations in 2027? Is there just a timing thing or something dynamic? Thanks.

Frank Laukien, President and CEO, Bruker Corporation: Right. So, thank you, Brandon. You were asking about the groups, right?

Brandon Couillard, Analyst, Wells Fargo: Yes.

Frank Laukien, President and CEO, Bruker Corporation: Yeah. So, so, we think the weakest growth in, in the groups this year in 2026 will be in BioSpin, whereas Nano and CALID and BEST are expected to grow organically. Comparable, they’ll all three grow, but BioSpin because of the longer term bookings and also because of, for instance, no ultra-high field or maybe only one in revenue in 2026. BioSpin’s going to be the laggard this year in revenue growth and not normalized till 2027. Indeed, to your second part of your question, Brandon, there is some good activity, but, you know, trying to find funding, building consortia, etcetera.

So I don’t know that we’ll go back to 4 a year, but I think we’ll be, hopefully be able to go back to 2 or 3 a year in revenue, by, you know, 2026, 20, sorry, 2027 and beyond. That’s sort of our expectations. So 2026 will be a bit of a lull, which goes hand in hand, but it’s not the only reason that BioSpin will be the growth laggard in 2026 for us.

Brandon Couillard, Analyst, Wells Fargo: Okay, great. And then, Gerald, what do you have penciled in for net interest and other expense for 2026? And the cash flow was a bright spot in the fourth quarter. How do we think about free cash flow conversion this year? Thanks.

Gerald Herman, EVP and CFO, Bruker Corporation: Yeah, I mean, we’re just on the last point, and we’re quite pleased with how the fourth quarter came in, as far as working capital conversion and our actual cash flow for the quarter came in about 207 on the free cash flow, $207 million on the free cash flow number. So quite pleased about that. As you already know, we’ve had a lot of effort related to inventory actions, and happy to see that it is resulting in something positive. I mean, we could talk further more about that. When you look at just interest expense line, you know, we’re thinking somewhere around this, you know, $35-$40 million range for interest expense, and then we have some offsets on that other income line.

We can talk about more of this offline, but there’s some nets that get you to, I think, a better performance on the other income line, net interest, other income line, for us in 2026.

Brandon Couillard, Analyst, Wells Fargo: Thanks.

Gerald Herman, EVP and CFO, Bruker Corporation: Okay.

Conference Operator: With that, ladies and gentlemen, we’ll be ending today’s question and answer session. I’d like to turn the floor back over to Joe Kostka for closing comments.

Joe Kostka, Director of Investor Relations, Bruker Corporation: Thank you for joining us today. Bruker’s leadership team looks forward to meeting with you at an investor event or speaking with you directly during the first quarter. Feel free to reach out to me to arrange any follow-up. Have a good day.

Conference Operator: Ladies and gentlemen, with that, we’ll conclude today’s conference call and presentation. We do thank you for joining. You may now disconnect your lines.