Bruker Corporation (NASDAQ:BRKR) Q4 2025 Earnings Call Transcript

Bruker Corporation (NASDAQ:BRKR) Q4 2025 Earnings Call Transcript February 12, 2026

Bruker Corporation misses on earnings expectations. Reported EPS is $0.59 EPS, expectations were $0.65.

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 touch-tone telephone. To withdraw your questions, you may press star and two. Please also note today’s event is being recorded. At this time, I would like to turn the floor over to Joe Kostka, Director of Investor Relations. Please go ahead. 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 Presentations 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-Ks for the period ending 12/31/2024, 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 our outlook as of today, 02/12/2026.

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. I will now turn the call over to Frank Laukien. 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 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 ’24. Both ELITech and Chemspeed delivered robust mid- to high-single-digit percentage organic revenue growth year over year, while NanoString was approximately flat due to pressure on U.S. academic funding in fiscal year 2025.

Q&A Session

Encouragingly, spatial biology, including NanoString, orders were up in the double-digit percentages organically in 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 months of revenue, and good bookings momentum resulting from two consecutive quarters with BSI book-to-bill greater than 1.

In 2026, the NIH budget passed Congress with an increase in funding year over year, and barriers to grant overhead cuts and multiyear grant funding. But for now, there is still some lingering uncertainty in the U.S. academic and government market. The second-half improvement 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 multiyear agreements worth more than half $1 billion over multiple years. Accordingly, we are establishing our fiscal year 2026 guidance for reported revenue growth of 4% to 5%, with 1% to 2% organic revenue growth for the full year and an approximate 1.5% revenue growth contribution from M&A.

This all implies constant exchange rate revenue growth of 2.5% to 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 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 to 300 bps operating profit margin improvement in 2026, including a 50 bps currency headwind. This implies, in principle, 300 to 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 million to $120 million.

Finally, in fiscal year 2026, we expect non-GAAP EPS growth of 15% to 17%, including a strong 8% or approximately $0.15 expected currency headwind, which, again, implies 23% to 25% constant exchange rate non-GAAP EPS growth compared to 2025. Turning to current results now on Slide 4. In Q4 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 bps 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.

Fourth quarter 2025 non-GAAP diluted EPS was $0.59, down from $0.76 in 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 gross 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 2024, volume deleverage, and strong currency and tariff headwinds. Please turn to 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 percentage. Solid revenue growth in Chemspeed lab automation was more than offset by the declines in NMR instrumentation. Biopharma revenues were weak, resulting from soft bookings in 2025. In 2025, we had revenue from a 1.2 gigahertz NMR in the UK, our second gigahertz-class NMR of 2025, compared to four gigahertz NMRs in 2024.

The two fewer gigahertz systems resulted in a roughly $20 million revenue headwind for 2025 revenues. We are expecting just one gigahertz NMR system in revenue in 2026, as present gigahertz-class NMR funding activity 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 percentage, with growth in microbiology and infection diagnostics driven by ELITech Molecular Diagnostics, as well as by our Optics division driven by our applied markets and security detection growth. This was partially offset by softness in mass spectrometry, as strong orders for the recently launched timsOMX and timsMETABO mass spectrometers are expected to start to convert into revenue mostly in 2026.

On Slide 7, Bruker Nano 2025 revenues were $1.1 billion, a decline in the low-single-digit percentage, as solid growth in spatial biology driven by NanoString and robust biopharma growth was more than offset by declines in academia and industrial markets. Semiconductor metrology revenues were flat for the year, with a strong semi order book in 2025, which is expected to drive stronger semi performance in 2026. Finally, 2025 BEST revenues declined in the mid-single-digit percentage, net of intercompany eliminations, due to soft superconducting demand for clinical MRI systems. However, we received major multiyear orders at the end of the fourth quarter of 2025 and at the very beginning 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 also is expected to go into revenue mostly late in 2026. Moving to Slide 8 now. We highlight our Project Accelerate 3.0 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 on novel and differentiated diagnostics opportunities, with novel microbiology and infectious disease molecular diagnostics opportunities.

I will 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 are entering the rapid AST market with the Wave platform, hoping to get FDA clearance for the first claim this year in 2026. In molecular diagnostics, we intend to expand into second-generation affordable syndromic panels on our Genius 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 are excited about our next-gen automated and digitized self-driving lab, something that we just announced on Monday at the SLAS conference here in Boston.

As I have 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. Finally, we continue to benefit from the AI boom indirectly in 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 on Slide 9, 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 revenue is increasing. A year ago in 2024, it was 35%.

Now it is at 38%, and, in fact, that part was growing organically also in 2025. Our end-market growth is as you would expect now that more than 60% of our revenue is coming from the Project Accelerate 3.0 focus areas and with particularly good growth that we are expecting also in terms of orders and revenue from biopharma, diagnostics, and 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. academic and government is still weak and had been weak throughout 2025 except for the first quarter. The rest of APAC has been very resilient and strong, and China, which used to be 16% to 17% of our revenue, has continued to decline, although we saw some nice order growth in Q4.

It is now just under 14% of our revenue. 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 have 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 to 300 bps above the LSG&Dx 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. 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 are pleased that revenue for the quarter came in about $20 million above our 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 20 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 Q4 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 Q4 2025, with organic revenue declines across all groups. BSI fourth quarter 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 Q4 2025, our Americas revenue declined in the low-teens percentage, European revenue declined in the high-single-digits percentage, and Asia-Pacific revenue grew in the high-single-digits percentage, including double-digit growth in China, all year over year. For our EMEA region, Q4 2025 revenue was up high-single-digits percentage year over year. Non-GAAP gross margin decreased 310 basis points in Q4 2025 to 49.4%. Factors impacting our gross margin in Q4 2025 are essentially similar to those impacting the operating margin in the quarter. In Q4 2025, we posted a non-GAAP operating margin of 15.7%, down 240 basis points compared to Q4 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 on a non-GAAP basis, as we realized approximately $25 million of cost savings in the quarter from our fiscal year 2025 cost-saving initiatives. The fourth quarter 2025 tax rate was 29.9% compared to 32.5% in 2024, with the decrease driven primarily by discrete items in the fourth quarter 2025. On a GAAP basis, we reported diluted EPS of $0.10 versus $0.09 in Q4 2024. Weighted average diluted shares outstanding in the fourth quarter 2025 were 171.7 million, an increase of 19.7 million shares, or 13%, compared to Q4 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 Q4 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 Q4 2025, with CapEx investments at $22.6 million, which drove free cash flow of $207.3 million in Q4 2025, up about $54 million over Q4 2024. We finished 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 delevering 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 seven months and solid order momentum after two consecutive quarters of BSI book-to-bill above 1.0. We are initiating guidance for fiscal year 2026 as follows: reported revenue of $3.57 billion to $3.60 billion, representing reported growth of 4% to 5% compared to fiscal year 2025; organic revenue growth of 1% to 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 to 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 to 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 are guiding to non-GAAP EPS in fiscal year 2026 in a range of $2.10 to $2.15, or non-GAAP EPS growth of 15% to 17% compared to fiscal year 2025. Using current foreign exchange rates, we are estimating a currency headwind of approximately 8% to fiscal year 2026 EPS, implying non-GAAP CER EPS growth of 23% to 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 12/31/2025. Finally, a bit of color on Q1 2026. We have a strong year-over-year comparison, as we delivered mid-single-digit BSI organic revenue growth in Q1 2025, and margins and EPS in Q1 2025 were not yet impacted by U.S. import tariffs or academic and government funding disruptions. Therefore, we anticipate first quarter 2026 organic revenue to be down in the mid-single-digit percentage and operating margin and EPS to be down meaningfully compared to Q1 2025. We then expect operating margins and EPS stepping up each quarter thereafter throughout the rest of 2026. To wrap up, we are 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 are positioned to return to organic revenue growth in 2026, and we plan robust operating margin expansion and non-GAAP EPS growth in fiscal year 2026 and beyond. With that, I would like to turn the call over to Joe. Thank you very much. Thank you, Gerald. We will now open for questions. As a reminder, to allow everyone time for questions, we ask that you limit yourself to one question and one follow-up. Operator? Operator: Ladies and gentlemen, at this time, we will begin the question-and-answer session. To ask a question, you may press star and then one on your touch-tone telephones. If you are using a speakerphone, we 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 will 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: 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, just given the Q4 margins, you came in below, you are 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 op margin cadence, just given the significant ramp you have throughout the year, and anything you can provide on your comment around the meaningful Q1 op margin impact?

Frank Laukien: Okay. Puneet, I will start. Good morning. So as Gerald had explained, of the 100 bps lower margin than what we had expected in Q4 2025, the way we look at it is that the 50 bps from unfavorable mix is not likely to repeat itself. Those were idiosyncratic factors in Q4. Thirty bps from the late tariffs offset, I think, we will offset that successfully in 2026. And the 20 bps of stronger currency headwind is here to stay for now. And, in fact, 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 closer to $140 million or even higher than that. Not all these additional cost reductions will be effective in Q1 or Q2, but certainly by Q3, that should be all effective and then become annualized. So we have been pushing that by an additional 10% to 15%. And that is about the right amount. We do not want to underinvest in our opportunities, but we also, of course, are very committed to this 250 to 300 bps of operating margin expansion and the double-digit, in this case, reported 15% to 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 hopefully that addressed your questions.

I think you had something for Gerald on cadence. Gerald N. Herman: Yeah. Hi, Puneet. It is Gerald. I will just comment generally. As I mentioned in my prepared remarks, we had a quite strong Q1 2025. You may recall while we sort of hit the mid-single-digits range of total Bruker organic growth, at the BSI level, it was actually mid-single digits and quite substantial. We do not expect to hit that in the first quarter of 2026, 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. Some of what we do have in Q4 2025, about $25 million of cost savings that are reflected mostly in the OpEx category.

You will 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 will 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 is the direction. Frank Laukien: Okay. That is super helpful. Thanks for that. Just a Puneet Souda: quick follow-up. Frank, the new and competitive renewal awards are coming in lower, maybe it is due to the NIH mainly, and maybe it is 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 interactions so far in first quarter would appreciate any context there.

Thank you. Frank Laukien: Yeah. I mean, nobody is talking about a strong tailwind yet, but the absence of the strong headwind from last year feels a little bit better for U.S. academic and government. U.S. academic and government orders in Q4 were still quite weak. But I think that is bottoming out later than the trough in biopharma and industrial research demand, where we probably saw the trough midyear of last year. So there is still that. That is why everybody, including us in particular, is still cautious on growth rates this year. One to 2% organic growth rate is not a snapback to our typical growth rates. So we are still cautious on that. But I am, obviously compared to a really tough year 2025, encouraged that things are likely going to get better.

But I think until academia gets more confidence, and with an NIH budget that is flat or up plus 1% and with prohibitions against overhead cuts and multiyear grants, if this will pass, and I think there is a reasonable chance of that. Similarly, also encouraging on NSF and other science budgets, by the way—NASA, DOE, you name it. So I am encouraged with that, but I think it may not help us with orders all that much till the second half. Operator: Got it. Okay. Thank you. Thank you. Our next question comes from Michael Ryskin from Bank of America. Please go ahead with your question. Michael Ryskin: Hey, thanks for the question, guys. I want to dig into the margin a little bit. In terms of the 2026 versus Q4, I think you talked about Q4 coming in a little bit lighter, and you shifting some of those.

I guess asking it qualitatively, you pointed to the higher end of the range. What gives you confidence in your ability to take that, given that you were not able to execute on all the margin cost outs in the fourth quarter? Just confidence on ability to execute that. I have got a follow-up. Thanks. Frank Laukien: Well, we have taken out the high end of the $100 million to $120 million in cost already, and we are in the process of taking out additional cost which will become fully effective by midyear. So that is why we have a lot of confidence in that. And then some of the other margin idiosyncrasies—some of that has to do with pricing, supply chain. When we increase pricing, and until we then get an order, and until that order turns into revenue, that can, in many cases, be three or four quarters.

So the effect of all these things is that 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 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 unfavorable mix in Q4. We do not think that will repeat itself. Michael Ryskin: Okay. I appreciate that. And then for the follow-up, I want to 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 Q2. Just clarify, how much of that is the comps from prior year? I know Q1 2025 was surprisingly good. I think we did not see the hit from the end-market slowdown and from the NIH concern till 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 how your order book visibility factors into that? Just the confidence between that Q1 jumping. Gerald N. Herman: Yeah. It is both. Frank Laukien: Yeah. You are right. It is both. I mean, I cannot really disentangle that quantitatively, but qualitatively both, as your question already implies, play a role. So yes, the comps get easier and, in some cases, a lot easier in Q2. Q2 2025 was not good for us, so the comps do get easier even through the remainder of the year. So with easier comps and with gradually improving order momentum in many of the segments—even if not all of them—even China bookings were better in Q4. Applied semi was very strong.

Biopharma was very solid in bookings in Q3 and Q4 of last year. Industrial research, which was very slow in orders in Q2 as everybody was trying to figure out what is the new geopolitical and tariff landscape—as that has now stabilized for the time being, I think these markets have all picked up. Really, the outlier is still U.S. academic and government, 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 could be a Q4 or mostly 2027 effect in revenue, which is why we think longer term we return to our 200 to 300 bps above market organic revenue CAGR, but not yet this year. But even this—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 is easy math for you and for us. But even at that level, they are not fully back at our long-term growth rates. We hope to achieve those in 2027 and beyond. I hope that helps. Michael Ryskin: No. That is super helpful. Much appreciated. Thanks. Frank Laukien: Of course. Operator: Our next question comes from Tycho Peterson from Jefferies. Please go ahead with your question. Tycho W. Peterson: Hey, thanks. Frank, maybe just can we do a quick walk on the assumptions for some of the other end markets? I appreciate you have hit on academic already, but what are you assuming for biopharma this year?

What are you assuming for semi? Anything in microbiology that could be a headwind—we have heard about that from some of your peers. So maybe just give us a walk on some of the end markets. Gerald N. Herman: Hi, Tycho. It is Gerald. I will just talk generally about the end markets assumed in the guide. For biopharma, we are not assuming significant snapback. We are assuming low-single-digits organic growth. Our semi business, which was relatively flat on a revenue level for 2025, we are 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. Frank Laukien: Okay. And I would add, maybe one fine point. Molecular diagnostics, which is, of course, part of infectious disease diagnostics—we are expecting very good growth there this year, because we had about 30% more placements of these Genius platforms last year in 2025 than what we had planned. So that was excellent. That tends to then bring in pull-through in the following year. 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. academic and government 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. Tycho W. Peterson: And then, Gerald, I know we had a number of questions on margins. Can you comment on gross margins for this year? Are you expecting gross margin expansion? Gerald N. Herman: Yeah, we are. I mean, as you already heard, in the fourth quarter, we were somewhat below our expectations on the gross margin level, and that was partly driven by the mix issues, the tariff, and, of course, the foreign exchange pieces I highlighted earlier. We are not going to be able to do too much further on the foreign exchange piece, but on the mix, our view is that this is going to improve, and certainly from the tariff side, as you heard from Frank, we are expecting to recover that and mitigate any tariffs going forward. Frank Laukien: I think it is fair to say that of our operating profit margin expansion, about half of it comes from gross margin expansion.

Gerald N. Herman: And, of course, our OpEx. Frank Laukien: Right. But it is about half-half this year 2026 and probably beyond that as well. Tycho W. Peterson: Okay. And 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 how you think about that opportunity? Frank Laukien: Sorry. Those were not M&A contributions. Those were 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 have now owned for one or two years in these areas. Tycho W. Peterson: Okay. Thank you. Frank Laukien: Alright. Operator: Thank you. Our next question comes from Subhalaxmi T.

Nambi from Guggenheim. Please go ahead with your question. Subhalaxmi T. Nambi: 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 trend of customer spending interest in 2026? Frank Laukien: Yeah. We expect continued gradual improvement. While we do not specifically forecast backlog or book-to-bill, we believe that the book-to-bill trends over the last two quarters, which in BSI were above 1.0, will continue into this year, also aided by easier comps, at least again in Q2 through Q4. We may use a little bit of our still-high backlog this year, but we are not modeling anything that becomes all normalized to perhaps the five-and-a-half months level that we think would be a normal level for the way BSI is configured now.

Subhalaxmi T. Nambi: Thank you for that. And then you mentioned some new products in microbiology and diagnostics. Exiting 2026, what do these businesses look like, from a product roadmap perspective and a revenue growth perspective? Thank you. Frank Laukien: Exiting 2026. Okay. Yeah. So in microbiology, I assume that we will 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 is a lot of content coming out on our existing Genius platforms, both in Europe, and then we are also doing a first assay going into clinical trials for entering the U.S. market with these Genius platforms.

Again, that will not move the needle in 2026. It will 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. Subhalaxmi T. Nambi: The diagnostics business. Frank Laukien: Yeah. Well, the Genius is the diagnostics business. Syndromic panels will begin to roll out and get through regulatory approvals in Europe in late 2026 and 2027. So they will begin to affect our larger installed base in Europe first—Europe and Latin America, a few other countries actually. Then there will be a series of affordable syndromic panels coming out through and making it through the regulatory process, IVDR in this case, in 2027 and 2028. So that is just a flywheel.

You add something every year. It does not make a big difference in one year, but the cumulative effect over time is just very nice, as we have seen with molecular diagnostics. Even in 2025, that was a very nice growth market, mid- to high-single-digit growth market for us. Subhalaxmi T. Nambi: Perfect. Thank you so much. Operator: Our next question comes from Douglas Schenkel from Wolfe Research. Please go ahead with your question. Douglas Schenkel: Good morning, guys. Thank you for taking my question. So regarding first quarter organic revenue growth guidance, your description of the difficult comparison is accurate. However, there are two or three discrete items that seem like those should render the number a bit better. What I am thinking about are, 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 last May, and it takes time for that to come through quarter by quarter. But it seems like at this point, that should be more meaningful. And then, I guess the third I would point to is you did talk about an NMR placement slipping out of Q4, and maybe that gets recaptured in Q1. So when I think about those things, that does not seem consistent with mid-single-digit organic declines in Q1 even with the comp. Can you help us out? Gerald N. Herman: Yes, Doug, it is Gerald. With respect to the Q1 story, I think it is important to understand that some of our organic performance in Q1 2025 was pretty significant in terms of both mix and the actual operating profit performance.

We had strong order performance in semi, in particular, in Q4 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 2025 will not significantly improve our ability to execute on orders in the first quarter. So that becomes a headwind in its own right, but it is 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 think our commentary has been pretty consistent about hitting 2026. Not all of that is going to impact in Q1. I think we are expecting to see some improvement in Q2 from those, but not all of it hits in Q1 2026.

And then on the NMR side, we do not have any specific NMR pushouts. I mean, we had some challenges in BioSpin for sure from a mix perspective. We saw some of that in the fourth quarter. Frank Laukien: But the 1.2 did not get delayed. It was in April—UK 1.2 gigahertz. Maybe, Doug, I mean, you know us really well. You know a lot of the moving pieces. Obviously, as we have said, mid-single digits—that is quite a range. But we just wanted to highlight that our revenue almost certainly will still be down, and I think mid-single digits, which is a bit of a range, we realize that, is not just prudent and conservative. I think that is the right number of outcomes for Q1. It puts a little bit into perspective the greater optimism that we have in resuming organic growth, and not only at the 1% to 2% level, but more meaningfully in the subsequent three quarters of this year.

Douglas Schenkel: Okay. Alright. Thank you, guys. Frank Laukien: Thank you. Operator: Our next question comes from Luke England Sergott from Barclays. Jake: Hey, this is Jake on for Luke. Thanks for the question. 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: Yep. After a bit of a lull there when the CRO business went away—and then indeed we had very little on that—now China has recovered on the CRO side, and China is becoming a drug discovery and development biopharma powerhouse in its own right.

So that is beginning to become noticeable. And academic spending there—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 cannot really say this is stimulus, this is other academic funding. It has become more nebulous and diffused. But it was healthier. So we did not 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 revenues there. Jake: Great. Thanks for that. Frank Laukien: Hard to read any trends into that. Clearly, the biopharma piece in China is growing—no questions about that. Of course, some of that is growing also in India and also the rest of APAC.

From Korea to Taiwan to Japan, they all have improving biopharma trends for our particular tools. And, of course, there is a lot of semiconductor metrology in APAC outside of China—obviously Korea, but also Japan. So we are benefiting from that, mostly on the order side, which bodes well for gradual step-ups in 2026. Gerald N. Herman: I would just add that our guide for 2026 related to China is not strong. We are assuming that the basic revenue performance is largely flat, which is not a snapback from where it was several years ago. So we are not assuming strong growth in China in our current guide position. Jake: Great. Thank you. Operator: Next question comes from Daniel Gregory Brennan from TD Cowen. Daniel Gregory Brennan: Great, thank you.

Thanks for the questions. Maybe the first one would just be on U.S. academic and government, Frank and Gerald. I know you made some comments already. Did you guys say what the instrument growth or trend was for you from that customer base in 2025 and what is assumed in 2026? And I think, Frank, you mentioned multiyear funding was capped. I am just wondering, is that multiyear funding no longer a headwind, or just how do we think about that for 2026? Frank Laukien: Yeah, good question. On the multiyear funding, quite honestly, I am not so sure. I am a little confused by that as well. I know that all plays itself out. Even if it is 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, it makes more available. So even the multiyear grants are not bad for us even if they do not always immediately and directly fund another NMR or mass spec or microscope. For the first part of your question, bookings in academic and government in the U.S. for the year were down in the high teens. So not the worst outcome, but not a great outcome. That is clearly a significant headwind. We also felt it in revenues. But bookings were down significantly—in quarters, it was down more than 20% for the year. Daniel Gregory Brennan: And I think you said earlier, Frank, the outlook is expected flat in 2026. Is that right? Gerald N. Herman: This is for all of that stuff.

Frank Laukien: Yeah. So this was not a U.S.-specific comment. But, as you know, China and Japan and Europe, the academic and government almost everywhere else was much better than in the U.S. Some were strong. Some were just solid. So that was a comment for all of that kind of stuff, not a U.S.-specific comment. I do not know that we broke that out. Therefore, you would still expect U.S. academic and government to be down organically in revenue for the year 2026. Daniel Gregory Brennan: Got it. And if I can ask one more just on semis, just so the guide is flat for semis. I know that business had been growing double digits. You were very positive on the AI connection. Can you just elaborate a little bit, just to be sure? Gerald N. Herman: Yeah, just to be clear.

So with respect to full-year 2025 revenue performance, semi was flat. For full-year 2026 in our guide, we are expecting actually to be up in the low-single-digits range. And that is what we are currently thinking. By the way, just to clarify, even on the academic and government side, we are not expecting a significant growth level either in the U.S. or globally in our guide. Daniel Gregory Brennan: Right. Okay. Thank you very much. Operator: Our next question comes from Brandon Couillard from Wells Fargo. Brandon Couillard: Question. Frank, just directionally, which of the three BSI segments do you expect to lead in terms of revenue growth this year? And just one clarification on the ultra-high-field NMR systems. I think you said one install expected in 2026.

You used to carry a pretty large backlog there. Do you expect to go back to, say, three or four installations in 2027 and 2028? Is that just a timing thing or something like that? Thanks. Frank Laukien: Thank you, Brandon. You were asking about the groups, right? Brandon Couillard: Yes. Frank Laukien: So we think the weakest growth in the groups this year in 2026 will be in BioSpin, whereas B-Nano and CALID and BEST are expected to grow organically, comparable—they will 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 is going to be the laggard this year in revenue growth, and not normalize till 2027. Indeed, to your second part of your question, Brandon, there is some good activity, but trying to find funding, building consortia, etc.

So I do not know that we will go back to four a year, but I think we will hopefully be able to go back to two or three a year in revenue by 2027 and beyond. That is our expectation. So 2026 will be a bit of a lull, which goes hand in hand, but it is not the only reason that BioSpin will be the growth laggard in 2026 for us. Brandon Couillard: Great. And then, Gerald, what do you have penciled in for net 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 N. Herman: Yeah. Just on the last point, we are quite pleased with how the fourth quarter came in as far as working capital conversion and our actual cash flow. For the quarter, free cash flow came in about $207 million.

So quite pleased about that. As you already know, we have had a lot of effort related to inventory actions and happy to see that it is resulting in something positive. We could talk further about that. When you look at the interest expense line, we are thinking somewhere around the $35 million to $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 are 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. Operator: And with that, ladies and gentlemen, we will be ending today’s question-and-answer session. I would like to turn the floor back over to Joe Kostka for closing comments.

Gerald N. Herman: Thank you for joining us today. Bruker’s leadership team looks forward to meeting with you at an 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. Operator: Ladies and gentlemen, with that, we will conclude today’s conference call.