Danaher(DHR) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Results Overview Danaher reported strong third-quarter 2025 financial results, exceeding expectations, with the CEO highlighting strategic execution and future focus Key Financial Highlights Danaher reported strong Q3 2025 results, exceeding revenue, earnings, and cash flow expectations, with $908 million net earnings and $6.1 billion in revenue Third Quarter 2025 Key Financial Results | Metric | Value ($) | YoY Change (GAAP) (%) | YoY Change (Non-GAAP Core) (%) | | :--------------------------------- | :---------- | :---------------- | :-------------------------- | | Net earnings | $908 million | N/A | N/A | | Diluted net earnings per common share | $1.27 | N/A | N/A | | Adjusted diluted net earnings per common share | $1.89 | N/A | N/A | | Revenues | $6.1 billion | +4.5% | +3.0% | | Operating cash flow | $1.7 billion | N/A | N/A | | Free cash flow | $1.4 billion | N/A | N/A | CEO Commentary and Strategic Focus CEO Rainer M. Blair expressed encouragement with the third-quarter results, attributing success to DBS-driven execution, bioprocessing momentum, and strong respiratory revenue at Cepheid - Third quarter results exceeded revenue, earnings, and cash flow expectations, driven by DBS-driven execution, bioprocessing momentum, and strong respiratory revenue at Cepheid[2] - Strategic focus areas include investing in breakthrough innovation, enhancing commercial execution, and driving meaningful productivity gains across businesses[2] Full Year 2025 Financial Outlook This section outlines Danaher's full-year 2025 financial outlook, including adjusted diluted net earnings per common share guidance, core revenue growth forecasts, and supplemental forward-looking assumptions Adjusted Diluted Net Earnings Per Common Share Guidance Danaher is maintaining its full-year 2025 adjusted diluted net earnings per common share guidance range of $7.70 to $7.80 Full Year 2025 Adjusted Diluted Net Earnings Per Common Share Guidance | Metric | Guidance Range ($) | | :------------------------------------------ | :--------------- | | Adjusted diluted net earnings per common share (non-GAAP) | $7.70 - $7.80 | Core Revenue Growth Forecast For the full year 2025, the company expects non-GAAP core revenue to grow low-single digits year-over-year, with Q4 core sales growth also projected at low-single digits Full Year and Q4 2025 Core Sales Growth Forecast (Non-GAAP) | Segment | Q4 2025 Forecasted Core Sales Growth (%) | Full Year 2025 Forecasted Core Sales Growth (%) | | :---------------- | :----------------------------------- | :---------------------------------------- | | Biotechnology | ~+5% | N/A | | Life Sciences | -Low-single digit | N/A | | Diagnostics | Flat | N/A | | Total Company | +Low-single digit | +Low-single digit | Supplemental Forward-Looking Assumptions Key assumptions for the fourth quarter 2025 include an estimated 2.5% increase in sales due to currency exchange rates, corporate expense of approximately $(85) million, net interest expense of approximately $(50) million, and an effective tax rate of approximately 17.0% Q4 2025 Supplemental Forward-Looking Assumptions | Metric | Estimate (Q4 2025) | | :-------------------------------- | :----------------- | | Impact of currency exchange rates on sales | ~+2.5% | | Corporate expense | ~$(85) million | | Interest expense, net | ~$(50) million | | Effective tax rate | ~17.0% | Company Profile This section provides an overview of Danaher Corporation, a leading global life sciences and diagnostics innovator About Danaher Danaher Corporation is a leading global life sciences and diagnostics innovator, dedicated to advancing science and technology to improve human health - Danaher is a leading global life sciences and diagnostics innovator, focused on accelerating science and technology to improve human health[7] - The company's advanced science and technology facilitate faster, more accurate diagnoses and reduce the time and cost for developing and delivering therapies[7] - Danaher employs approximately 63,000 associates worldwide, committed to scientific excellence, innovation, and continuous improvement[7] Consolidated Financial Statements This section presents Danaher's consolidated condensed statements of earnings for the three and nine-month periods ended September 26, 2025 Consolidated Condensed Statements of Earnings For the three-month period ended September 26, 2025, Danaher reported sales of $6,053 million, a gross profit of $3,523 million, and an operating profit of $1,154 million Consolidated Condensed Statements of Earnings (Three-Month Period Ended) | Metric | September 26, 2025 ($ millions) | September 27, 2024 ($ millions) | | :---------------------------------- | :------------------------------ | :------------------------------ | | Sales | 6,053 | 5,798 | | Cost of sales | (2,530) | (2,397) | | Gross profit | 3,523 | 3,401 | | Selling, general and administrative expenses | (1,991) | (2,060) | | Research and development expenses | (378) | (383) | | Operating profit | 1,154 | 958 | | Other income (expense), net | (14) | 102 | | Interest expense | (67) | (87) | | Interest income | 3 | 4 | | Earnings before income taxes | 1,076 | 977 | | Income taxes | (168) | (159) | | Net earnings | 908 | 818 | | Diluted Net Earnings Per Common Share | $1.27 | $1.12 | | Diluted Shares Outstanding | 713.7 | 729.4 | Consolidated Condensed Statements of Earnings (Nine-Month Period Ended) | Metric | September 26, 2025 ($ millions) | September 27, 2024 ($ millions) | | :---------------------------------- | :------------------------------ | :------------------------------ | | Sales | 17,730 | 17,337 | | Cost of sales | (7,173) | (7,021) | | Gross profit | 10,557 | 10,316 | | Selling, general and administrative expenses | (6,209) | (5,736) | | Research and development expenses | (1,160) | (1,142) | | Operating profit | 3,188 | 3,438 | | Other income (expense), net | (135) | 7 | | Interest expense | (210) | (217) | | Interest income | 17 | 103 | | Earnings before income taxes | 2,860 | 3,331 | | Income taxes | (443) | (518) | | Net earnings | 2,417 | 2,813 | | Diluted Net Earnings Per Common Share | $3.37 | $3.80 | | Diluted Shares Outstanding | 717.9 | 740.1 | Reconciliation of GAAP to Non-GAAP Financial Measures This section reconciles GAAP to non-GAAP financial measures, including adjusted diluted net earnings per common share, sales growth, cash flow, and related notes Adjusted Diluted Net Earnings Per Common Share For the three-month period ended September 26, 2025, GAAP diluted net earnings per common share was $1.27, which adjusted to $1.89 on a non-GAAP basis, primarily due to amortization of acquisition-related intangible assets Diluted Net Earnings Per Common Share Reconciliation (Three-Month Period Ended) | Metric | September 26, 2025 ($) | September 27, 2024 ($) | | :------------------------------------------ | :------------------- | :------------------- | | Diluted Net Earnings Per Common Share (GAAP) | $1.27 | $1.12 | | Amortization of acquisition-related intangible assets | 0.61 | 0.57 | | Fair value net (gains) losses on investments | 0.02 | (0.14) | | Impairments | 0.14 | 0.30 | | Gain on a product line disposition | — | — | | Acquisition-related items | — | — | | Tax effect of the above adjustments | (0.15) | (0.14) | | Discrete tax adjustments | — | — | | Rounding | — | — | | Adjusted Diluted Net Earnings Per Common Share (Non-GAAP) | $1.89 | $1.71 | Diluted Net Earnings Per Common Share Reconciliation (Nine-Month Period Ended) | Metric | September 26, 2025 ($) | September 27, 2024 ($) | | :------------------------------------------ | :------------------- | :------------------- | | Diluted Net Earnings Per Common Share (GAAP) | $3.37 | $3.80 | | Amortization of acquisition-related intangible assets | 1.77 | 1.65 | | Fair value net (gains) losses on investments | 0.21 | (0.01) | | Impairments | 0.76 | 0.30 | | Gain on a product line disposition | (0.01) | — | | Acquisition-related items | — | 0.03 | | Tax effect of the above adjustments | (0.54) | (0.37) | | Discrete tax adjustments | 0.02 | (0.06) | | Rounding | (0.01) | — | | Adjusted Diluted Net Earnings Per Common Share (Non-GAAP) | $5.57 | $5.34 | Sales Growth and Core Sales Growth by Segment Total company GAAP sales growth for the three-month period was 4.5%, with core sales growth (non-GAAP) at 3.0%, led by Biotechnology Sales Growth (Decline) by Segment (Three-Month Period Ended September 26, 2025 vs. Comparable 2024 Period) | Segment | Total sales growth (GAAP) (%) | Impact of Divestitures (%) | Impact of Currency exchange rates (%) | Core sales growth (decline) (non-GAAP) (%) | | :---------------- | :------------------------ | :--------------------- | :-------------------------------- | :------------------------------------- | | Total Company | 4.5 % | — % | (1.5)% | 3.0 % | | Biotechnology | 9.0 % | — % | (2.5)% | 6.5 % | | Life Sciences | 0.5 % | — % | (1.5)% | (1.0)% | | Diagnostics | 4.0 % | 0.5 % | (1.0)% | 3.5 % | Sales Growth (Decline) by Segment (Nine-Month Period Ended September 26, 2025 vs. Comparable 2024 Period) | Segment | Total sales growth (decline) (GAAP) (%) | Impact of Acquisitions/Divestitures (%) | Impact of Currency exchange rates (%) | Core sales growth (decline) (non-GAAP) (%) | | :---------------- | :---------------------------------- | :---------------------------------- | :-------------------------------- | :------------------------------------- | | Total Company | 2.5 % | — % | (1.0)% | 1.5 % | | Biotechnology | 7.5 % | — % | (1.0)% | 6.5 % | | Life Sciences | (1.0)% | (1.0)% | (0.5)% | (2.5)% | | Diagnostics | 1.0 % | 0.5 % | — % | 1.5 % | Cash Flow and Free Cash Flow For the three-month period ended September 26, 2025, net cash provided by operating activities was $1,662 million, an increase from $1,513 million in the prior year, with free cash flow at $1,370 million Cash Flow and Free Cash Flow (Three-Month Period Ended) | Metric | September 26, 2025 ($ millions) | September 27, 2024 ($ millions) | | :------------------------------------------ | :------------------------------ | :------------------------------ | | Net cash provided by operating activities (GAAP) | 1,662 | 1,513 | | Total cash used in investing activities (GAAP) | (312) | (606) | | Total cash used in financing activities (GAAP) | (2,781) | (845) | | Payments for additions to property, plant & equipment (capital expenditures) (GAAP) | (292) | (298) | | Proceeds from sales of property, plant & equipment (capital disposals) (GAAP) | — | 11 | | Free cash flow (non-GAAP) | 1,370 | 1,226 | Notes to Non-GAAP Reconciliations The reconciliation notes detail specific adjustments made to GAAP figures to arrive at non-GAAP measures, including amortization, fair value adjustments, and impairment charges - Amortization of acquisition-related intangible assets (pretax) was $433 million for Q3 2025 and $1,269 million for the nine-month period[18] - Net (gains) losses on equity and limited partnership investments (pretax) were $15 million for Q3 2025 and $149 million for the nine-month period[18] - Impairment charges for Q3 2025 included $86 million (pretax) for technology/intangible assets in Biotechnology and $15 million (pretax) for a trade name in Diagnostics[18] - Discrete tax adjustments for Q3 2025 had no net impact, while the nine-month period included net discrete tax charges of $12 million[21] Statement Regarding Non-GAAP Measures Danaher uses non-GAAP measures to provide investors with additional insights into long-term profitability trends, underlying business growth, and cash generation capabilities - Non-GAAP measures are used to understand long-term profitability trends, identify underlying growth trends, and assess the ability to generate cash without external financings[26][27] - Exclusions for Adjusted Diluted Net Earnings Per Common Share include amortization of acquisition-related intangible assets (due to inconsistent timing/size of acquisitions) and restructuring charges (incremental to ordinary business activities)[27] - Core sales exclude the impact of currency translation (not under management's control) and the effect of acquisitions and divested product lines (due to varying timing/size of transactions)[27] Important Disclosures This section provides important disclosures regarding forward-looking statements and the use of non-GAAP financial measures Forward-Looking Statements The release contains forward-looking statements regarding anticipated financial results, competitive positioning, and future events, which are subject to various important factors and risks - Statements regarding anticipated financial results for Q4 and full year 2025, long-term competitive positioning, and future events are considered forward-looking[11] - Important factors that could cause actual results to differ materially include tariffs, global economic instability, uncertainties in AI development, global health crises, competition, and risks related to acquisitions and cybersecurity[11] - The company does not assume any obligation to update or revise any forward-looking statement, except as required by applicable law[11] Non-GAAP Measures and Supplemental Materials This earnings release includes non-GAAP financial measures, which are provided in addition to GAAP measures, with detailed reconciliations and information available online - The earnings release contains non-GAAP financial measures, which are explained and reconciled to GAAP measures in the supplemental reconciliation schedule[9] - Additional information, including the Quarterly Report on Form 10-Q, earnings release, slide presentation, and non-GAAP reconciliations, is available on Danaher's investor website[10] Corporate Information This section provides corporate information, including details on the investor conference call and contact information Conference Call and Webcast Information Danaher hosted an investor conference call and webcast on October 21, 2025, at 8:00 a.m. ET to discuss third-quarter results and financial guidance - An investor conference call and webcast were held on October 21, 2025, at 8:00 a.m. ET to discuss Q3 results and financial guidance[5] - The call and accompanying slide presentation were webcast on the 'Investors' section of Danaher's website, with replays available[5][6] Contact Information For investor relations inquiries, contact John T. Bedford, Vice President, Investor Relations, via email or phone - Investor Relations Contact: John T. Bedford, Vice President, Investor Relations[12] - Email: investor.relations@danaher.com, Phone: (202) 828-0850[12]