Financial Data and Key Metrics Changes - Bruker's reported revenues for Q2 2025 decreased by 0.4% year over year to $797.4 million, with an organic revenue decline of 7% [16][26][27] - Non-GAAP diluted EPS was $0.32, down 39% from $0.52 in 2024, primarily due to organic revenue decline, tariff impacts, and foreign exchange headwinds [18][29] - Non-GAAP operating margin was 9%, a decrease of 480 basis points year over year, impacted by lower revenue absorption and additional costs [18][28] Business Line Data and Key Metrics Changes - The Scientific Instruments (BSI) segment experienced a 7.2% organic revenue decline, with BSI Systems declining roughly 10% [27][28] - The CALID Group revenue increased in the low teens percentage, driven by strong growth in microbiology and infection diagnostics [20] - BEST revenues declined in the low teens percentage due to softness in the clinical MRI market [21] Market Data and Key Metrics Changes - Americas revenue declined in the low double digits percentage, while European revenue also saw a similar decline [27] - Asia Pacific revenue grew in the low single digits percentage, despite a low single-digit decline in China [27] - EMEA region revenue was up in the high single digits percentage [27] Company Strategy and Development Direction - The company is expanding cost-saving initiatives, aiming to reduce annual costs by €100 million to €120 million, affecting all business areas [14][31] - Bruker is focused on reaccelerating growth in the post-genomic era, particularly in biopharma drug discovery tools [12][24] - The company anticipates a return to organic revenue growth of 200 to 300 basis points above market levels beyond 2026 [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the life science research instruments market is under pressure due to U.S. academic funding headwinds and delays in China stimulus [8][9] - The company expects a flat constant exchange rate revenue growth and an organic revenue decline of 2% to 4% for fiscal year 2025 [15][32] - Management remains cautiously optimistic about a partial recovery in fiscal year 2026, driven by significant margin improvements and cost reduction initiatives [35] Other Important Information - The company is observing tariff settlements and anticipates that global biopharma and industrial companies will accelerate investments once uncertainties are resolved [11][12] - Bruker is leveraging its backlog, which has slightly decreased from seven months to 6.5 months, to manage revenue expectations [39][98] Q&A Session Summary Question: Why is the backlog not helping this year? - Management indicated that while the backlog is being utilized, production and delivery times are planned and locked in by customers, leading to a slight decrease in backlog duration from seven months to 6.5 months [39] Question: What is the expectation for ultra-high field revenue recognition? - Management does not expect ultra-high field revenue recognition in Q3 but anticipates it in Q4 [43] Question: Why were cost-saving initiatives not initiated sooner? - Management explained that initial savings programs were started earlier in the year, but the expansion of cost-saving measures was necessary due to emerging headwinds [48][50] Question: What is the outlook for fiscal year 2026? - Management expressed uncertainty about growth in 2026 but emphasized the commitment to significant margin expansion and EPS growth regardless of market conditions [51][56] Question: How is the company addressing the free cash flow burn in Q2? - Management noted unusual outflows related to tax payments, which are not expected to recur, and anticipates a return to normal cash flow levels [65][66] Question: What is the visibility into the Q4 ramp? - Management acknowledged that Q4 typically sees a significant ramp, but visibility remains challenging due to current market conditions [101]

Financial Data and Key Metrics Changes - Bruker's reported revenues for Q2 2025 decreased by 0.4% year over year to $797.4 million, with an organic revenue decline of 7% [14][24][25] - Non-GAAP operating margin for Q2 2025 was 9%, a decrease of 480 basis points year over year due to lower revenue absorption, additional tariff costs, and currency headwinds [15][26] - Diluted non-GAAP EPS for Q2 2025 was $0.32, down 39% from $0.52 in Q2 2024 [15][27] Business Line Data and Key Metrics Changes - The Scientific Instruments (BSI) segment experienced a 7.2% organic revenue decline, with BSI Systems down approximately 10% [25][26] - The CALID Group revenue increased in the low teens percentage, driven by strong growth in microbiology and infection diagnostics [18] - BEST revenues declined in the low teens percentage due to softness in the clinical MRI market [19] Market Data and Key Metrics Changes - Americas revenue declined in the low double digits percentage, while European revenue also saw a similar decline [25] - Asia Pacific revenue grew in the low single digits percentage, despite a low single-digit decline in China [25] - EMEA region revenue was up in the high single digits percentage [25] Company Strategy and Development Direction - The company is expanding cost-saving initiatives, aiming to reduce annual costs by €100 million to €120 million, affecting all business areas [12][29] - Bruker is focused on reaccelerating growth and enhancing market share in the post-genomic era, particularly in biopharma drug discovery tools [22][23] - The company anticipates a return to organic revenue growth of 200 to 300 basis points above market once economic uncertainties abate [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the life science research instruments market is under pressure due to U.S. academic funding headwinds and delays in China stimulus [6][7] - The company expects a flat constant exchange rate revenue growth and an organic revenue decline of 2% to 4% for fiscal year 2025 [12][30] - Management remains cautiously optimistic about a partial recovery in fiscal year 2026, driven by significant margin improvements and cost reduction initiatives [23][33] Other Important Information - The company reported a significant decline in operating cash flow of $85 million, primarily due to the timing of tax payments [28] - The backlog has slightly decreased from seven months to 6.5 months, indicating some utilization of backlog [38][98] Q&A Session Summary Question: Why is the backlog not helping this year? - Management indicated that while the backlog is being utilized, production and delivery times are planned and locked in by customers, leading to a slight decrease in backlog from seven months to 6.5 months [38] Question: What is the expectation for the UHF magnets in Q3 or Q4? - Management does not expect revenue recognition for ultra-high field magnets in Q3 but anticipates it in Q4 [41] Question: What is the commitment to cost savings? - Management confirmed a commitment to the €100 million to €120 million cost savings, independent of market conditions or recovery [49] Question: What are the expectations for fiscal year 2026? - Management expressed that while they hope for some modest growth or partial recovery, they are preparing for a no growth scenario and expect significant margin expansion regardless [55] Question: How is the free cash flow burn in Q2? - Management noted unusual outflows related to tax payments, which are not expected to recur, and anticipates a return to normal cash flow [63] Question: What is the outlook for U.S. academic funding? - Management expects U.S. academic government funding to be down 20% to 25% for fiscal year 2025, with no predictions for fiscal year 2026 [92]