Bruker(US:BRKR)2024-11-05 16:53Financial Data and Key Metrics Changes - Q3 2024 reported revenues increased 16.4% year-over-year to $864.4 million, with organic revenue growth of 3.1% and a currency tailwind of 0.7% [16][35] - Non-GAAP operating margin was 14.9%, down 510 basis points year-over-year, primarily due to recent strategic acquisitions [17][35] - GAAP diluted EPS was $0.27, compared to $0.60 in Q3 2023, while non-GAAP diluted EPS was $0.60, down 18.9% from $0.74 in Q3 2023 [18][35] Business Line Data and Key Metrics Changes - Bruker BioSpin Group revenue was $633 million, growing in the high-teens percentage, with strong contributions from automation and services [22] - Bruker CALID Group revenue was $773 million, with low-double-digit CER revenue growth, driven by microbiology and infectious disease diagnostics [23] - Bruker NANO revenue was $780 million, with mid-teens percentage CER revenue growth, supported by semiconductor metrology [24] - BEST segment CER revenues grew in the low-single digits, driven by research instruments and technology for semiconductor lithography [25] Market Data and Key Metrics Changes - Americas revenue grew in the low-single digits, while Asia-Pacific revenue (excluding China) was up double-digit percentage [40] - China revenue declined low double-digits, and European revenue declined low single-digit percentage year-over-year [40] - EMEA region revenue was up mid-teens percentage year-over-year [40] Company Strategy and Development Direction - The company is focused on integrating and improving recently acquired businesses to drive above-market organic revenue growth and significant margin expansion in 2025 and beyond [15][33] - Strategic expansion into single-cell spatial molecular diagnostics and lab automation is expected to contribute to profitable growth [33] Management's Comments on Operating Environment and Future Outlook - Management noted that delayed recoveries in biopharma and China demand will not significantly benefit fiscal year 2024, leading to a lowered guidance [14][45] - The company anticipates low-single-digit organic revenue growth in Q4 2024, following a strong Q4 2023 [49] - Management expressed optimism about stimulus orders from China and improvements in biopharma demand in 2025 [63][64] Other Important Information - The company is adjusting its fiscal year 2024 guidance to a revenue range of $3.34 billion to $3.37 billion, with organic revenue growth of 3% to 4% [46] - Non-GAAP EPS guidance for fiscal year 2024 is now in the range of $2.36 to $2.41, down from a prior range of $2.59 to $2.64 [48] Q&A Session Summary Question: Impact of biopharma and China on guidance cut - Management indicated that the guidance cut is primarily due to a significant decline in China orders, which are down approximately 20% year-over-year, and slower recovery in biopharma [55][56] Question: Outlook for 2025 - Management acknowledged that estimates for 2025 would likely be lowered due to the current weakness in biopharma and China, with no specific guidance provided yet [58][64] Question: Confidence in above-market growth - Management expressed confidence in above-market growth driven by strong demand in diagnostics and semiconductor metrology, despite current challenges [61][66] Question: Book-to-bill ratio and order dynamics - The book-to-bill ratio for Q3 was below 1, but organic bookings growth in BSI was the best in several quarters, indicating positive momentum despite challenges in China and biopharma [88][89] Question: Margin dilution from acquisitions - Management confirmed that acquisition integration is on track, with expectations for significant margin improvement in the coming years [72][74]