TMO - Earnings call transcript Q2 2024 | Thermo Fisher Scientific Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Thermo Fisher Scientific 2024 Second Quarter Conference Call. [Operator Instructions] I would like to introduce our moderator for the call, Mr. Rafael Tejada, Vice President, Investor Relations. Mr. Tejada, you may begin the call.

Rafael Tejada

you us. thank and morning, for joining Good

Please On our Officer; Chairman, with and me will Financial and webcast on is Marc Casper, today is Officer. Chief President and Investors Williamson, be Vice the this live Senior call being call Stephen President note the in and archived Chief release until XXXX. A available copy section of the Investors under earnings X, thermofisher.com, the second heading News, XXXX the our August the press of of our website, Events our quarter and website Presentations Financials. heading section of is under Executive

result we of me may may harbor make before indicated safe the under the forward-looking plans Litigation cover we statement. company's the those the the our constitute future report including statements file factors, of of website with are as important expectations, these harbor Act on results XX-K provisions So safe Form SEC Actual the begin, Form on Securities most by of let company's XXXX. about and report filings. XX-Q, and subsequent which under differ Private and Investors that purposes Various in a section forward-looking Financials Reform the from for remarks materially on various our prospects available quarterly briefly in heading statements recent SEC discussed those annual

date at today. do not in the as forward-looking point should any subsequent disclaim to these as forward-looking future, some Therefore, obligation if so even our While statements statements we our update to views on elect may specifically any estimates of rely to representing you we change.

is under heading financial our GAAP. to in earnings accordance generally call, the XXXX of release of non-GAAP A we our accepted section directly measures will accounting Financials. of press available measures the certain measures prepared the not in Investors website or quarter this with most GAAP financial also Also second reconciliation and these comparable principles in the be referring during to

So Marc. turn call the to with now over that, I'll

Marc Casper

our Raf, call. thanks Good and for quarter second morning, today us thank you. everyone, for joining

As the they excellent you year. to for release, of our high as and very team world Business had System. we making results deliver This is We're the results differentiated to a for continued in our progress to execute customers press I'm saw great PPI proud of make growth our a the enable healthier, at strategy our safer. level result our proven cleaner and success quarter.

So first, let the financials. me recap

the in billion. quarter revenue Our was $XX.XX

adjusted delivered operating $X.XX income quarter of Our Adjusted strong achieving billion. per a X% year-over-year share. QX increase another adjusted increased EPS operating And in XX.X%. margin $X.XX performance, we was to to

Our results. second and our allowing performance the record again continues raise once track us of in our guidance to delivering is quarter differentiated

by we'd performance conditions quarter, end In underlying market. out expected. our to market the Turning as played second

delivered execution in our drove excellent of team's we Our and the sequential share end markets. improvement quarter, in a in growth gain X all

customer segment. provide revenue you with vaccine the biotech. headwind in led by for Starting We was our Performance runoff in with me quarter The in low resulted a pharma and this Let the digits and clinical quarter. context. single declined for research the therapy some X-point businesses. additional biosciences second and

both electron microscopy in and quarter. our grew in markets, and the In we growth industrial these single strong digits and the low delivered during in academic applied, we In business. government end

declined we the in single diagnostics in Finally, and low digits. health care,

impacted growth revenue. market this in the reminder, testing-related is of by end a the COVID-XX reported As runoff

as and delivered immunodiagnostics our core businesses During growth, well our market the revenue by quarter, transplant the team channel. health diagnostics care good as highlighted

I at feel the very point I a progress quarter As on on the made about we've year. of reflect our and performance halfway basis, the during the good year-to-date

excellent. as are been team's execution out markets has we and playing our end expected, Our

an to turn strategy. our now I'll update on growth

of X our with consists strategy trusted and partner unparalleled a pillars: our customers commercial As status high-impact engine. our innovation, reminder,

a of products our It launched at first as innovation with begin the Spectrometry we quarter further pillar. for was new Starting position we new Mass Conference, fantastic instruments. American across high-impact a Society industry-leading with in our strengthening launched the of analytical number technologies the businesses. I'll

At proteomics. the unprecedented It targeted conference, Thermo we validate our Thermo Stellar advance researchers needed Stellar work. Scientific introduced quantitation, mass to capabilities spectrometer, by extends is insights biomarker which the for the candidates. leadership to Scientific their enabling in offers The used analytical

Astral the really our publications was date, of for this breakthrough, year. just had to last discovery Orbitrap we're sharing the It incorporated To protein and getting the we've that customer It's we Thermo more testimonials groundbreaking a started. launched exciting hear Orbitrap that the used Astral. perfect impact XX complement power incredibly Scientific to than of

we and biopharma. new for Scientific additions at Thermo build-for-purpose spectrometer. launched ASMS, applications biology of Also Tribrid X mass specific Tailored Ascend Orbitrap multiomics, the to structural

and to the characterize industry-leading continue biologics. Orbitrap complex including protein our sensitivity instruments and elevate speed by difficult These most Thermo offering Scientific portfolio detect samples, to enhanced

This manufacture our our use we quarter, customers new In film a of bioprocess rather materials material plant-based kind their than business, introduced solutions own its goals. provide products sustainability for carbon launched help of meet first bio-based single-use our containers also lower fossil biologics. we These to for fuel to the bioproduction technologies.

help deliver a Scientific Freezers efficiency that business, line And TSX we ENERGY energy meet in sustainability new Thermo of performance, Products Universal industry-leading our to goals. labs Series their Laboratory ULT STAR-certified launched

highlights to and pillars our of Turning the second [indiscernible]. third

strengthen with the continue earned engine trusted we status the partner quarter, industry-leading During we've commercial customers. and our our to

Our on us and important their to productivity their help customers rely innovation, accelerate work. their increase advance

near- we customers enable to success. time of lot their can priorities and long-term a that so spent with their understand I connecting

be we unique stronger advance an relationships, even our for continue customers. result of our partner these a capabilities to As to

for gene We antibodies chain high-value a supply a new end-to-end trial vaccines. pharma give biologics, the tailored you to examples from me the Let cell including Netherlands with and clinical leading Bleiswijk therapies, offer couple and and facility the biotech throughout second quarter. of supply ultra-cold services in expanded in support customers clinical our therapies,

innovation packaging and up tracking at Center opened innovative supply, tracing site for lab and to and our planning. global enhanced our Valley, real-time state-of-the-art including trial trial solutions solutions, set clinical in clinical showcase We a also Pennsylvania new

In advanced addition, quarter. our customers with collaborations and during partnerships we the

you of couple give Asia examples region. a the in me Pacific Let

To investments we research and expanded renewable our in scientific in care, support health presence energy, Indonesia's growing capabilities further country. the and

and Group storage with Research We cell technology to therapy energy Institute National are collaborating help stem the with and the well Battery advance Mandaya to advance research as development. battery cell as Hospital

the Mirxes, address the the a Southeast genomic Asian sequencing of validate we made and In collaboration a to advanced and solutions specifically Singapore, needs population. to develop next-generation University announced clinically National with company, RNA technology Hospital local testing

[indiscernible] quarter So growth our we of a strong executing strategy.

Let empowers excellent PPI Business to me quarter. of System, the engages better now and which turn a find enabled way colleagues PPI day. our all during every to our execution

business. allegiance. to operational efficiency adopted where great efforts manufacturing During incredibly been the research It's came this has of in products, and business, our equipment meaningful our further drive with the clinical how quarter, PPI in impressed it efficiency away improve to opportunity lab customer our and the see improvements driving I PPI to see had also the in I to progress is

cash our in profitability see in quarter. you delivered Business and flow the the impact results, that System positive Ultimately, in reflected we QX PPI our of strong

We the also our social corporate priority advanced responsibility score quarter. in

the make world work important to help a we enabling company, place customers. by mission-driven the better of our a As

our by being a positive of We impact also a created planet. our and supporting steward communities good

We make continue QX. in on our sustainability environmental to map progress road

certification XX As targets XXXX, set part for which of X include the for our manufacturing resources, world's waste sites. to warehouse natural safeguarding commitment we have and

on we're During our certification, the goals. to sites our quarter, more X X and track of waste achieve achieved

You transparent journey which can commitment we published all account our corporate of stakeholders. report our about in as much fulfill responsibility during social our a progress was quarter. society learn the our provides The more to our and XXXX of report,

update me give capital on Let you now deployment. an

combination disciplined our returning capital M&A to and continue shareholders. We our of a successfully strategy, is which to capital deployment execute

Fully completed quarter month. our great and colleagues welcome after to ended, the was the to acquisition earlier our of company new this Olink, we it

proven Olink highly addition As is spectrometers. and you complementary leading solutions. The mass our is technology to proteomic transformative next-generation know, of industry-leading of provider Olink's a

Olink protein leadership our our great it further to ecosystem. is a advances addition as differentiated research

to will us Our bring the world-class [indiscernible] world. to technology engine around this commercial enable

use understanding of the next-gen scale and we're -- proteomics me, industry-leading and scale, providing further quality biology quality to of at data data accelerate By enhance at position human excuse scientific increasing in the meaningfully a great breakthroughs.

I'm their So grateful of as I what our on success. proud our the reflect and quarter, contributions accomplished team for to

turn now to our me Let guidance.

in We share. we're raising in his the to billion quarter, take and second XXXX in guidance. the will to through details you expect be per the our of $XX.XX $XX.X in the revenue performance be $XX.XX adjusted EPS range Stephen billion to to now $XX.X remarks. of strong range our Given

results So proven to PPI QX, of we strategy growth summarize driven another our takeaways our quarter System. by Business delivered and from strong

and We this our status trusted continue industry and to leadership. reinforces success, enable our customer partner

Our to to brighter results value create an allowed the all in in our well guidance future differentiated strong again for our stakeholders and QX positioned for continue deliver to our We're as raise build XXXX for year. we us performance company. of even

Williamson. now over I'll our hand CFO, Stephen that, to Stephen? the With call

Stephen Williamson

you segments. good I'll XXXX by provide our the color updated for and And everyone. results our conclude of X an company take I'll Marc, second total business through quarter morning, on overview then Thanks, providing our guidance.

high-level financial our view me of provide how into last the played get versus call. second earnings with the I performance, our out on at Before our you a of quarter let the time expectations details

execution, ahead conditions assumed of in mentioned as prior quarter guidance. Marc were excellent our QX enabled of what this As deliver We the to quarter, expected. us we we'd financials had in market another and

little revenue guide revenue That what with we'd million QX. organic of partially approximately the in growth point Core FX headwind. assumed $XX top to the of line. X.X revenue, over is which prior ahead offset slightly a higher percentage by translates was for Starting

operational the was net the bottom $X.XX of what lower was line. assumed strong performance, prior $X.XX year FX beat and for and the interest of within was tax from was to guide favorable Turning expense. QX. we was planning from Adjusted -- timing benefits in $X.XX from EPS the discrete $X.XX from ahead

Year-to-date I financing same [indiscernible] well prudent from In higher standpoint. my was than year. flow We're cost flow the to generation. took transaction guidance, the approach cash executing free last a prior free a period on cash Olink also

point halfway strong the positioned of deliver and well the to continue we'll at So year. we're performance,

Let was earnings to grew additional provide XX% X% the you from quarter with the $X.XX. quarter, adjusted some per detail on beginning last in GAAP QX, year. the share. up EPS me In $X.XX, now by EPS with QX

X% the QX, contribution slight a year-over-year. from X% line, components change On our revenue headwind QX revenue, reported organic exchange included X% acquisitions. reported The and top revenue a lower lower was foreign in of from

growth revenue another up growth this rounded organic strong basis. We And delivered core year-over-year sequential on QX, revenue organic in in improvement to flat quarter. core a

In growth. vaccines the $XXX revenue This represents pandemic-related approximately mainly million. a X% was headwind organic was quarter, from This therapies. and revenue to

by digits, to In mid-single grew Turning America geography. North digits, low mid-single grew performance which grew Europe single Asia QX, declined China, revenue digits. Pacific mid-single digits. our includes And also which organic

billion we operating the operational points was than operating basis to performance, quarter. our delivered respect With XXXX. higher in points $X.X QX adjusted XX basis And QX of XX last higher margin than adjusted XX.X%, income and year

the continued Total us productivity, than from focus appropriately the in as to very industry in management enabled benefit QX investments quarter, quarter cost on strong carryover XXX we our In continued further of the higher put our margin lower impact reflecting last actions well cost company to adjusted volumes, gross offset while to year. funding This advance basis leadership. as last place XX.X%, more in at than the year. came the points deliver

SG&A ongoing million the revenue Moving X.X% on in a percent details in of Adjusted the reflecting was expense $XXX investments our revenue. in innovation. was XX.X% quarter. QX, R&D manufacturing Total to of the our the high-impact quarter R&D P&L. of as was in

at below the results our Looking line.

net due QX was million $XX QX expense balances. than Our which interest to investment lower is $XX high XXXX million, and cash

net repurchases, were the X XX%. shares XXX year-over-year in option average by lower quarter was And Our adjusted QX, diluted rate tax approximately of driven million million dilution. share in

We cash investments flow from total Year-to-date expenditures. free $XX.X flow free to operations $X.X was with flow short-term the was balance billion of after Year-to-date billion and investing quarter capital cash cash $X.X million cash and $X.X $XXX billion Turning and debt. of the sheet. in ended billion. net

the was Our of adjusted X.Xx debt leverage debt end quarter to basis. a at ratio and X.Xx EBITDA the on gross net

total returns our on ROIC was comments on strong adjusted XX.X%, the company. my that Concluding company the investment generating we're performance, across reflecting

X%, QX business. in starting Sciences Now the organic segment reported and by than quarter. That was was revenue Solution. segment more lower X I'll by of than prior led provide of on this Life in some this our the Growth impact our biosciences offset year color declined performance business pandemic. X% revenue our the segments, with was

operating income Sciences operating year XX.X%, for basis X%. Solution quarter. increased adjusted Life margin versus XXX QX the points And was up prior adjusted

by deal During pandemic. to cost QX, the partially exceptionally with offset the we pull-through. appropriately job do manage an unfavorable delivered excellent continues which volume base and was The strong the team to of unwind productivity,

Instruments In reported grew growth and than year the revenue segment, X%, organic X% quarter. our prior higher Analytical the was

We continue strong business. microscopy to our growth deliver in very electron

X%. by In was productivity, the this XX.X%, points unfavorable adjusted And quarter, segment, than and margin investments. we is increased XX delivered lower strong mix strategic QX year-over-year. adjusted operating operating income more offset which basis In

strong quarter. were we see market diagnostics growth businesses in health in as by organic and year as Turning well Diagnostics. In the to the X% core our higher transplant Specialty QX, immunodiagnostics reported and care QX, channel. to than prior both underlying continue In led our revenue

QX increased QX Diagnostics And XXXX. for operating adjusted compared income flat was which adjusted operating to was X%. Specialty XX.X%, margin

we which the quarter, by strategic delivered investments. good is During offset productivity,

driven Biopharma business. Products segment revenue. QX by in organic Growth therapies the is reported QX Services the versus prior vaccines decreased of and by in Laboratory year quarter. finally, revenue and X% both led in research and runoff this in And the was our clinical growth segment, This

delivered In QX declined sequentially productivity, adjusted quarter, XX.X%, XXXX. which volume we XX%. by [ XXX and flat operating mix than QX lower points basis which is offset adjusted operating is strong more income the QX strategic unfavorable ] was margin investments. And to than XXXX,

Turning guidance. to now

growth revenue range our the XXXX revenue that the year. given XXXX. billion we're X% to EPS does of guidance for assume change core adjusted outlined, growth range expect this revenue declines Marc the X% in raising not revenue be The core full low still digits to QX, to assume continue of in to continue minus the we the single year, As $XX.XX. to strong of billion organic in now performance $XX.XX to our range market in positive rounding organic so we be guidance. year be will and $XX.X And We to of the improved $XX.X

proven and Our growth continue take System us to strategy execution again. will to Business enable PPI once share

between XX.X%, than XX.X% assumes slightly guide. adjusted range operating Our prior XXXX updated income an guidance margin higher and the

enable to midpoint $XXX for right costs our increase long-term million PPI Our Business EPS reflects appropriately a on and $XXX in interest end, us enable end further net to the the be guidance to And low in cost excellent manage expect System the to adjusted which is execution, of increase industry year. investments a to results $X.XX $X.XX. fund increase to $X.XX and on an high million range continuing range advance the the leadership. We by raise our in the the now

remain continue to really So differentiated year. We of performance. another outlook guidance in positioned increase well deliver enabling the strong for an quarter the execution, to

revenue to X% million and million $X.X the vaccines $XXX some total, a underlying guide we're you headwind assumptions $XXX of In the of of be revenue. the thought to of million XXXX, remind $X.X I of represents and guidance. testing In key or therapy-related from unchanged of that it'd billion behind year-over-year remain just this billion revenue. assuming to previous under helpful $XXX

no to adjusted that FX-adjusted year-over-year as And $X.XX to the is the prior saw both whole neutral assuming a of year, roughly EPS. we that offset FX for the we're remainder be the the would FX guidance. beat year change QX that see We versus revenue for in and for leading EPS

year, and in adjusted XXXX. And will we're range in billion. billion income to $X.X between $X billion and $X.X expect be assuming flow capital XX.X% billion cash to tax continue net of the free $X.X expenditures rate for We of the

$X assuming were In terms of already completed buybacks, capital in we're which share January. deployment, billion

$X.X Olink XXX to expect is billion return to share approximately this year million to diluted we deployed count $XXX million be acquire the shares. dividends, capital average approximately assumed of year We QX close. shareholders after and to shortly Full through

you midpoint with higher to QX. we to growth Relative good Finally, quarterly recommend the to in QX modeling I revenue I I the QX than help of X% in growth we modeling. Also your to modeling phasing touch higher organic wanted organic model guide, of to it on delivered in adjusted QX. core revenue in XX% year. recommend in And than X% EPS just over full QX, terms the be delivered of

point, XXXX [ deliver the continue positioned a to our So at to great halfway in stakeholders commitments. in And to for ]. we differentiated conclude, our deliver performance we're all on

Raf. With the to back that, over I'll turn call

Rafael Tejada

of portion we're ready for the Q&A call. the Operator,

Operator

[Operator Michael America. Bank Instructions] Our of with is from first question Ryskin

Michael Ryskin

on market to Marc, a in Congrats our start off XXXX Conference quarter. some comments you you initial the Vegas about for high-level made At expectations. Healthcare Great. one May, maybe.

you I just X next to way the XXXX, just exiting out, been, think year be market the you given entering X is that tools has expect XXXX. said how year would playing level you're below the historically it the

It's been months couple of a then. since

how got, view play of You've your hopefully, out. is going 'XX to

So in market that? above you maybe have do that performance can XXXX Thermo more given deliver now, sit confidence where assumption differentiated you how and

Marc Casper

question. you Mike, to the thanks was -- with earlier pleasure in quarter. for in a be the It

out, my frame and So just a of start kind just about one general let actually few me XXXX. of I'll thoughts, level talk

It was about think QX, team guidance. Really executed I raise to us when ahead good well. of financial our So really our expectations. performance. allowed It

and very now good expectations. the that it's of expansion The -- Clearly, opposed to now which other has performance differentiated see actual to very growth performance X% flat, core aspect is and to was strong. adjusted is elevated to of as relative the EPS margins. great, It

good I performance. about feel very the So

with market, I they expectations. our about were the when in line think And

decades how as the markets, our it X good of out. our terms all visibility improvement So to was the we X. for And to market markets, is see when the in about in performance enjoyed our returns of sequential across it's I think that all playing see growth within own we've that good had

So development. really positive a very

Capital the really billion half capital first outstanding and the System $X PPI feel about active good. return impact half results. of exciting half of year, at performance. deployment Business well of and positioned good through very it on delivering this deliver Olink. of and over deployed is been ultimately the We've of them strong to point acquisition of capital And we're very has a

When the going benefit about would you to in we're the when behind we're I I and is we a delivering think way year. market performance, We'll of view the give have XXXX, that just about of but think focused it year think I on January great of able a XXXX conditions. our not us, give to saw only how we be the you underlying

The expected. year as progressing is we

expect up, to better also going time. So that back we'll will -- this continue we into you that to performance give give months' our will market we'll the in And continue the improve of little year, than quarter being modestly that in quarter step the a -- will but give before. the 'XX. momentum few a details And and you the us half

Michael Ryskin

Fair on then China. enough. to And want Okay. focus I follow-up, my for

make terms or ahead end? of Or a here, that your can I your this is in of you think into but are you you you quarter. in Anything the some that digits heard it right, just so, something out think the heard surprising. Is you're mid-single bump want can And seeing continue what real seeing in that to quarter traction correctly, bit called grew if say I onetime? also a that and if sure that's I I expectations? there? temporary

Marc Casper

excellent. hearing Yes, is your

relatively a execution. delivered nice in in yes, was growth really the quarter. So the we easy quarter. did Comparison mid-single-digit good job, Team

in deliver characterize to would I nice the conditions terms by of a QX results. the job muted very and the -- solid a So as environment, but Mike. still Thanks, team

Operator

from is Our next question Jack Meehan.

Jack Meehan

about I by asking start wanted to LSS.

feedstock? think rate. sequential there, also updates talk you your customers where I growth. some seeing and heard you bioprocessing. led biosciences terms of had improvement the improvement you're on Can And in stand the genetic in this growth about So relative the sciences nice any

Marc Casper

That's segment Thanks probably to Life the really see the biosciences Solutions lab Jack. our about and question. every every adoption the most Sure, I our day, When there. think in points on biotech business. for segment, nice Science pharma the in important nice growth

really little area positive So was that terms business nice, investors. performance. great development of The always as bioproduction, progressing there. And is I'll into interest an which bit actually really to expected, quarter -- nice very a a is of exactly maybe our dive we

about progressing had had really in I year-over-year really bioproduction, we at orders, the nice facts I so in look a growth When had in sequentially, salient So orders, sequential orders. and book-to-bill, QX. growth when nice think favorable most revenue around we We growth well.

I our And I performance. others reported, at when about very look have that feel good

months segment, I about the the companion of then you've Science when in some previous diagnostics. So think important drivers. announcements seen the are And about Life those X few Solutions

Our clinical sequencing business well. is doing quite

So thanks the on LSS. for Jack, question

Jack Meehan

Excellent.

rotate AI. Okay. And to then to wanted

was a about just came on expecting. this the bit and you in the how in also better I spending Can customer patterns? book-to-bill updates quarter So in the than was segment talk

Marc Casper

Yes.

So out in was think normal certainly expected muted also impact quarter much are and at we very Instruments, market to levels positive. the in X% not playing of I we and pretty the conditions nice as the China. see growth Analytical I Yes, would about the say and when see it the the conditions yet,

revenue. those you cutting-edge look orders have on momentum there. momentum that Astral, you have you've the matters, well seen excellent look strong products differentiated Orbitrap We the When as really as work, microscopy, at we at incredibly in on where electron innovation just

say highlights see the of muted portfolio, conditions. and are, I where aspects that's the would in you the more more routine-ish So

Operator

JPMorgan. Vatnsdal Rachel from with Our next question is

Rachel Vatnsdal Olson

on to China the of follow comments. Wanted some up

digits, of China us this are this through China walk quarter. you due tranche stimulus? you earlier comp to that heard mid-single mentioned the Can We from grew seeing what there. first partly was You funding just that released

spending comments And holding some first talk at any you'll to be then you getting your benefit of seen the to Do Any there any think seen orders this would that you we've pocket related tranche? program? also, about. back of helpful. this Kind related air customers you from have that like heard stimulus? stimulus So have China peers

Marc Casper

Thanks, for an question. It's question. important Rachel, the

So down get [indiscernible] can. stimulus let then sort as me as and transparency of to start high level at possibly then the the much and I

was weak I economic economically [indiscernible], at all, as was China terms economy programs in how world get stimulus which year what the the was backdrop this macro of wanted thing, of unfolded. right, is think government in surprised sort year a the is early a of sign environment. The tough First good a to the that announced in terms of the

When our I what amount out in with seeing, actually customers help with activity and industry think stimulus we're about for. figuring to them to what tremendous our apply of

so a and our process. from know a we're products perspective, we there's stimulus of in that bit And in interest helping quite our customers

small and When I as likely play have in it in about out, in to XXXX do show the XXXX think of revenue some well. to is expect fourth to largely how up going I that my quarter effect expectation it's

I the of team, time. the did off China actually pocket heading couple a to weeks' ask in and to I'm question about air

forward to So I'm looking that.

air Our team anything like didn't any or that. highlight pocket

kind working associated with at looking government the on it's conditions, customers investments funding. are of muted and additional So the

quarter. So growth I'm team's the in the any proud activity, the in we pauses didn't mid-single-digit see of and

Rachel Vatnsdal Olson

Great. And then here. follow-up as just a

you CRO, an growth. outperformer was out the the this called drove quarter clinical some research On that of

from volatile prints your few a So peers. we've seen

And have emerging through have book-to-bill of PPD? walk quarter model and what quarter we then standpoint you how kind and for through an in can the RFP you that as on well? from us funding turned seen the biotech flowing is So the

Marc Casper

Yes.

well organic revenue really performance, job I very positive in the about despite headwind substantial that vaccines our growth when activity. of business. research our So Rachel, from And delivered nice a executing therapies team has clinical done really in and we a runoff think

job. is nice doing team So a

trends, in clear very sort the of some execution Commercial quarter, did our went of QX, shoot right? very commercial that was we the And when capabilities. us at was the is details underlying from QX be that our aggregate give the would value under in biotech the performance confidence funding we really and improving customers I looked of market activity see strong it across the of some talked a green that in that a about in year would perspective. business And

more QX in our long into you in actually really of that in well it into business, the but does to saw 'XX that And well authorization We the get translate as how in And translates customer this revenue biotech up acceleration know and the bode very for and really 'XX terms authorizations takes trials momentum an in base. that of quarter. going, clinical encouraging that.

Operator

from The Wolfe Doug next with question is Schenkel Research.

Douglas Schenkel

Okay. Marc, going business look most we lines pre-pandemic, positively. like and when continue at trend seems stacks back it X-year calculate Thermo CAGRs within to

that on your think is call morning. consistent I this with the commentary

that in X the improvement from here? With with I pace mind, key that in be to questions. mind, think one the of So questions is, going what's of

also have the recovery the cycles. through occurring about kind you seen I'm are this what for how just First, more thinking And you guided both things expected? you've than is in previous terms where lagging? of on quickly but based may Where of year,

one that's question. So

gradual is, back into to quarters? pacing fair to to be this a range essentially versus into that the And is would making this second that snapback? the take grows market going X% a assumption fair move to basis, that just assume X% the on X% mind to is seeing going keeping it's X% progress the what that range, assume it be it several just in your that is to then here, And recognizing normalized but you're move

Marc Casper

Yes.

that So Doug, good there's question. It's a in a question. lot

market performance let which is investors, are So around important me just start right? and the with the think our to things that I our

market pandemic visible growth, market set amazing about and pre-pandemic aside without never lot volatility really in the the debates growth and or So of sort of of there's a some Pre-XXXX, of period, holding a predictable, early performance pandemic. the great underlying very a even of our right? parts market in the

and directly the a other of related a comparisons year then lot obviously, industry in for XXXX, -- pandemic and factors the So to difficult and indirectly.

seeing a feel always we're we on. what They're X a the what's all irrelevant quarters have going in the Like better, playing I pretty of industry There's the think on also in the the when a a visibility factor aggregate. expected. little good. in things we little for is about out as good margin. row, now for So It's worse,

feel the progression. very good about I So

embedded it in time frame more guidance we've QX. slightly the you when to looked What's and phasing QX little is I going what a But implied, that is the year the full in single probably guidance progression. terms be fourth in our further January was in the in back market, for of bit that growth think and up when the when right, we our is down in of market flattish, low at in about the the maybe And step sort in is the it continues market said we up quarter digits. gave market assumed to

-- implied don't a what's in crystal That's there. have we of but ball, that's sort perfect

it. will And get much progress I better how I we to so When exactly a it's each thereafter, progressing January, well. think feel have going it's quarter for to to when

about forward year, specific to that. X% in X%. frame, it time to the to the about X%, But That believe a what's the how X%, growth market to is X-year mean relevant do a X- really the looking XXX% predict I quarter I think that be or talking X% is going I to when I'm but do confidence I right? to and Day. can Investor feel feel doesn't to great X% And I long-term

just it over in I always phenomenal feel our from in not from It's drivers it's industry, I question pipelines, what's standpoint, don't because underlying drivers, that. fantastic, But So about like terms important. I our underlying but and scientific of customer fact any on going a lose take dramatic sleep a it right? base, And it. are great

And seen feel an market, ability record than important me, thing I to far, looking choosing at what track grow delivered is other the then about. And and have we've faster least great quarter, X% on incredible that. the at this so again once we our And important the other XXX,XXX choices. than that's more to quite actually our to to investors customers their meaningfully important our often colleagues us

hopefully, year do I a the of our puts in is what see pretty you And wraps assumption up think that we'll it as next enthusiasm. my good. accuracy the context we reasonable transparency provide the for forecast to as So year. And

Douglas Schenkel

And ask Marc, more can high-level Okay. one if I follow-up.

of market, with following things others when working been specifically in these periods the played offense has Thermo, you and tougher years in have the you one you've and played -- the in neat defense. have and Over Thermo

cycle tougher has say been difficult years every would normal X.X I even different, maybe the Thermo. Recognizing for and than last is

those feel you initiatives? have but when making in start As a the prior other previous improve and confident you're position more to you gradual, Are do business feeling seen like now we've little maybe things you even it capital more aggressive it's in that evolving a more to moves in to cycles? bit, deployment, get again, comes comfortable, in cycles

Marc Casper

take years, Doug, a for When at and strategy the performing holding trusted about same for ourselves our many, the And results. periods that over long-term I long-term earned we're delivering to thanks love the status partner is where the able question. accountable creates everybody level. company's many excellent while opportunities. It customers not perspective we've with I think

I I super the long. I in innovation. to investments I love is today had so pandemic, were our accelerate that to cool. XX It mean because innovation. the was list it X for of the able minutes on truncate my [indiscernible] talked Well, And probably fact we

very growth And great ability industry to I'm leadership forward. position our competitive that into our to our to differentiate And continue further superior excited job differentiate and do and is going to to translate others the our deliver about organic results.

question, for thanks Doug. So the

Operator

Peterson. Our is Tycho question from next

Unknown Analyst

obviously, vaccine therapy a Marc, the question was it or for and effectively the from roll and off, felt headwinds on at X-year Lab you but operating services, a products maybe Stephen. margins low.

So about lab you margin just how curious think about products going forward? for

or And lower? then still Patheon potentially TPD if XXXX, average, ability bps or can do think drive higher XX above corporate expansion about have could the the to as margin to you be XX we grow and of

Stephen Williamson

question, good to for thanks you hear the and from again. Tycho,

So of translating profile capacity of going fill vaccine-related other the the the the in the in sterile in impact of quarter, largely terms finish through modalities. margin into transition we're and

you the there. that's that see factor probably So biggest

back the comes down. those where margin the ability business to back, where And pull-through And feel expansion businesses, parts good top in profile the drive about for of down I volumes I our come line come -- going think that growth we've margin strong the we as about base that. appropriately from good some as volumes have adjusted the we're to cost and comes get certain

of So margins. margin business, the expand get call. we look to the forward January I to about feel the But giving profile yes, good kind ability of our in and 'XX the mix the of when on details terms to

Unknown Analyst

on Okay. And capacity. then follow-up one CDMO

You finish of over years. the doubled fill couple last

think you up could think the you the in that around capacity how some capacity in utilization of Marc, or M&A U.S? and actively capacity industry you additional the biosecure may about some freed from look potentially get about recent of curious, at how expansion, the Just how

Marc Casper

Yes.

good our when position. we're play, well very of we there. and been Tycho, activity, feel about finish have number our for We've think we sterile that. at doing abilities, demand fill I pharma sites, So and expanding about capacity, demand has our our had services and business I is our lines for largest the strong our where been very which We've strong

feel that I about outlook. good So

where the capabilities In our of of we're which supplies, the I portion other expanding. business position, examples couple a really an is of clinical we unparalleled and really have large highlighted trials,

capacity Effectively, we lines that forecasted sure demand. make with our our up

there. I okay the it's the of And business, overcapacity nothing on parts and other viewpoint. not feel of an our So note really about position then

that's positive. So pretty

reminder, as in and it job. terms 'XX is [indiscernible] good a as And And doing going we're come and It therapies. COVID-related a impacts the certainly to and headwind is normal transfers new a the XXXX, through what we're the lot better our team of right of in place. now, but new on activities becomes tech are in the growth therapies lines complete 'XX the

good pretty ahead. times So

Operator

from with Leerink next is Our Puneet Partners. Souda question

Puneet Souda

your hearing divergence of customers, question some that smaller what Marc, ones to And out versus there, earlier-stage with you seeing are seeing C-suite you, maybe and with can much therapeutics and as these higher-level these and narrow? the divergence within the are have mid-cap How extent, conversations, a you So when groups? you customers? a -- conversation teams when for biopharma maybe from your larger well

Marc Casper

Yes.

Puneet, thanks for So question. the

you So out when is customers, being and jump things lots our me patterns, to I I'm forward a if seeing will, the back great customers and think looking tomorrow, that about of thing. I on to see the the road

One, on larger and seeing are focused their the chain. of customers, a few that pipeline, supply you're resiliency -- In they're products which these will many commercial in companies and both our with their things. be

terms demand, will, So where much they And site meet you have maybe would historically had sure in-house in great seeing their that's pre-pandemic, more our second medicines. making can just customer that they single of if the manufacturing, of leveraging capabilities. you're for site,

also do do productive. basically how fund prioritize the in we help helping the them way. important effective desire You're most for really the seeing more exciting work that And and you be by them all pipeline of just their things innovative the most in and

their of what's So do it's more them about helping in pipeline. impact maximize the really to

do much higher I had lot right? first get the because where the about funding tone the through confidence, gone period challenged, a the around of they period. through right, in how When think X dialogue, was XXXX months smaller about think we I When customers of a was

into expect of But which of Funding indicators types will of really trials is very at as of year the would to new be spot. we the is of funding flow I sort the rest and different that you're new that work into and that available the 'XX. earliest authorizations would And as unfold happening, continues a seeing we but do also get that, the confidence clinical really that, activity. through translate

positive think that's So I a development. very

Puneet Souda

for a And just Stephen. follow-up Great. Okay.

and you -- by On $X.XX. raised the EPS only guide beat, it the was about but $X.XX at the midpoint

of versus what's is the wondering to? you there point cost of your terms would end within specific So how a management? anything is in Or much market just control reflection that that out of

Stephen Williamson

Yes.

kind $X.XX the outlook so for rates of half. that be timing-related. about the of the the QX the beating Puneet, year, I So second offset $X.XX When $X.XX and think could really FX in rest the in of is of

with not That's the year. And timing a we're in from overall assuming then for change tax rate standpoint, that. the the

beat So whole. a that but is neutral net good the in $X.XX year as QX, it's for

It's then point. it's of enables appropriate anything this rest, the at the appropriate strong point I this end second think -- And us really I high $X.XX. the year. just to the that's half think be And with raised wouldn't for better and and the that's low positioned that. read into and I think we at raise else we've end And at just a $X.XX, raised

Operator

Dan question is next from Our Stifel. with Arias

Daniel Arias

think particularly year. academic headed isn't and AH mixed you the robust are here? do Some budget there, where Marc, markets this points data

for second what the curious we and next into expectations then should cycle. So have the half

Marc Casper

growth, in Yes. I We relatively in was QX. government academic comparison. what encouraged by single-digit saw challenging had and I low a

a did good team job. the So

strong around seeing I And through, Thermo for track great excitement innovation, customers money we're mass series. a Scientific know demand I'm the differentiated What seeing I I there's And given the and Astral. that mean are is lot spectrometer on really on consumers if the think products, get getting of record the high-end innovation. for money. our Orbitrap the Stellar

really, These are positive -- are really developments. or series. really These

it good. playing performance single-digit of academic kind think globally, And term always low and that little out that. now. sometimes market, better was so long is with in growth And I it's a than think our government I for line a right --

Daniel Arias

to comments ability if a Okay. customers stimulus need gets follow-up and them? function just primarily a your money discrete order I actually And of there. there just time then as time, to flow to that to things you? happen -- to Do are Or it have to that spent make in to sort triggers as way the specific China see and you of and have on get its demand need on see

Marc Casper

funding to they other their matched have is depending local be process or it central the usually and government sources, mean could I and there's by institution. the apply, funding on a provincial

that through going they're process. So

place the As it go then out order. to the gets they ability have approved, and

view. that's the So

mechanism happen. to I think government or have likely because by not, stimulus understand these think times, institutions the whether all in they are a funded to what's it's I

them. not is giant mystery this to So

kind is and perspective. of from it that through working they're think normal I

them doing the important of the and And we've importance of of launched is relevance what that the we're it. instrumentation reminding

to request funding our their prioritize support they that So instrumentation.

Dan, wrapping for to turn just the and I'll question, thanks up.

strong So our and differentiated call all the for future company. on performance of well an Pleased deliver deliver to brighter positioned our quarter, another continue to value everyone, stakeholders, for we'll we to us create for thanks, even joining today. build as

and We're looking you updating performance in third at forward on to future in talking bright Day that Investor September York upcoming our New on about October. our XX quarter

Fisher of support thank you for your always, Thermo Scientific. As

Operator

you very Thank much. call. This today's concludes

You may now disconnect lines. your

Thermo Fisher Scientific (TMO) 24 Jul 242024 Q2 Earnings call transcript