TMO - Earnings call transcript Q3 2024 | Thermo Fisher Scientific Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Thermo Fisher Scientific 2024 Third Quarter Conference Call. My name is Ezra, and I will be your coordinator today. [Operator Instructions]

I would like to introduce our moderator for the call, Mr. Rafael Tejada, Vice President, Investor Relations. Mr. the begin may you call. Tejada,

Rafael Tejada

thank Good joining for morning, and us. you

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

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

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

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

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

Marc Casper

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

delivered trusted strongly in As performance. our long-term continuing which press you quarter is partner of We're further release, performance of our financial while status, the to our seeing another customers. And position. benefit strengthening in resonating saw short strong differentiated with deliver the competitive we're term our we

let me first, the So recap financials.

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

per operating we Our Adjusted of margin strong adjusted another share. was $X.XX And delivered operating income $X.XX adjusted quarter billion. XX.X%. performance, achieving was EPS

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

the our underlying quarter, performance by conditions we'd improvement In played and and we sequential end growth. out to delivered Turning another third as of quarter market. market expected,

additional you with Let context. some me provide

and in business. biotech. was in sequential vaccines and channel revenue. pharma of with quarter segment. clinical the customer the digits Starting in of single in this the row This market research including We and therapy a low Performance by safety from QX, third X-point headwind in declined led for a our runoff our quarter growth research improvement and marks the

In market microscopy the academic and the electron by growth electron the business our strong and in the single our microscopy in and grew growth strong low highlighted applied, government, during in we research quarter. We and single our we low safety digits In delivered grew quarter, in business. during industrial in channel. digits

care, and for Finally, growth quarter. in diagnostics the was flat health

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

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

of the the conditions the This with is year. framing the as as the quarter at of has year on reflect As I in guidance markets, part modestly beginning each line have underlying progressed. end we the improved provided

Let me strategy. update our turn now to on growth an

with partner great our trusted quarter strategy our of innovation, of customers innovation. high-impact engine. the another reminder, a pillars: our X consists As unparalleled and pillar, was with commercial first status it Starting

the It's of continue we recognition. past true the This see launched our teams. our our innovations industry to that continue of couple gratifying is receive to over testament impact First, to a innovations years.

Adoption Astral mass which years. in as Spectrometer, the Most Dynabeads, products as our Scientific CTS Orbitrap recently, be our and market most Mass which one in which the as advancements X recognizes special revolutionary launched won Gibco science of category spectrometry to gold Orbitrap honored continues of recognition significant the last disruptor R&D in Detachable Astral our of the XX XXX most Awards, strong. the products, in year; incredibly technology well Thermo

During important work. my helping opportunity is customers on our the hear how innovation feedback I've their forward to direct continued our science customer had significant interactions, and move in advance

quarter on which the and microscope, we the workflow. that we point advanced the a of development enable is nature technologies offers new analytical transmission second launched Thermo chemical high-impact innovation number user-friendly electron This advanced of the of researchers of materials, To sophisticated The advanced level. launched. Scientific also scanning a had benefit most integrates the our down we this into deeper seamless Iliad the to materials of products a atomic number insights into

for the at of as spectrometer of well Iliad materials Iliad Copenhagen, our energy our in to unveiled and and Denmark, innovative We imaging determine has the incredibly samples. been incorporates filter European Microscopy accurately proprietary high-resolution recently Conference chemical the detailed feedback The composition positive. as most analysis

Applied a multiple also DNA/RNA helping researchers effect, and novel DNA And Biosystems groundbreaking the to in Invitrogen we for insights of maximizes blood which delivering acids our Solutions, therapeutic method Sciences. way genetic biosciences of Delivery isolation the from Vivofectamine cancer launched Turning innovation samples, Sequential RNA the paving cancer-causing launched new identify with alterations. into Within unique Life kit, we medicines. business, MagMAX for nucleic targets the

context month, building earned on trusted some the at highlight this Investor to status us strategy, like progress you additional that of element our I'd and to heard we've bring our Day, you Last in me our it life. give a on our to growth Let customers. quick partner update bring with

During I to meet customers. of the our had opportunity quarter, with the many

you we their us and As an understand have this customer and helps near- priorities. know, unparalleled long-term access,

Our translated the the capabilities strength as during truly resonating rely with and and on in advance and ability is their which experience their future. scale, our strategy growth gain of accumulated us customers depth the of our with their speaks now This accelerate wins they share and productivity enhance commercial important to innovation, ongoing work. customers into quarter, meaningful to to

and in with officials visited I also China customers. meeting August spent and time government

relationships track of the record and impact our our based long history We there positive on in have strong country.

the seeing Our China. how I positioned firsthand we can well conversations collaborate up to enable economy how visit were are we picks focused capitalize to success. the the in away on from market on when came customers' opportunities our

optimal test myeloMATCH medicine so next-generation be from that's can with me how announced our unique an cancer Institute, example the quarter you National precision the clinical for a quickly advance collaborations. give to trial profiles. more sequencing their third umbrella matched they and going based patients on business, treatments with we leverage our Let our we partnerships now our Cancer sequencing biomarkers partnership specific and next-gen to In technology

our meet manufacturing all and for solid biotech in expand services expanded our Bend, to and dose continue and our Cincinnati, current to pharma customers' enhance our also formulation we customers, pharma future Ohio Oregon. capabilities To capabilities We footprint our needs.

biotech development. pharmaceutical In the Sweden, and we a of which our global laboratory announced to with support Gothenburg, our business, services in clinical will new of advanced support services research customers phases lab expansion network laboratory all bioanalytical with

was of So an advancing our it excellent growth strategy. quarter

quick Let examples and System from I me there is are many in impact on that could give PPI share in our embedded Business you quarter. update the of PPI a the our culture, QX.

empowers the As mission-driven always, day engages system execution. a our colleagues all our enable PPI find every during to success business better and of way enabled our PPI to outstanding quarter. culture and our

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

Europe, Asia network, further further while meet in supply manufacturing to across streamlined During instruments the analytical in quarter, optimizing our we for chain and by our high-end strong enhanced Pacific processes our automated we inventory demand.

turn social me to responsibility. corporate let Now

a advantage. CSR competitive that We delivers have strategy

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

a and being positive communities, the support environment good of also a impact create by create We we planet. our we how for our colleagues, steward our

world. none Today, want because I of the just to amazing is moment spend work our of our our on without around team the possible colleagues, a success

of the In assistance always see lab have is safe. our priority, X,XXX are safety our Helene there impacted. Carolina, was customer Asheville, colleague have teams support center. I'm our those colleagues North to extended hit so thankful have equipment and each as manufacture who concerning the colleagues in we and to how of comes our impact hardest me grateful especially top Asheville, for support a Our about areas. also truly we It's provided one the heartwarming to other. to of together service colleagues team I'm Hurricane

capital deployment. now to Turning

execute strategic We combination capital deployment capital of through create our successfully to to do continue shareholders. this disciplined to We value. strategy our tremendous M&A a returning and

our on recent update me Let acquisitions. you

used ownership, these product business, the been for aid in enabling Site, Union protein the the continues such myeloma even neurological our as our kappa achieved in to IVDR Optilite, example now, extension This Freelite approach, to diagnostics business exceptionally M&A an for quarter, diagnosis Binding allows diseases, under Until well. stakeholders. of Mx be we our diagnostics our is now in extension and to European for now The The great excellent multiple an multiple all monitoring. perform have the of In claim solely kit. kits sclerosis. better value creating a

The future. beginning reminder, As is a smoothly. well at OLink the closed progressing integration acquisition the positioned a is for bright of of quarter. business The the we

in you by playing we're proteomics we're Investor As research. at our the advancing heard Day, role excited

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

our to Let turn me now guidance.

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

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

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

Our company. for raised adjusted and through once EPS we're And of for growth the as an been all performance gone for value differentiated continue our stakeholders deliver to even in positioned we've brighter future as create year. XXXX, we our and well guidance again we to has build steadily increasing our have XXXX,

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

Stephen Williamson

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

I Before the performance, our midpoint we with what get view guide. into provide of played out in details high-level let third quarter me how of versus financial the prior assumed the QX had our for a of you

growth organic revenue guide. consecutive the in in On midpoint what the Revenue organic of growth the for with increased assumed core top both sequentially line for prior QX revenue largely line, and was third we quarter. our

bottom of strong net offset for the partially of $X.XX ahead EPS $X.XX of free and flow We're flow operational last line. the the the same being are favorable free also what a favorable lower is higher These to than net more of QX. well cash of by That on an quarter. for to headwind executing assumption XX% generation guide period cash cash assumed Turning the year. cost we'd $X.XX additional impact $X.XX rates Year-to-date generation. timing in was was of flow due was performance, prior interest Adjusted following: the FX than assumed. versus

another quarter deliver had differentiated well XXXX. performance in positioned are we and So to financial strong

additional with per in me on was in Let $X.XX, the earnings with EPS quarter And adjusted GAAP now some $X.XX. Beginning the details QX. provide share. EPS you quarter, was

million. $XXX organic from flat headwind core year-over-year quarter, On organic pandemic-related represents on was In was vaccines revenue revenue were revenue and organic all X% a line, basis. a the revenue, QX This revenue top This largely and growth. therapies. to reported approximately the

Europe, Turning performance were revenue With Asia China respect And digits. Asia within to to by Pacific our America North our flat In Pacific operational geography. year-over-year. QX, declined all and organic our low of billion income operating XX.X%, operating last in lower the points quarter quarter. QX adjusted slightly expectations margin was $X.XX delivered year, basis we than of XXX ahead for and the performance, adjusted single

on strong cost adjusted gross productivity, partially strategic we In our our margin quarter. focus mix reflecting industry points leadership XX to and Total unfavorable offset the to deliver in lower fund quarter in continued management. advance at impact of the company QX than last basis expected this came to the us continued XX.X%, This quarter, year. enabled further investments

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

results at line. Looking our the below

$XX million than balances to investments. Our QX lower was cash QX which net higher interest is expense and XXXX due $XX million, short-term

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

expenditures. from $X.X $X.X Year-to-date Turning cash to billion free free and cash million net after the $XXX capital flow operations was flow and investing balance cash sheet. was flow Year-to-date billion. free of

OLink. of with billion of investments ended deployed During total $X.X cash And of debt. billion the $XX.X quarter, $X.X we and in acquisition capital short-term through quarter the the and we billion

ratio of a ROIC leverage X.Xx on across In my debt end that the XX.X% adjusted strong at comments was the company X.Xx quarter investment was concluding debt reflecting total net generating and we're company. the the EBITDA basis. Our performance, adjusted returns on to our on

Solutions. prior performance segment was pandemic. provide this our Solutions X% with this quarter. and quarter. impact starting than points for our some of Sciences operating business basis in in income segments, lower I'll on driven was Growth year of adjusted X%, XX.X%, was reported by X% versus down Sciences revenue organic the X the color year revenue Life prior the operating and declined Now adjusted segment XX the margin decreased Life QX QX

OLink invest. was and mix, delivered During which productivity, the QX, acquisition unfavorable retention strong by offset we more than related strategic volume costs to

Instruments reported quarter. both revenue year Analytical revenue the In grew the and organic prior versus segment, X%

X% microscopy In the adjusted adjusted continue business. margin QX very quarter, operating operating strong we and XX.X%, strong year-over-year. delivered unfavorable points this segment, our offset which to decreased and XXX in basis investments. mix electron was deliver was than more We growth productivity, In income lower by strategic

Diagnostics growth channel lower QX Specialty transplant operating market and we margin our quarter. and XXXX. in XX for care reported our Specialty segment the organic delivered both grew Diagnostics to increased XX.X%, In basis led revenue, year and operating points our businesses. versus diagnostics Turning by income was adjusted QX, QX, revenue health X% prior QX and adjusted strong than X% immunodiagnostics

productivity, prior which more flat and the income businesses. market in underlying led this was productivity, the year During the and research which we a segment Laboratory impact by quarter. had in more by by segment versus was growth offset adjusted and segment, growth in therapies QX QX in the investments. And investments. and XXX quarter, mix finally, than we Organic and Products the quarter, offset very delivered and growth Services runoff than by expected, this clinical good in mid-single-digit our The research was expected channel. reported Biopharma good is vaccines and revenue lower this strategic delivered strategic basis both revenue were organic margin is revenue operating safety on Pharma QX, was and In Services XXXX. offset our unfavorable than XX.X%, operating declined which points as strong And adjusted XX% of

guidance. to now Turning

be is to As $XX.XX full at adjusted outlined midpoint. our a EPS XXXX $XX.XX, We in we're adjusted to guidance. our in EPS now expect QX, increase of Marc range year strong the performance raising which the $X.XX

to billion, be the as done banked billion in in for X% minus QX. and positive the at Revenue of core of organic to midpoint, QX additional guidance half cushion continue in past maintain we've quarters, the As the revenue and continues be assume to X% the will X beat we remainder to range range for $XX.X growth that the XXXX. $XX.X of we

single continue digits to see year. that also We the low declines market this

Our PPI proven take execution enabling and us strategy Business once again growth is to share. System

XX.X%. margin be for XX.X% between year. in And the million cost XXXX updated guidance net adjusted million $XXX an operating to assume Our income of to and expect range now we continues interest $XXX to the

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

you unchanged the guide that be to of would of the underlying remind from it So assumptions key remain previous the some helpful guidance. behind

$XXX therapies and assuming to testing XXXX, of under and of $XXX $X.X In of related a revenue. revenue. $XXX just revenue or million total, million we're headwind $X.X of vaccines represents this to billion between million In X% billion year-over-year

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

terms In we count to OLink. $XXX million share in this capital to buybacks, year share QX, deployment, January. to which And through shares. XXX is we're We be dividends. billion $X billion in approximately of were acquire completed $X.X average of already deployed million assuming capital year of returned assumed shareholders Full diluted

each And our and of guidance, which outlook of the of in benefit has vaccines year. about the to X% outcome view QX revenue from in the a should the the a is $X.XX. organic fourth unchanged likely from adjusted quarter range headwind days. midpoint And growth our of X.X% approximately EPS X.X%. for as throughout revenue consider QX reflect you continuation organic previous and extra most year, current the a therapies growth the midpoint you is that would equates we sequential which quarter, year. X revenue increase reminder, delivered approximately selling that and for guidance the growth is Implied the of the billion That and $XX.X finally, as think as for of of

call well differentiated XXXX. we for that, So performance stakeholders to With the to of all over our to and in deliver had I'll quarter, Raf. turn conclude, back another we're positioned strong

Rafael Tejada

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

Operator

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

Michael Ryskin

you. Great. off kick things Marc, maybe with

slight a looks No about change. changes, function talked gone XQ the to number a as step into view this year. is continues year on, has gradual just times conditions we be of and very step-up You It a and major sequential the as prepared that recovery, no like the through remarks will improvement during the XXXX. market it very think go to continue some in I

could Do think quarters the put what's you little be some continue at next a way, into Or X a faster do inflection X expect the quarter of from accelerate things recovery to and I back of to market there an into where that bit? XXXX? pace next point over sort another you holding the snapback? guess,

Marc Casper

Yes, Mike, thanks for question. the

So is maybe I'll then what overall, comments do framing question get I thought XXXX well. put to your as actually I'd some

in So for year, progressed, about as we improving the as it Q&A here in expected and And I was happen. session which we line with first, quarter, third good what year today, market our have the modestly is through October to the progress been think been they've and how the conditions has as expectations, sit we a quarter. the

that's good out that it's way. So playing that

for from headwind offset to growth the runoff able a were X-point In revenues. was QX, flat. We organic us, of COVID-XX-related

we're So And our really year quarter it return organically, growth excited quite we're thing. the growth is the of which that expecting has puts by to I'm progressed. quarter, has Each improved in organic it good a how context the to fourth fact performing. as

our we're proven growth strategy. Operationally, executing

this increase us each in and That's guidance management. EPS performance. terms all make our financial allow a strong able of have to quarter nonevent of of to We been adjusted kind

today. So the all is discussion of the of framing that kind for

is, have our the how did to together is time as for the to the At So sort it we to of we're execute January. into thinking latest conditions and we the which the going year. -- QX macro think kind I same XXXX, do provide it the XXXX, is as is to going what we're best in the then about I'll of that when thing just of how guidance we're And ahead in our you give year against on our best call, it. point, approach ultimately I finished first view boil market and of XXXX from and the perspective, all year, think kind and about the going

in organically. in my are excited going I'm From the I perspective, end as excited modestly year. personally, to return think XXXX, about own for to And that We're improving we're the fourth the markets throughout October, quarter, it growth right?

it's final in the say what while I us, less it's still be of the in a runoff activity, the XXXX, pandemic-related it than would XXXX. that and be if to to going headwind that is was of For will year grow,

performing, I And think well. executing company, And a we're then as always how right? about we're

driving share gain. is strategy growth Our

Our PPI enables Business execution. System outstanding

a to disciplined differentiated XXXX. have our strategy And generates to deliver be capital performing well. once We deployment going again positioned we're returns, that are well acquisitions performance in

that we environment view So in updating as have look January we to of the the forward on best is. what you

Michael Ryskin

All a right. guess pharma and I for I follow-up, appreciate that. we'll into little customer group. dig wanted my maybe Okay. to a as biotech

You low obviously, from headwind there's a and runoff single-digit talked as well. about the there a COVID-XX decline,

to segment any point on Pharma is on a how biotech, love of that would or get some can additional businesses give biosciences versus Services larger pharma between in or that. investors, reagent it's smaller clinical for the But color business? been business some between trial and and the focus the that's whether Just you performing, whether color

Marc Casper

So your each of call all of biotech. of on to the within you're going shot a peers at mail get it. pharma from a sort this questions take I'll fan and high-level asking lot

third the mid-single-digit about you're And things performance, right, obviously the how when headwind sequential So underlying is and quarter good. had about from a first pandemic I the improvement, when think think seeing runoff. which progressed, we I

the expectations meaningfully confidence better biotech as the surprising. and the nothing here, growth, below So XXXX. it been in improving conditions modestly in are, Funding we it's definitely is industry the they're as has that's was muted points in market right? because than improve. In biotech improving. long-term data the so year for So sit progresses, of Where the that you're to seeing positives the aggregate, obviously, somewhat continue they're sort

amongst the IRA, have customer and different and see And positioned clearly a relative way, base differentiated we're to when pharma, well to a to we're are obviously it's but muted been pipelines the their growth normal think in the more performance with how adjusting delivering doing extraordinarily you think this well, I I distribution of environment, in adjusting some about customers kind others that others. companies, And large performing. incredibly

So the trusted proposition, resonate. status, partner our these unique things value

So about we long-term of and and how good health performing pharma Thanks, this feel Mike. the biotech year. we're

Operator

Vatnsdal Our with next from question is JPMorgan. Rachel

Rachel Vatnsdal Olson

Great.

First maybe biotech? about up on how following large customers up versus types X at indexed within this here. PPD? CRO, the on trends biotech, the there And an some differences customer PPD quarter see is update versus of did your specifically you PPD in you across pharma us much really Can looking give to on pharma comments any but of

a the CRO And that create like. outlooks what some some in have then on peers started follow-up, sector noise looks as to your of recovery and XXXX their around

for how or more less, business call it, if you year and for at of the thinking PPD, is pace mid-single-digit a recovery PPD X% XXXX? into this So PPD are let's normal Thermo, for about

Marc Casper

it's so the for about and quarter from growth research clinical I and think delivered good vaccines Rachel, business CRO-related headwind obviously about feel our therapies, of When perspective, I about So has I When think well. in the that activity, the a runoff the doing. from how thanks business, we're meaningful question. performing actually,

talking clinical value terms how Services our time and we're of in customers our combination some unlocking Next on performance. magic our for the business, research that really and quarter, Pharma really that about adds spend going the differentiated to between I'm

that time, one. our been announced really quite doing So I we just that We focus quite been customers. and We've this want spectacular. to for talk to on some how about it's

customer in momentum I important. slightly very research are both more is broadly larger quite of our about of customer terms do business, serving with the than within serving but mix position sets we position, When biotech think we the we're our pharma the base the and a have well. good, executing So -- clinical

organizationally, biotech all, the highlights, that one. about the them, of everything think it's adopt together quickly I pulling of when set customers And leverage easier as just capabilities some for unified because more to

momentum, that particularly in seeing biotech authorizations moving you're So right is in direction. and the

see how that's we it. So

the term, 'XX give unit know, the 'XX -- you and of terms down what's going to performance our and long going slowly views these takes than within we we'll the on when get we're But of what's don't business things, guide year. the the In what's faster And as at the we guidance growing average growing company. give next all and X%, and to don't next puts more of average year. we the to

Rachel Vatnsdal Olson

on second just Solutions. Life Understood. question, Science And then around my

than growth Street for segment. your was So few XQ. We've solid a heard softer trends the that a towards of little what looking quarter was this in for peers from that bioprocessing pointed

if anything, below there? unpack How sciences us quarter? Life what, performance you fall can So for the trend in your expectations that the genetic within Sciences and And biosciences Solutions segment? did versus bioproduction

Marc Casper

actually, in Yes, question, the for quarter. our of analyst the with what for the for Rachel, in different than seems modeled to because thank question, been performed the line are have But expectations you business the and actually, thanks framing numbers the the models.

what something about largest in came think in little so the I COVID-related us, this was quarters. the segment. happened the third expectations to quarter, explains we of probably the impact activities difference. COVID the comparison for line when most difficult that QX other relative of -- had something our our That's bit modeling in with quarter, it roll-off So that's in we the why knew, in the a

going going less a both progress orders, of good. ultimately growth, the we terms be in to companies of momentum nice sequentially that is out played are certainly stocks just expected. how is most of as there interest in Revenue performing, be are strong in of right future forward and because sequentially terms that see quarter have and headwind the continues to out that one to bioproduction, In the that and the is there. a bioproduction business our that's a in Actually, terms companies in gets bioproduction number obviously It direction the was of going year-over-year. to tailwind not-distant

it's The on only about. would our but You an enormous the segment, announcements business see doing other sequencing I really business, LSS make well, clinical talked I right? commentary is not the

Cancer One them with Institute. of the National

lives announcement You quarter of terms using for the an positives are treatment. the sequencing a saw approved on difference in really our customers These from our huge end, make of applying of one cancer. terms course of brain after customers our patient technology companion to in diagnostic and

is quite that doing business So well.

Operator

question Research. Meehan Jack with Nephron next Our from is

Jack Meehan

about quarter can the you question Maybe a growth for to I just Marc, ask organic played about core dynamics, but month-by-month talk flat. out? was is The bit how ask I little more reason hate a

the X%, that. for missed always was I Street think assumed conservatism embedded. there's some so I technically looking

was September curious, short would about kind you for like the hurricane, did know I If talked any just I of be color out so, how fall reason? played So quarter the why? on just but great. some

Marc Casper

Yes.

So line Jack, in in we expected the largely was with terms of the to growth, what happen quarter. it for

versus And about very say. give can So again this models, expectations and accuracy on the the the as always what from as to we next and think external I clear clear a views what Street perspective the I year our some there's about these one. quarter we for between Stephen quarter. the gave try upcoming that calls think We degree of are

of kind our as thought. from perspective, So we played out

as quarter, would quarter. of big billion-plus terms jump as million, quarter, like during say, quite In out but of quarter, the month and $XX normally in our the of a of But company, terms out the at any not academic largely a I you government in that's the -- scale played very end like million. expected, didn't we $XX so any number, the of I strong with the would very, patterns how the $XX.X really through significance It's see. wasn't pacing as

Jack Meehan

it. Got

business? then it? you for And consideration Okay. guidance, have $XXX you're there real what the end. Stephen, from a I million midpoint in of to on here, Like still range top us variability the narrowing level to know was was the the putting but any bottom

Stephen Williamson

Yes, Jack.

likely other largest the kind the QX of of now. focus we see spend to you where the the So midpoint. And view the factor I for macro as for customers. last likely overthink than it, we it the you just around. the year-end most by right simplicity, And be swing is from kept current as That's outcome to events, guidance for in quarter on said, our our we level not time encourage range

Operator

is question Research. Schenkel with Wolfe from next Our Douglas

Douglas Schenkel

Marc books, always target. right. on into yes, and well, X Stephen, takes tracking here in there year That what's does said, the we sit financials as original the the the working -- months All with X XX to than or of better are puts be months seem plan. months worse and portfolio

tracking you what you here to however would customer we ahead looking about the just to the Or want groups, of quarters, think of targeting expectation? ask are expect next year? some beginning back, the today, back we're rates And but As below frame not to product look what it, kind ahead just you things seemingly to categories, about exit sit of were few what's changes expectation? as are at as you XXXX. geographies, normalize there more things how to coming to I thinking durable also What's together?

Marc Casper

the thanks Doug, So for question.

January precision and months. set those an of say played with degree a the we first through had incredible X the back we expectations and go to we year, -- of out so expectations really far have if So for

tight First we to growth. next quarters quarter looking what expected, quarter was revenue return higher. we bit the forward we're and a around where on to fourth The X little were super

differently And we there's like or thought worse. it performing with than what terms to what in added And actually was I'll when not not -- things. back But lot the better we of January, meaningfully that different so there than you is a unpack of also couple expected. something different in businesses, them a come

for talk is happen The right what about, progressing right? And year X in direction. the would in biotech this we could improving, change terms range about in things did is would what confidence of biotech funding Funding improving. and how is the perform was China,

As that you know, ultimately there's industry. a and how lag our flows between funding into

to we certainly previous that in the what relative saw encouraging dimension. in couple years So that's of

going of that bit about you market So conditions a forward. kind helps think little

government And loan that The stimulus interesting, in XXXX that economic terms activity. first, largely industry X affect the way, program environment. for expect not and equipment impact positive different in The of has second stimulus in right, institutions. that's programs, their incredibly and which they a progressed, terms is was around a we China. the actually our muted the their or beyond. It's types did China of announce of have customers been

So long that's business the announced there. term encouraging. And programs actually for more they stimulus confidence and helpful confidence that also would actually recently, to economic spur and consumer be growth

right, to been impact have of hasn't come, in but is the it one because it the on terms the -- economy, the words seen. more said, that yet So hasn't

swing will how that on that factor a going plays be forward out. So

Probably -- a high-end I And turns analytical really just is for to adoption customers and year, our thing in it surprise. getting technologies out declining of -- just nothing businesses. within it insurance, business how our a our is technologies. awesome is would environment see is new and industry amazing It's it's That great it's right? then right? obviously, only the really call adoption The that's the of total, that this

And it during reinvestment of technology great led and were differential of we performance in because driving R&D, response, in has really was one said things when that of we just reinvested we terms pandemic how really has the been our to cool the adopted. growth our

rest better And that we but we little across what are that offsets a the the expected. call So massively Is and than what No, I'd that than to immaterial January? to in great the see, different of expected bit it's out. company. it's

Douglas Schenkel

probably is Stephen but chime always follow-up to my question, welcome think either in. you a I obviously, of as

from year, have X%, year. your model, reminded XXXX again this growth our about at by XXXX, been flat core will year look X%, that I and down to about As about I'm

where for So you've X maintained revenue growth margin been operating has at meet a levels year. you challenging, similar a in actually this guidance assuming row, period in years

but there gets through the growth expansion be year, outsized next LRP wondering of I'm strong operating fair guess as before into does. and I improvement just if back to improve incremental margin could margin range discipline benefit revenue margin essentially it to starts surely that assume is into generation, the slowly So a challenging period?

Stephen Williamson

Yes.

for So thanks the question.

financials. up frame long-term how about think to just So the we

long growth, to expansion. of X% XX points to basis which us, XX line for top term, So X% enables

term, aspects kind that cost of a that's we volumes how business past I think where volumes of in addressed have incremental slightly from return and been those that think base, benefit more And the some get appropriately come there's I've in you can about challenged and to businesses. the the then to that we've could So said future. the higher? the certain it near be down

aspect we could the higher. as of to this we'll in how what's top think expansion, get a line appropriately of we in slightly there's and the give an of And that be kind appropriate making and margin always for is year January, and about between think sure get investing level good then what an which then growth next we into forward. of get the our profitability business So going trade-off the we as about guidance up level world, frame shareholders

call. of kind Doug. and Thanks, forward to frames that details So the to next getting look up, the on it

Operator

from Tycho question Jefferies. Peterson with is next Our

Tycho Peterson

of touch just a LPS. can you on drivers if wondering Marc, the in more some bit little

about heard Fisher. the You channel. we've gains more for channel, the and market the safety But talked obviously, share about, curious,

dynamic. didn't you can that. So your specifically wondering I'm and on I'm Patheon within you if were comment just they PPD of up And actually out on then kind the call curious in that if comments quarter.

Marc Casper

Stephen? You want to start,

Stephen Williamson

Tycho. Yes,

think in dynamic I pandemic offset headwinds. the talk Pharma and the Services where about about So did remarks, in you both research, significant the my clinical underlying prepared growth that when

in So color... organic But I of growth kind think that's growth is a net terms Marc, strong. there, from of underlying when about an neutral. what standpoint, the it's

Marc Casper

really well. the and really nice No, nice growth delivering actually and safety some bodes well customers, and research the channel is care which for well. market do both doing the They're health Actually, channel channel future. the winning market continue to

part of during commentary in that customer number a quarter and the and at clearly around in it is So had up ahead, show large the doesn't really about, some but ones all things a are win quarters that positive. you them, nice the comments those coming wins those over of But quarter, remarks, in the which quite in channel my businesses. really wins talked I really our revenue

Tycho Peterson

and the Okay. are And work? the CDMO around then had to you getting therapy this runoff. lab products you're follow-up you more, to just potentially take environment, to willing services, grab you and guess as the and margins there in obviously, anything I CRO a Or on try Is price ability the vaccine comment for more? more

how comes thinking Novo as are WuXi saw uptick, Obviously, that to Catalent expansion you about from how one both Europe. offload Novo you're we I'm facilities interesting but for be curious capacity thinking Catalent, then And market, about of just also in more Patheon? might you. the capacity and also how for

Marc Casper

to talk price You about in want aggregate...

Stephen Williamson

just price of over the price company, Yes, the in aggregate for we're for X% quarter.

the across whole the of see similar year. quarters still kind X% trend So kind we've a net to ahead run the of so the rate we seen to X what first company, of price basis as that on for normal that's the a It's of consistent. X.X% been

Marc Casper

each industry. back Yes, It's environment up normal. good I'd a Price is modestly year. to say probably the goes pricing

dynamic to more normal price we're is and than what the usual, certainly went the back where kind You have dynamic. inflation up of

everyone will, the sterile capacity in capacity investments as Pharma expanded knows, finish In of XXXX a course are support if business have lines terms of and of customer during and coming our expansions, number that our Services we've you XXXX fill to demand. online,

positive. that's So a

and in training fill the that we on because utilization facilities. you'll see put does to get in as kind capacity the sterile dynamic support so the margins But the in certainly, strong costs XXXX, levels higher of That pressure process on term, for and finish, short of the there. through getting qualification that's growth there's the

do my As capacity in equation. I some meet remarks, offering drug the good the in side our specific of to of in did because Bend, solid development of the interest customer Oregon is announced part oral which our which biggest Ohio we the of not demand, expansions Cincinnati, capabilities is dose, on products, in and

So that's dynamic there. the

Operator

next Our from question is Goldman Sykes with Sachs. Matt

Matthew Sykes

that. Analytical of Instrument I microscopy have a you've what environment. has in and consistent segment, drivers been call, big growth I pretty know shown Astral that been, challenging would

some those and out look maybe side in move well replacement of of you categories looks to instrument from them your be at that X those could kind customers? categories, what as talk we instruments like kicking any rest sense on great. just biopharma would instrument you other as as Just those And any about do for strip you of the the cycle 'XX? from thoughts If in demand

Marc Casper

Matt, Yes, question. for thanks the

think we as when really expected. organic So I Instruments, quarter the had out Obviously, growth we X% Analytical playing innovation about in matters.

that been products we've able been us, of a adopted. to number have launch For

electron early quarter, Astral on about Actually in the talk we has to interest to very continue launched well done bodes high you noted. strong. Iliad that particular well which as quarter, Obviously, is momentum end, Stellar, last the this microscopy. we drive in quite

strong are So going very which incredibly technology, is a more those midrange important things well. that category of in demand. chromatography, of ion Innuvion, an chromatography, particular

innovation our So been well adopted. has

about talk big for equipment is conditions, conditions, of driver expect of large is, businesses digits, is down for are. you things, equipment industry, Nothing most those year out the demand. a aspects muted single take you China, of have the which all routine is capital they the obviously, company, that, whole muted And When the the right? instruments, low And you to instrument portion capital a of that obviously, in surprising. would whole challenged. just kind in full actually market to pretty When say of we market have for

customer, think And replacement we see where those in trajectory. pattern are particular I and any jumped to cycle product for any didn't really in indicate it all by things, exactly change So we varies that. by the out type of that

Matthew Sykes

just Stephen, for Got a then, it. question modeling And you.

in on the QX? Was points up leverage. gross guide. a there's mix return growth margin top QX I basis driving guides or for implied the to looks some XXX operating understand some expectation -- be like over to aware saving line, full there should to the that anything we the year margin step Just margins that on cost get probably that of step-up

Stephen Williamson

Yes.

So revenue points kind step revenue for increase a with really It's to margin the about guide that's in of basis in the QX, XX think for and the I up profile. when midpoint the of the and year-over-year of that the kind of quarter, the line our is seasonality level profile. the

chronologically it you when sense sequentially terms it at of So in the change. look makes

Rafael Tejada

Thanks, take more question. Matt. we will one Operator,

Operator

is Dan with Cowen. Brennan Our next TD question from

Daniel Brennan

mixed, kind analysis looked Great. like Headlines trends. Maybe, -- look like for at Marc, And actually up been of just just we pretty nearly global of on X%; but good pharma, and a pharma global have they up R&D. large R&D that pharma, mid-Xs.

changed? of that has just So of terms not you're time? inflation? seeing Maybe be better is with R&D, anything service, anything kind appears just like there different you're more going what maybe amount and see in the of we're growth I'm kind to growth revenues, the guide square weaker is the not dollars wondering, like basing would this end to business your trying translating a decent into market circle from to of dollars on level why Or your R&D traditional kind of that of

Stephen Williamson

Yes.

element on customers AI. piece is medical generative that where Unfortunately, but our to significant technology, significant spending there's factor by need a to not investment AI think when I I you in instruments, and they're about in... that, think what one on

Marc Casper

Yes.

largely We derive in clinical the side all from can like call research and and R&D of on biotech, about pandemic things pharma think runoff activity. understand the right, it and headwinds covers you industry there's of Pharma when production, is the spectrum you specific an have the that bioproduction, on is full one that So in largely we the across And bioproduction Dan, not of out the the So Services probably the the side. within that's numbers. right?

little growth total a industry. of for what's that's the our muting bit in So

a I've of on, going Alzheimer's, just the people about and excitement In that pipelines which opportunities. tone, the And you've GLP-Xs is the the getting interesting fantastic. some But that approvals really neurological there's of high-impact of pipeline, with the scale the and fact dialogue super what's terms had excited people of are is whether that there's really sort a in it other seen lot work of it's customers just excited. about and diseases interesting on medicine

have R&D future. is the for translate to for I believe going you're industry. that's reflects our And so so about investment the prospects long-term that it good, into the space, And quoting our we're that customers which confident data the looking why optimism is about so ultimately,

Daniel Brennan

China. seeing year. Great. discussed And instrument one then A ahead they're have the just follow-up spending few in peers pause next on of a maybe that stimulus

do the And a a through, I to guys modest? like spot. it question demand as think is going color you think 'XX? stimulus China this will for comes weaker like more in lift be you Any a be you kind mentioned in prior is Or of how meaningful instrument there?

Marc Casper

thanks. Dan,

around and a and customers So about applying when when activity stimulus, government process. through think with for I meeting that as been has certainly, certainly was the China funding, officials right, think really, about with had discussion and well, I I going I

So there's activity. bit quite a of that

optimism about more about ask and don't traded tapping investments. thinking I sure to So are interested they of I how much was else I'm available but that, new be Like something and I are they way. the it, not that the it know. enthusiasm funds it, the off, for how mentioned might the have. question upcoming seems None but there customers that specifically didn't into and

that's maybe XXXX I activity, but China. stimulus about -- So what's in a so not in how be on that a going will I little QX, think bit think all probably significant,

but scale relationships from obviously, have and I that. are China strong to participant XX with past with mean knew the years from I earned response country. away their with well to crises in out we as for we deep we the and relationships various help our supporting thing the came in incredibly local there, customers, other going a in benefit the just I country that the government. positioned The in, very Being player trip pandemic, good a it society

well can be our have our and we through great can help them, collaborate positioned customers, technology with and how discussions to dialogue where the And help we healthier have we're about we population customer Chinese business.

capitalize as that. So well I to the we're there, improves economy think on going be positioned to

for you the today. thank So questions

us, behind as positioned for another always, build of quick create Thermo brighter a your and very value to to continue we fourth Let everyone. our good an me thank company. XXXX you on comment. and deliver full well have quarter as our performance January for And stakeholders to our forward all you make to differentiated even just updating year of and we're strong future our for quarter look into Thanks, It's performance closing in We support Fisher Scientific. call.

Operator

Thank call. everyone, much, joining you today's for very

You may now disconnect your lines.

Thermo Fisher Scientific (TMO) 23 Oct 242024 Q3 Earnings call transcript