TMO - Earnings call transcript Q4 2024 | Thermo Fisher Scientific Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Thermo Fisher Scientific 2024 Fourth 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 call Officer; our Senior Financial with the Marc and and Officer. me Williamson, Executive On Chief today Casper, Chief and Chairman, Stephen President President

full the note fourth until will archived XXXX and Investors A February year our thermofisher.com, XX, on webcast News, quarter heading of of be under section XXXX. Financials. this the website available call press Investors Events is Please our in being of website, section live and under release is of the heading and the earnings copy Presentations the our

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

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

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

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

Marc Casper

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

release, As excellent growth. XXXX we delivered you earnings with our in revenue strong to and saw finish press an

the and quarter our results continue commercial of strength execution. operational to Our highlight fourth

the reflect on team very enable and year, our I'm status I customers. As with success customers. performance This as gains for resulted market of meaningful of full continue our in proud strengthening our the to share trusted our our partner they

well future. We positioned are the for incredibly

me the more I'll quarter. recap get in the later into with financials. remarks, Starting detail let first, but my

$XX.X revenue grew in year-over-year QX X% to Our billion.

Our adjusted strong operating And income share $X.XX the grew adjusted XX EPS basis EPS points XX.X%. performance, delivered billion. adjusted quarter. We $X.XX our by margins adjusted in growing to X% X% to to expanded per operating we

in full year EPS of billion adjusted $XX.X terms per Then our our Adjusted in revenue $XX.XX was operating $X.XX results, XXXX. income was was and billion, share.

the Turning quarter, we continued to as end-market. out market played conditions performance improve. to by our and underlying In expected fourth

all of was resulted of we revenue our expectations, and positive execution team's Our across revenue markets. excellent delivered that growth ahead in end performance our

Let in bioproduction market by quarter our me the the and improvement channel, a customer for in Starting and row businesses. pharma additional sequential digits in with biotech, Performance this mid-single services context. led was pharma grew marks quarter QX. provide the some safety This research fourth in with of you segment. we and

therapy declined year, of related single vaccine included biotech in full and the pharma digits, mid-single-digit and the For which from revenue. headwind a low runoff the

growth quarter, year. safety research in and delivered our government, single and we the academic during and quarter in and strong in single and the market we full In for in digits In digits low mass grew the channel. chromatography high the spectrometry the

quarter and by digits our strong electromicroscopy the grew we and and applied, Growth for the digits was full research year. the in our high low market and business in in safety highlighted industrial single In performance the in during quarter single channel.

during and quarter year. for low full digits Finally, in the the declined care, and grew diagnostics health in single low the we single-digits

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

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

gain. growth our delivered we Thanks excellent across end strategy drive of markets, meaningful to execution, our team's continuing all strong finish share proven and a to our

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

year, for with the even the we As resonates our future. have customers. our our you And really to strengthened growth continuously throughout company be know, strategy relevant more

Let highlights. you some me give

innovation. Stellar Starting Scientific In see significant chromatography launched and our science. across complements first award-winning biomarker mass high-impact Astral with the of to important our products businesses launched advancing industry clinical another spectrometer, by Thermo XXXX customers we their the enabling Throughout validating mass Orbitrap year really outstanding Scientific the had by to by to this of our work. highlighted candidates these terrific our leadership spectrometers X it that XXXX, advance was interest mass It's on in launch having pillar, year, strengthen our great been which Thermo impact we advance of research. are spectrometry

chromatography Dionex identify industrial our more which also and Inuvion environmental We Scientific contaminants in customers system, streamlines efficiently. launched helping applied Thermo settings, the testing ion

a Thermo number Scientific In user-friendly workflow the a we enable advanced of Iliad development materials. into advanced technologies the to of scanning launched transmission electron microscope, seamless integrates and analytical electromicroscopy, which

DNA from In cancer-causing we unique alterations. insights our launched identify into samples, isolation cancer RNA sequential Applied researchers Biosystems helping biosciences genetic DNA, which kit, the business, blood RNA of the MagMAX maximizes and

the for we fuel with than Developed materials, lower film material first-of-its-kind innovative bioproduction, carbon single-use launched plant-based technologies. for rather fossil provides in the bio-based biologics. our of And film production this solutions

to In streamline designed food, research great Trace platform ICP-MS, this Thermo we an momentum Elemental mass environmental, plasma mass and continued laboratories. iCAP and analysis Scientific the innovation the quarter. for in We coupled launched spectrometry, fourth chromatography spectrometry MX-Series industrial inductively

we Dynabeads to CTS and additions Life Gibco Detachable development new the in to Science life-changing introduced platform enhance further And cell the of manufacturing Solutions, therapies.

for and spectacular, innovation have the of year pipeline well. exciting we an was as another that future So

also continued to capabilities engine accelerate customers' research we productivity. to our we services Europe. expanding and innovation year, our and included customers and and to partner meet the current enhance deepen Throughout commercial their with the capabilities status XXXX, current future our expanded their U.S. strengthen industry-leading and our our in pharma This In needs. -- clinical our trusted

CRO our even customers to customers, combined move our the be customers stronger to enable our an unique truly partner introduced Development This and quarter, To leverages drug solution. we speed, and to in pharma Drug fourth not our offering and can Accelerator biotech for their capabilities This critical CDMO with on development forward value-add or efficiency, programs R&D huge investments. their alone do helping with they for return competitors. our quality improve a our something and is their

incredibly Customer future we're drug winning business, new about feedback and of positive. been impact accelerated our has excited We're the development capabilities.

year. be umbrella approval partnerships in our partnerships. myeloMATCH brain National announced patients with Institute cancer. living customer assay also throughout treatment type Dx and our diagnostic significant Target trial, [ companion the as the for with of glioma, of test, used for July. collaborations serving to included This that's made is with a as the partnership which precision our ] Oncomine FDA our We in then for Torrent the [ customers medicine we next-generation a a And advancements Cancer on This ] example another Ion sequencing-based first

are of Scientific entered Finally, establish Center with drive success the working into the a during with demonstrate quarter, Fisher to we to and we Medical Sciences of customers for Thermo there. patients. partnership partnerships Proteomics enable meaningful University Excellence impact fourth a These Arkansas close our for how their for

our of another So excellent strategy. as it you growth see, can was year advancing

PPI continued drive System. better year. Business is quality, and gain PPI into benefiting System application PPI generative execution and our to our and from find also engages allegiance. Business outstanding all every the to of helping always, us to way of customer We're improve a the our PPI AI enable share productivity As empowers colleagues throughout day.

improve Our internal customer deploying the and ways colleagues processes world actively products enhance streamline experience, and to the services. finding Gen our AI, are around new

results, our ways find only not future our a very bright it's PPI helping to team So enable ensuring company. excellent new financial success, to our also do customer to for contribute our

capital to deployment. Turning

continue deployment our including create successfully capital substantial to M&A strategic fourth to of billion of tremendous combination our $X stock in repurchasing the a $X.X and through execute to our dividends, returned strategy buybacks We and XXXX, capital disciplined of of this we value. to shareholders through capital quarter. In We return shares do shareholders. billion

during Pharma capabilities. Biobank integration U.K. the by Science of is of completed M&A, the year, of largest the a solutions is latest now for the Olink, selected was provider advanced technology Project Proteomic In Olink of leading kind, our The acquisition our proteomic business. we smoothly. quarter-end, proteomics human progressing support research. And Olink after value of our study the just to of our its Proteomics validation world's terms

products of to Site, shareholders. Diagnostics our celebrated our about We all X-year I just delivering disciplined think When for of and unparalleled acquisition long-term track Binding creation record, Protein about M&A the This proven growth deployment example business. launching in of a This investment. our again a low great in incredibly the teens and capital XXXX, is well on impact new return strategy of performed action. the value our it's the now approach business anniversary recent our driving

you brief our on a give Let initiatives. me update responsibility corporate social now

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

good impact and We our communities in proud by planet, are this a a our took actions steward we also regard. being and in have supporting of XXXX positive the of

progress emissions, map and sites Zero solutions. and meaningful new of road shipping products greener Certified We on Zero the Net our by our Waste number made launching our reducing increasing

the help globe, improve most advance the new we health significant companies formed also by named to to our Fast contributions outcomes health in diagnostics of world's for We Company equity. that one collaborations were innovative across and

have customers. our than students Additionally, education to become as, STEM programs, we ultimately, students in helps engaged globally. advance our we This continue they'll ensure reaching sciences future more XXX,XXX the to

I team year, of what proud on I'm very As the accomplished. our reflect

to have very and to customer who a the build we success bright We more Together, year continue ahead. advancing are our and XXX,XXX colleagues I'm than about company, dedicated future our passionate science. for enabling excited

Stephen now will outline factor turn to assumptions the quickly let into me me let but guidance. highlights. that the guidance, cover the So

System Business again And $XX.X the We're X% X% growth. growth. we to range initiating PPI will share. range and XXXX which $XX.XX, to $XX to will once which strong deliver gain, guidance assumes X% to in strong per X% growth guidance enable billion of will we XXXX, our earnings revenue adjusted very and In earnings organic an adjusted a represents execution EPS outstanding billion, $XX.XX of share in deliver

all for incredibly we opportunities position our future build a to value as our brighter great the XXXX. stakeholders have and and We're with enter even in customers we for I'm of an excited our company. create by

So takeaways summarize to key our for XXXX.

Our proven share strategy significant continued drive gain. to growth

with and for continued the We to to XXXX relationships this, trusted the year. performance with our our with PPI finish status and full combination deepen elevate us Business And excellent in enabled differentiated many customers. power the System, an partner quarter to of deliver the

As strong strengthen performance positioned are we further we excellent competitive momentum, XXXX our well deliver financial and enter long-term with to position.

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

Stephen Williamson

Marc, everyone. Thanks, good and morning,

As we in guide. assumed financials excellent and well the what QX our of press of our The you executed saw team quarter QX. was an significantly prior we in ahead midpoint had in delivered the release,

very we QX under ended growth by $X.X and free $X.XX, organic cash the strong adjusted X flow, year. for EPS with just beat We the delivering year points, billion by

we Looking as each The we year, year. growth back had out the quarter. of steadily a very beginning with markets outlined improving played 'XX, successful the at on

enabled gain System Our Business proven and growth the consistent share strategy great drove PPI execution.

to whilst this us leadership. of XXXX. to industry excellent us in differentiated year, performance financial deliver our consistently the This great deliver position a further all strengthening All enabled an throughout puts

to share. me provide full QX EPS some on details with now the grew additional Starting you year with Let $X.XX. earnings XXXX X% performance. and In our per adjusted quarter,

was it of full GAAP was $XX.XX. EPS the year, delivered the in for quarter the and, full we $X.XX $XX.XX. EPS year, adjusted For

reported reported grew The QX, revenue growth, and included change revenue a the increased X% exchange. contribution revenue headwind X% In line, top X% organic slight acquisitions core On X%. our from a from components organic of QX foreign year-over-year.

and XXXX, year year-over-year. revenue million and full of all comprised were In million the vaccines testing pandemic-related therapies. $XXX revenue reported million of and delivered $XXX For flat approximately XXXX, core organic of $XXX from we organic

Turning and digits. geography. digits, North performance low to grew grew digits, Europe grew by mid-single growing America revenue our mid-single Asia single with organic China QX, In high Pacific digits, single

and year-over-year, low North Europe was year, single America Asia digits. full declined the digits, grew Pacific and Asia Pacific flat within For low China single

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

productivity, initiatives, this strategic the cost our investments and reflecting execution good quarter. to industry fund pull-through. In volume we our management quarter, and we of delivered continued to us expected leadership drove strong mix offset advance the This unfavorable further the of impact enabled

For full billion of higher year. delivered adjusted XXX Total income gross adjusted the margin margin basis was and year, operating in the quarter we XX.X%. $X.XX was last points XX.X%, company operating than QX adjusted

For was XXX XX.X%, an XXXX. margin basis points full year, adjusted of the gross versus increase

of SG&A the of on Moving the the Adjusted revenue. details P&L. to XX.X% in was quarter

QX. was of adjusted year, R&D SG&A million full XX.X% was revenue. Total the in expense For $XXX

a ongoing reflecting expense of in year manufacturing was our high-impact as was revenue billion, for year, R&D up X.X%. year-over-year, our X% full investments the innovation. the full For percent $X.XX R&D

Looking line. at the results below our

net QX by our for strong QX slightly million, was million, higher management Net of flow. portfolio Our a effective debt million interest expense XXXX. $XXX full cash our $XXX the was $XX year interest year-over-year, decrease driven and than of expense

The and in year, in adjusted full XX.X% the XX.X% line with expectations. rate for was our QX tax

QX, Average $X $X XXXX we bringing million shares total X option of lower repurchased diluted billion for to our shares, repurchases in repurchases were net of driven In dilution. year-over-year, by QX, billion. share XXX million

investing was billion to of was free cash billion, and after capital flow and flow flow from cash cash billion Full sheet. the expenditures. $X.X $X.X balance net operations free Turning $X.X year

with $X buybacks through and During of of $X.X of M&A deployed acquisition billion capital, $XXX of the capital XXXX dividends. Olink billion of $X.X approximately billion billion through to shareholders $X.X return and the we million the of form in

total billion cash of investments We and billion with and in quarter ended the $XX.X short-term $X.X debt.

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

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

biosciences segments, X%. Sciences performance provide driven by X% segment some in starting this with and X growth organic was bioproduction Solutions. the revenue Growth on color business segment revenue in this Now of our QX reported grew our and businesses. Life was

For reported year, the versus declined was XXXX. revenue full X% organic and revenue lower X%

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

and pull-through, During QX, we delivered by offset investments. which strong productivity and strategic was partially good mix unfavorable volume

For the XXX adjusted X%, increased operating operating was full versus year, income and points basis adjusted margin of XX.X%, an XXXX. increase

reported revenue strong revenue electromicroscopy In was quarter by led segment, Analytical was mass chromatography The spectrometry organic the grew and X% X%. the growth and businesses. in Instruments and growth

revenue For year, full revenue X%. reported organic both and the grew

favorable and mix up operating QX points income had we margin increased XX% investments. and adjusted basis was the FX. This In year-over-year. strategic XXX In by adjusted and XX.X%, strong was quarter, delivered productivity this unfavorable operating and offset volume segment, partially pull-through good

XX.X%, and X% increased income operating than adjusted lower adjusted XX year, operating XXXX. points full the basis For margin was

QX, as care reported transplant QX, immunodiagnostics grew in diagnostics revenue Turning revenue X%. organic market and led health Diagnostics, In was and our segment this by growth to in channel. as businesses Specialty well both

For the revenue organic was full and X% year, X%. revenue increased reported growth

QX adjusted XX.X%, operating QX operating basis Diagnostics X% for Specialty and margin increased than XX income points XXXX. adjusted lower was

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

was year. adjusted XXXX XX higher an income operating operating year, the of than full points For and XX.X%, the was adjusted versus margin X% basis increase prior

QX. was the services grew a in growth impact Biopharma quarter. This channel. and The segment organic of And Products revenue runoff growth very on by in revenue and segment, therapies revenue Laboratory this and year business finally, both good Services offset X% in our reported mid-single-digit safety the versus pharma in research had prior vaccines and and market

flat. the full grew revenue and year, reported X% was For revenue organic

segment, is this strong we increased X%, productivity, XXXX. which was and adjusted is to margin which strategic delivered In and mix. adjusted flat operating quarter, QX investments QX by operating unfavorable XX%, the In offset income

income margin versus was XXX year, lower adjusted full and XXXX. operating X% which adjusted points the declined is operating For XX.X%, basis

to guidance. now Turning

revenue on XX to range guidance $XX.X X% to $XX.XX a X% initiating As Marc a guidance revenue of X.X% and of points we're and $XX.XX. guidance revenue to billion adjusted $XX and billion, runoff outlined, of This range EPS X% an XXXX adjusted organic headwind exchange the headwind the growth pandemic-related basis from foreign revenue from remaining expansion. margin of approximately assumes operating

in will adjusted EPS. All enable of this growth X% X% strong really to a

proven growth and our The industry-leading the reflects our Business of our strength position, of PPI guidance System. strategy power the

industry guide, we growth down we digits. than detailed low XXXX, XXXX, now me will In context market estimate growth Let the In market market with expect starting the the some growth better XXXX. behind the was single framing. more provide be

market improving slightly We progresses. year growth the the as year, for expect will be positive

share to market range a context of organic X%. With growth be we this very the expect gain, and XXXX strong for X% in to

earlier, includes pandemic in from research Now as headwind I a the of remainder business. largely clinical commented runoff, X% our this the

company total So strong. is the growth underlying

FX. to Turning

Given recent from approximately changes will assuming of or X.X FX be there in million rates, from XXXX points. we're headwind revenue in $XXX a

Putting all to organic and to revenue. top this assumes from This increase XXXX. X.X% our revenue in together, dollars increase is X% a reported in step-up a strong a X.X% X% guidance line

to line. the bottom on Moving

base. of very and use operating points. revenue basis actively System productivity growth, cost very actions incremental the pull-through adjusted are year expect we deliver enabling the past expansion PPI growth our adjusted the of XXXX. EPS strong to manage continue a on of margin We and cost XX enable This accretive to to took approximately of strong in we dollars The Business very years drive couple will over will

to positions advantage all which interest of range deposits. very $XX.XX to this line, growth rates cash And of us the strong effectively and $XX.XX, year. managing adjusted taking EPS is a and and of cash great will for we're in enable from the X% X% deliver the Below debt our

in environment, to assumed is the In terms cover guidance the our potential changes. impact of changes macro modest policy of

help assumptions And with the your you few additional modeling, then here behind guide. to a are

billion adjusted that $XXX by expenditures between $X.X increased expecting net expense XXXX. We're cash billion expect of billion driven the of range year. net XXXX. $X assume will to $X.X for XX.X% in interest the billion assuming in income million free the be We $X.X earnings. the and We largely XXXX, capital approximately is we're rate of in And in flow tax

of completed buybacks, in of assuming average we we're XXX year And year of million already return dividends. January. terms the count share assuming which million capital share to $X In XXX this be and And we're were diluted billion approximately to shareholders through capital million deployment, between estimate full will $XXX shares.

largely in phasing also is And year. finally, I flat X is touch Embedded wanted EPS services the the QX, driven to within the our the organic assumption is in in growth of than prior the This for QX. phasing quarter is revenue by days for year that QX QX. an growth year on guidance as less selling having adjusted and

a successful So in XXXX. off conclusion, capped QX very

company on the We the the we growth expect forward and excellent through you 'XX really a I year. share adjusted delivering EPS our gains manage performance. progress enabling in well as updating and very go continue and opportunities to financial to to look strong on focus

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

Rafael Tejada

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

Operator

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

Michael Ryskin

there something Stephen. that briefly with start closing to flagged your want you in I remarks,

I into there's the built despite expand and more changes feels going just into I even guidance mentioned talk on from you broadly coming just where methodology uncertainty a modest -- a changes, It wondering how export years, things specifically still think if lot you like we're will on XXXX. weeks of I'm and guide. policy announced early about policy that ago couple tariffs, play really It's these some of lines. as relates last it couple out. government too controls to say product like specific NIH, tough the and to could

you you additional color helpful. assumptions your built what wondering Any provide into there guide, the just these just -- factors? are would much you how I'm conservatism on So of some could if be

Marc Casper

key start with a points, for embedded the So guide. policy Maybe little kind and -- I'll actually we from on question. what's a bit a the of in thanks then I'll the summary of Mike, perspective, talk going the what about

me a So bear bit. little with

great I So well, future. think when the customers. and team momentum and Ultimately, status are the for performance our very points the right? trusted continues with quite key I about to And positions a was bright the differentiated XXXX, executed think partner the strengthen financially really company

growth Fourth Market in beginning sequentially fourth the positive quarter our expectation saw was EPS. the for last year. as we in We at and we conditions, EPS, thought they is growth strong, right? market with X% which of throughout organic improved year the X% quarter adjusted expected. the growth, what

is predictability So is the which industry, back in our great.

that is deliver embedded our to view is really X%. our volatility, the And in guidance market XXXX, adjusted When about So is year right? focus, organically progresses. to we're I X% uncertainty terms of our as what always good assuming X% delivering strengthen continue think what there's this EPS And especially level in to we're entering And or returning the in the of market and conditions to year guidance with best of growth. the right? some us positive that will the outstanding total EPS momentum, growth given year, X% we

it, actively So and we're the that's about thought managing how we business.

the So excited what's year ahead. we're very about

I that -- when know unless there our it's becomes what's I on through it, such our philosophy. through about of it. deeply articulate just to the think embedded, opportunities, or within right? unanticipated magnitude, changes of think bad, manage side the we a changes, reasons would changes, reason or you the Now It manage job Within policy good is we

reasonable perspective. perspective, a I'm we're regulatory to more in a ideas being of focus on business economic environment, much policies. much is more but any excited from particularly about more very excited really U.S., of business-friendly materialized with the growth. that I'm today, a So much from we the discussed be the What is likely an thought particular about yet to there's where, see into environment going M&A environment not a lot -- the

company and therefore, unbelievably not and and they're our And think what whatever holds. it, are I about when about and customers what the our environment excited do, navigate medicine important, we're does we'll science discretionary. And

Michael Ryskin

Okay. for a quick Marc. That's helpful, And follow-up. then

anticipated, think basis you're you earnings expansion. than XX we In operating strong, terms top guide, better anticipated. I the right, most of line points said think power the had That's margin I EPS especially Stephen, given subdued environment. had very

could there cost you And the mentioned you've maybe on if incremental taken contribution mix are the actions past. shift? throughout So expand that. color growth the XX cost from But you or of return in some actions basis 'XX? Just volume Sort on any of what's that to points.

Stephen Williamson

Yes.

Mike, that's so yes, pull-through. right really yes, So volume the good number. And

really the our about So normal, high than over to at we're revenue more when down I clip. of pulling a years from had they're areas past and of taken is actions business certain as the of through that we've making volumes coming the incremental like of pandemic, the normal lower back have wound cost impact and sure couple volumes kind the think we've

So see numbers. the great embedded in to that, and that's

And then not managing of it's able initiatives, to and cost our PPI Business using just appropriately to about do just that. P&L huge kind it's System be the

in the strong year. good and for cost productivity line the top we're that environment very driving management in So

basis So what's bring driving that all together, points. XX the that's

Operator

JPMorgan. with comes question from Vatnsdal Rachel Our next

Rachel Vatnsdal Olson

funding to specifically federal of reports few around wanted last I Mike's up changes NIH seen of weeks of funding. around follow to the So answer Obviously, first potentially the we've getting new that some seen, your some question the administration. but the on frozen light in to we've policy

headlines that at your that some disruption at early time, So you and I these customers. policies of like. these it's we to the some same could would don't But have know what ultimately driving appreciate imagine days of are look

can market? new how walk in the and NIH you terms behavior, you out play that actually this seen academic of you since are expecting especially And within So through to funding have what year? government customers' us administration turnover

Marc Casper

Yes.

it's so in So Rachel, X the been terms days, environment. of

and there's on. actually the real yet, are policies and there's the And President's going There and into working what's no job our well. as navigate industry don't the administration, customers' good the collaboratively on work and a relationship being certainly things I is with educate right? customers work, So our obviously, of we with administration explored. our think insight And different first environment to help our have any importance

customers from at our perspective, my is. So look whatever it navigate will help

our globally, will be company terms markets guidance, average you when that, our the I government slightly in this company academic think And that the in I assumed be around world. U.S. a biotech would and below would say of for When I pharma half because in embedded ultimately average there, what's about the think what's maybe and and in better little end-markets. than and half bit of about is about terms the the end-market year of in think academic government around and is

quarter. market right? had strong And really incredibly Interestingly and government strong, It year. globally it every finish very strong a fourth end the really was obviously an in the academic had enough, we in to was

helpful. So hopefully, that's

Rachel Vatnsdal Olson

Analytical XQ. quarter Yes, I wanted was a nice really that up. just then, follow To up is. for Thanks Instrumentation. framing on that Obviously, in ask that to

of some the of regarding drivers China your are Did in that performance any trends benefit walk China beat? stimulus the look assumptions guys So And number? see any contribution? you And Analytical through XXXX, can flush from budget there was stimulus what then us Instrumentation in at that for when you you quarter?

Marc Casper

Yes.

So Rachel, thanks.

that's environment the Our for And instruments year, contributor the positive And muted the China full fourth had in relatively business quarter, for really as China X% instrument meaningful the organic year. full across a a an year. business capped off where industry. to is once was growth very growth X% the with know, again you

job. great team a doing really So the

spectrometry. of I launched. we of it terms difference. another, And in whether even ion and And And whether right, roll products right, drives in what really of also type on if products, you instrument So regions just in phenomenal the ICP-MS. with applications a in you that? makes remarks, are number see That many terms environmental the the other But chromatography, It's in of with to had huge think it's after mass chromatography it's my drumbeat in innovation. other new a see electromicroscopy, and you we products. steady about on narrow down,

and the is And driving great. gain. that's adoption share strong meaningful really Just

And the the way that that's funding, showed it how they the up. customers the our and relevant importance you they're of business of works find is innovation because doing, work have

business China it stronger terms in Orders flow orders instruments, stimulus In in China we how were revenue wasn't nice that was actually in in ship and will of XXXX. of received it, obviously instruments nice terms actually see that our to huge, revenue. on we and about in to quarter. but in It the it thought the was see the fourth

So as to there stimulus flow well. started

hopefully gives sense of our business. a that you good So in momentum the instruments

Operator

Meehan Our from Research. question with comes Nephron next Jack

Jack Meehan

So phasing of Stephen, forget talked Stephen year. about phasing Marc, about was -- talked the it the or you revenue of I you if the services during

us does bite, authorizations? clinical guide what So can just update, PPD for I'll new assume what of seeing give terms research? an the on you in And color you're

Stephen Williamson

Yes.

you the the aspect will are way. great give detail some both in about the Marc kind and I'll So businesses, more the which give phasing so by of shape,

comps pandemic-related phasing that timing said think QX there. QX, I So last year, in is It's some there's the in the runoff in more year. I about within pronounced given largely when the phasing the from

a phasing. phasing kind the quarter-to-quarter that's So phasing our the services noise. talked for I probably that's in pharma There's of in normal business, about largest that the overall bit little terms the of driver QX. But of largest of that's but piece a

Marc Casper

Yes.

customers. a capabilities that reputation things when the that, have, performance that I talking more about the business. with our for innovation you think been leading try when provider little think we're and today, was the So we and one development services services, And know, clinical of contract a leader as Jack, our about, and and pharma we've highlight And incredible combination quality it research to about for pharma bit I'll we're you capabilities. in of manufacturing a

the the over get it investments, customers those in investment industry. impact do improve spent you returns sets our leverage And to looking you having what have of We is capabilities, that pharmaceutical which compelling. on launched both value our Development, the And for years to is that of and added really at Accelerator the Drug X biotech insights R&D their can the allowing when is we expertise customers. is and the and capabilities really everything to of

So we're excited.

clinical team the I was delivered very of was that of from single-digit business meaningful the the job, more growth headwind year, research, basically And low think details business. about last think right? to The good about vaccines good that despite and job. really I runoff organic the we and therapies that grow a a in When did

about XXXX, future the that I long think when it's should, is business to is the would think way a And business. behaving it I which the cycle

think sets of to the of when And feels conversations underlying. have during very our that business, year, and bodes and for and guidance, strong I executive our year. great I lot the success. business. will XXXX, the up And IRA. When the So high line. be XXXX's conditions the the you having saw growth if with portfolios single-digit more well the a a particularly what's the That's XXXX in the half customers then for is the their cycle of trend with last The and measured pharmaceutical of last that is line the low single-digit year It were us it below industry, year has commercial of customers time biotech we that's of the we trend pipeline momentum It's environment result for XXXX. at this like authorizations, us. team year, towards the this about what at growth our actually they sort this look kind that even of I in end actually embedded for saw for reprioritizing business then look in XXXX's and back business similar

So overall, super positive.

Jack Meehan

the And the next, in Mostly the Awesome. for is the just fourth LRP that XXXX. just you about guide go the to you have? leading like as XXXX, broadly, can look And you're ability exactly joking, to talk just ] what where guide [ about targets quarter? I rate your want more you in me to confidence like does exit which of get back look . phases at the but

Stephen Williamson

a timing markets. to our market than so actually of growth trajectory just about growth get the the going highly gain understand you share the be to a proven X%. think 'XX what But industry will long-term you're in to It's get of organic I we're I'd above you Jack, stronger rate time. Yes, year's And we've thinking to X% company. that in thrilled Yes, about back be matter of that that to consistently how all, about point. confident of we're ability that, talk the the to drive first

to being this I improving. a guide at end down our that the towards And of points great When the about continued setup the I see going to going we will it's EPS improvement. at what And year, is Marc a slightly, to think year close out of growth the for end couple strong are transition job setting markets year. year from beginning, here market the up of through that's we're do this increase to remarks, growth. exactly the to really trajectory exact year. in point ending where we'll ahead. And the we to through adjusted that of market as as The the that we prepared said the that, is be said we get as the what continue expect as drive go back my period that's in normal And expect

Operator

comes Schenkel Our next Doug question from Wolfe with Research.

Marc Casper

on you're Doug, mute.

Douglas Schenkel

couple A on guidance. of that. about Sorry questions

to back comps, close playing about the range? you where line. with sitting to model, the That here top talked to first me organic So the thinking expecting to low growth quarter the of what that. through X% the is X% question the you're thinking your XXXX I in exit for a targeted stacks, about I'm rate. you through just the thinking And end are first starting at can leads see least of on

So that's my question. first

year rate the is the has growth that able be expansion get for back particularly level right any second margin type that you of revenue would the given wouldn't now It's there notable This close been in with below that your My of targeted growth. is especially your to to the guidance. XX lower long-term basis to of operating embedded speculation And impressive anywhere in points margin period. is be expansion your of construct. topic

you do obviously, that. to expect So

you as about function it a the other type come So really of of basically think where are: are questions of starting mix? do operating the of assume out this growth years and one, function Is else? shouldn't margin reasons a back of to you your future into this of tightly I to are XXXX? benefit we environment normalized And something guess part Is we allowing this it? in a it then what's in is, Is that a there of continuation potential getting construct? the tough

Marc Casper

thanks for question. So the

in is right? year a to our the future environment, in management focused So you And years, we're market shareholders of investors X market execution, in So on I bright and how in community as and a about and a going we're as is this change year performance that not with or an earnings start incredible is growth because we're It's per the expecting future. momentary great and in we investors creating let with a right? And most on, amazing and the know, to that power team, over, the analyst of organic industry can our share, of mix X, year. that's if those why, strong interactions the driver of well, as Business any a environment. And understand the we and the through focused a of months, with the but System, over our growth an what's things. the the been discipline. control But recovering industry, context, think last trajectory one rate what's great PPI things better many cost execution, we're recovering thing lot me creating better it's very value many the let's helpful of a have certainly have certainly of I great terms be in say,

leadership to very is how and bottom we're on focused a we delivering team, year the down As control, on which line. the our thing that is differentiated we another revenue focused drive can what fully

So right, the but right it's for not the number, long-term XXXX. new it's number

long-term to expansion that's XX points XX of X% the to would I associated about is X% But with way basis this the it. year, think appropriate an think driver. I

X%, of X% terms the should In a remind number runoff ourselves, to there's of one that pandemic. in headwind that of all final for point we thing just the the

pandemic revenue effectively this this is assumption year. X related -- our year So revenue

growth, to laid clearly do as can phasing back right? not has You say it's So year, days service the X%, of why. It's start Stephen the we assuming, that's at to flat stronger yet kind X% out. you can thing, the a revenue but normalized is growth getting you're the of about see if out, market to how a understand laying the we phasing not and specifically it's and

in say, there's up with You're you're a you're going strong at headwind, mid-single at the of you digits us, end to in point for right? not the but a encouraging. X% quite wind progressing can year to something X% the so well, And direction the would of be that

big future. deliver incredible the quarter an like sets expectations, going quarter this year. of and And this versus after market excited year, we're for step-up it to And a up conditions is we're for us in better last just

Operator

Jefferies. next with Tycho Our from Peterson question comes

Tycho Peterson

Synergies to program well. just to why want on I Marc, really accelerator and gone cover PPD little the is more understand have now the for time. a trying right

So might thinking to any how this to bogey bring of can to small light the of to next CRO you years in customers? any Is large of kind of additional in the customers, that point need has these brought or for kind terms service couple CDMO this more synergies? more you side offerings or And about on side? you're

Marc Casper

to for . confidence deliver. don't that XXX% held us. what I've and ingrained be of with to learned thanks able you expect going that promises you Tycho, the question. One have our is customers base, thing are So customer that deeply make you That's don't is our

on the last the remember for the then conversations to with actually we we really that declare that that cost continue medicines. because because to customers of of we opportunity them. capabilities in customers the all our potential and a years. company talked proof you to X Not results That was and time the had to the the haven't wouldn't for leveraging bend announcement but it if combined the we we strategy have working So great cases the we PPD, acquisition curve weren't until about it, talk about articulated. at great can us developing deliver And heard you confidence back of of place,

And to they capabilities performance. have and The choose, right? pick And is of in It's everything, terms customers our not off substantial. perceive insights customers the shave more lines, our be the to us our months strong from is that and and to time relevant momentum they buy effective rather and expertise. very can can authorizations excitement cost very leverage relevant the the expertise the how of weeks but and pick

they're you the will we're And excitement pipeline will seeing well. work across services faster typically And seeing doing. a molecule, pharma, think we're orders part that way. pharma I seeing it whole decision-maker is but great interest typically and large biotech, has pick about as and domain, that a being the large have interest and in When pharma authorizations sort their and work it's with of we're everything of because a language, on -- what you in orders, biotech

So exciting we're getting going. times, just it's and

as know, So these you long-cycle are businesses.

but actually 'XX it takes and in growth, the it So for really acceleration beyond. the some bodes orders revenue, into of certainly translate time and to well authorizations

Tycho Peterson

follow-up Great. you're China. hear growth year. China assuming this what for actually I didn't on And then

how trade the obviously, them to the exposure off you come procurement, list, and get magnified. don't thinking have exposure as products your headwinds about you're restrictions know volume-based able much Assuming And I time last to off, but there? think I then have were you

Marc Casper

Yes.

is we year is in reasonable I of a all, had the challenging, challenged. and framing end-market year, challenged first a the 'XX, very The think really about a So for China, very in that's economy environment, terms when year, strong next the of right? very,

We full fourth the digits in and business Our share. market mid-single grew the for low quarter gaining digits. year, single grew clearly

So good team a the job. done has

we from just year. economic of is last And evidence change, don't any assuming may what may recovery other the to is benefit. strengthening than that they'll perspective. but a see environment similar be stimulus. Stimulus be assumption, that that a -- expectation saw environment any we're yet an be we a will Our real not bad And

just conditions will muted that to to somewhat the year. last similar and So continue we assume be

our it's of China not fully much value-based your a in little health things bit on in specialty the headwind, is our is very and the us. area, there's executed, is diagnostic it's it's because that business procurement embedded of some exactly and care framing been terms In which very right, meaningful business, And while of large reimbursement have not for number. a a guidance, in a and small

looked so how at. we that's And

Rafael Tejada

X more for time have we question. . Operator,

Operator

Yes. Certainly.

Our with next Partners. Leerink question is Puneet from Souda

Puneet Souda

I'll wrap my question in X.

and On cap the side, biotech emerging versus the elaborate your the large side biopharma you early biotechs? customers larger could you're what biopharma hearing from

are about the XXXX filings used China very molecules in question 'XX brief to and in side. or to Marc, IND on assets that small in be XXXX. from practically nothing FDA China, the and another number of the from therapeutic And XX%

you if What if Thermo So discovery and you is industry drug to could? do implications positioned? the China, overall, is for more for my think the tools the pivots Thermo question of are how

Marc Casper

Yes.

thanks the So question. for Puneet,

Europe. well right, So many as with -- where I I I an things many our out both what January, spend to in get Coast customers, January, as about about what's enormous is there's time West love love but convene, the in

larger are very that a their how the adopted companies and medicines last help the the over positive year I've enter there's from they've seen get ability the start relevant spot. the couple confidence a in of what biopharma, excites good some customers. And benefiting Obviously, actions in health. So a real if for put of there, if the hugely feeling number are quite can quickly and years really in companies the And they terms great the that the that terms to taken human say confidence obviously, have have GLP-Xs impact. of with I like customers, change larger in like really quite I themes, of everybody

that time, I of customers, it a grow meaningfully about emerging be to still more for think better. a the actually, there the in year space, pharma reasonable funding on which actually, help also budgets. allow but to over as And And And was partnerships so feels when to and right? confidence mind seems continue certainly me improve is better recovering, unfolds. . And will large positive, to to that funding

Western you're think, a In market, a deals. to that it the things became terms for back, seeing really licensing work after of in where more as, are of serve you're amount happens company licensed. few difficult innovation There's labs a ultimately, global is, I years the very seeing huge what China-based

So well in China, but positioned globally. obviously well we're positioned we're

So for question. thank the you

of up wrap just me Let with a things. couple quick

thanks, all, participating First in of call for today. the everyone,

excellent this year XXXX. momentum, great and in to with strong We a entered an we're deliver position

As your look of Fisher forward always, Thermo everyone. Scientific. Thanks, for updating to And progresses. you year as you thank support the we

Operator

you very everyone, Thank appreciate much, participation. your joining for us. We

now may your disconnect You lines.

Thermo Fisher Scientific (TMO) 30 Jan 252024 Q4 Earnings call transcript