Danaher raises full-year EPS guidance to $7.70-$7.80 amid robust bioprocessing growth and portfolio resilience

Earnings Call Insights: Danaher Corporation (DHR) Q2 2025

Management View

• Rainer M. Blair, President and CEO, announced a CFO succession plan, stating that “Matt Gugino, the current group CFO of our Life Sciences Innovation Group and Vice President of Corporate FP&A will succeed Matt McGrew as Chief Financial Officer of Danaher at the end of February 2026.” Blair praised McGrew’s tenure, noting his role in key acquisitions, public company launches, and guiding the company through the pandemic.

• Blair highlighted “strong growth in our bioprocessing business, paired with disciplined cost management, enabled us to exceed both our adjusted operating profit margin and cash flow expectations for the quarter.” He described the macro environment as “fluid,” but stated, “we’re intensely focused on what we can control.”

• The company launched several new products, including Cytiva’s MabSelect SuRe 70 and MabSelect PrismA X resins in Biotechnology, and SCIEX’s ZenoTOF 8600 mass spectrometry platform in Life Sciences. In Diagnostics, Danaher announced a partnership with AstraZeneca to develop precision medicine diagnostics, leveraging technologies from Leica Biosystems.

• Blair reported, “Sales were $5.9 billion in the second quarter, and we delivered 1.5% core revenue growth.” Gross profit margin was 59.3%, adjusted operating profit margin was 27.3%, and adjusted diluted EPS was $1.80.

• Matthew R. McGrew, CFO, stated, “I think we’ve probably got about half already, Scott, and the other half will come as we work through the second half” regarding the $150 million in structural cost reductions. McGrew also explained, “We started in January, we call it, [$7.60] as sort of the range. Put the $0.20 on top of that, and that’s how you get to kind of the high end of the range now at [$7.80].”

Outlook

• For the full year 2025, Danaher continues to expect core revenue growth of approximately 3%. The company raised its full-year adjusted diluted net EPS guidance to a range of $7.70 to $7.80 from the previous $7.60 to $7.75.

• Third quarter expectations include core revenue growth in the low single-digit percent range and adjusted operating profit margin of approximately 25.5%.

• Blair stated, “We expect high single-digit core growth in the second half” for the bioprocessing segment, reaffirming long-term growth expectations.

Financial Results

• The company reported $5.9 billion in sales for the second quarter and 1.5% core revenue growth. Free cash flow for the quarter was $1.1 billion, with a first-half total of $2.2 billion and a year-to-date free cash flow to net income conversion ratio of 143%.

• Biotechnology segment core revenue increased 6%, led by low double-digit growth in consumables. Life Sciences segment core revenue decreased by 2.5%, and Diagnostics segment core revenue increased 2%.

• Blair noted, “Beckman Coulter Diagnostics led the way with high single-digit growth outside of China and notable strength in instrumentation.”

Q&A

• Michael Leonidovich Ryskin, BofA Securities: Asked about bioprocess order trends and impact of trade tensions. Blair responded that “performance and trends in Q2 were very consistent with what we saw in Q1. Consumables continued to lead the way globally with low double-digit growth…” and described order delays in equipment due to trade policy. He emphasized, “our book-to-bill was consistent with prior quarters and around one.”

• Douglas Anthony Schenkel, Wolfe Research: Asked about bioprocessing assumptions in guidance and pricing. McGrew confirmed, “high single digits is still our guide for the year for the bioprocessing piece” and cited “about — call it the first half, 1.5%, 2% kind of price is what we saw in the segment.”

• Scott Reed Davis, Melius Research: Inquired about structural cost-out progress. McGrew replied, “we feel very comfortable and confident that we are going to get all of that $150 million.”

• Tycho W. Peterson, Jefferies: Queried about EPS guidance flow-through and second-half expectations in Life Sciences. McGrew explained, “there are two other things… we have not flowed through fully… we’re going to maintain the full-year respiratory guide at $1.7 billion.”

• Vijay Muniyappa Kumar, Evercore: Asked about biotech guide for Q4. McGrew stated, “we’ve got high single-digit core for both Q3 and Q4.”

• Puneet Souda, Leerink Partners: Questioned tariff exposure and gene therapy risk. McGrew said, “we’re still at kind of a couple of hundred million dollars of exposure right now today” on tariffs. Blair clarified, “Aldevron, Sarepta revenue, we expect to be $30 million for the full year, with a minimal contribution here in the second half.”

• Rachel Marie Vatnsdal Olson, JPMorgan: Asked about bioprocess equipment recovery and respiratory revenue. Blair replied, “we expect 2025 is going to be a down year for equipment” and for respiratory, McGrew stated, “I think we’re at this point, probably 75%, 80% 4-in-1.”

Sentiment Analysis

• Analysts expressed cautious optimism, frequently probing on the durability of bioprocessing growth, tariff impacts, and the sustainability of Life Sciences recovery. Tone was generally neutral to slightly positive, with congratulatory remarks on management transitions and constructive follow-ups on guidance details.

• Management maintained a confident and measured tone in both prepared remarks and Q&A, reiterating conviction in bioprocessing growth, cost management, and portfolio resilience. Blair and McGrew consistently emphasized stability, referring to “focused execution” and “encouraged by the strong first half.”

• Compared to the previous quarter, both analysts and management maintained similar levels of cautious optimism, with management slightly more confident in guidance and structural cost reduction progress.

Quarter-over-Quarter Comparison

• The CFO succession announcement is a new development this quarter, with a clear transition plan set for February 2026.

• Bioprocessing guidance is reaffirmed at high single-digit growth, consistent with Q1. Life Sciences segment remains challenged but is expected to turn flat for the year, with anticipated improvement in the second half.

• Structural cost-out efforts progressed, with half of the $150 million target achieved by Q2.

• Management raised full-year EPS guidance, while maintaining core revenue growth expectations. Both quarters highlighted trade tensions and tariff mitigation as key themes.

• Analysts continued to focus on bioprocessing trends, tariff impacts, and China recovery, with little change in overall sentiment or focus areas.

Risks and Concerns

• Global trade tensions and tariffs remain a source of uncertainty, particularly affecting equipment orders and capital investment decisions.

• Management reiterated mitigation strategies, with McGrew stating, “we plan on offsetting all the tariffs, and we only plan on offsetting them.”

• Volume-based procurement in China continues to impact Diagnostics, with Blair maintaining expectation of a $150 million adverse impact for 2025.

• Exposure to gene therapy markets is limited, with Blair noting “Aldevron, Sarepta revenue, we expect to be $30 million for the full year.”

Final Takeaway

Danaher management emphasized the company’s strong execution in a dynamic macro environment, highlighting robust bioprocessing growth, disciplined cost management, and resilient recurring revenue streams. With continued investment in innovation and a raised full-year EPS outlook, management expressed confidence in delivering results and navigating ongoing trade uncertainties, structural cost reductions, and evolving end-market dynamics through the remainder of 2025.

Read the full Earnings Call Transcript