Dan Brennan

Dan Brennan asked about Revvity's 2%-3% organic growth guidance for 2026, questioning its conservative nature given recent improvements in the biotech market and potential for upside, and also inquired about the drivers of strength in life science instruments and reagents, including preclinical spending recovery and market share potential.

Answer

Max Grykowiak, SVP and CFO, explained that the 2026 guidance is consistent with the September framework, acknowledging positive market signs and outlining multiple paths to potential upside in revenue (preclinical markets, software launches, newborn screening, China immunodiagnostics) and EPS (margin expansion, tax planning). He added that preclinical market momentum and continued share gains in reagents are expected to drive strength, with demand development off positive indicators.

Dan Brennan asked about the 2%-3% organic growth guidance for 2026, inquiring if it was conservative given recent market improvements like MFN deals and biotech funding, and what potential upside paths exist. He also asked about the drivers of strength in life science instruments and reagents, specifically preclinical spending recovery, potential for market share gains, and indicators to watch for a business upturn.

Answer

Max Krakowiak, SVP and CFO, explained that the 2026 guidance is consistent with the September framework, acknowledging positive market signs. He outlined multiple paths to upside: in life sciences, no improvement is modeled for preclinical markets (pharma, biotech, academic/government), new software product benefits are not fully embedded; in diagnostics, prudent assumptions are made for newborn screening and China Immunodiagnostics. For EPS, upside could come from incremental margin expansion and tax planning initiatives. Prahlad Singh, President and CEO, added that the improvement in pharma biotech reflects cautious optimism, consistency in order trending, and greater clarity in the policy and regulatory environment, rather than a budget flush. Max Krakowiak noted that life sciences solutions performed in line with expectations in Q4, with reagents slightly better and instruments significantly improved sequentially.

Dan Brennan sought confirmation on the Q1 2026 organic revenue growth assumption of approximately 1%. He then followed up on the biopharma end market, questioning if the guidance's assumption of unchanged market conditions was conservative, given strong Q4 growth and expectations for increased spending post-deals, or if it reflected Thermo Fisher's market outperformance.

Answer

Stephen Williamson, SVP and CFO, confirmed the Q1 organic revenue growth assumption of approximately 1%. Marc Casper, Chairman, President, and CEO, acknowledged the strong Q4 biopharma growth and the company's consistent share gains. He reiterated the prudent approach of starting with market conditions similar to last year, excluding pandemic runoff, with a goal to retire risk and move up in the range as the year progresses. He noted that strengthening biotech funding, with its typical six-month lag, bodes well for a strengthening environment into the following year.

Dan Brennan sought confirmation on the organic growth assumptions for 2026 (3%) and Q1 2026 (1%). He also followed up on the biopharma segment, questioning if the guidance's assumption of unchanged end market conditions was conservative, given strong Q4 growth and expectations for increased spending due to MFN deals.

Answer

Stephen Williamson, Senior Vice President and Chief Financial Officer, confirmed the organic growth assumptions for 2026 and Q1 2026. Marc Casper, Chairman, President, and Chief Executive Officer, acknowledged consistent share gains and reiterated starting the year with market conditions roughly similar to last year, without the pandemic revenue roll-off. He stated the goal is to retire risk and move up in the range as the year progresses, driven by strengthening conditions in pharma and biotech, particularly as biotech funding flows. He emphasized a prudent approach and the company's plan to deliver 6%-8% EPS growth plus capital deployment benefits.

Dan Brennan asked for further elaboration on the onshoring announcements, specifically how to quantify the incremental demand from CapEx, capacity, and drug volumes, distinguishing between greenfield and brownfield projects. He sought to understand the potential sizing and magnitude of this impact for Thermo Fisher, including equipment uptake in 2026.

Answer

Marc Casper (Chairman, President and CEO) clarified that onshoring generates incremental one-time demand for new equipment, initial stocking, and labs over the next few years, even if overall drug volumes remain constant. He highlighted Thermo Fisher's stronger current presence, particularly in bioproduction, Solventum filtration, and DynaSpin bioreactor technology, which positions them for a higher share in new facilities compared to existing ones. Mr. Casper noted that while he couldn't provide an aggregate number, it should be a tailwind for bioproduction, which is already performing exceptionally well with strong bookings. Stephen Williamson (SVP and CFO) addressed the EPS impact of tariffs, stating that Q3 saw an $0.11 favorable pickup from tariffs and related FX compared to prior guidance. For Q4, he expects tariff assumptions to hold, with no significant pickup, given the increased tariffs between the U.S. and Europe since the last guidance.

Dan Brennan returned to bioprocessing, noting that the overall biotech segment's 6% guide for the year is lower than 2025, and asked if this implies a slowdown for consumables given stronger equipment, and if his math was correct. For life sciences, he sought more detail on the pharma piece, given academic markets remain muted, and inquired about current trends and the potential for further improvement in 2026, especially with MFN and tariffs hopefully resolved.

Answer

CEO Rainer Blair clarified that the bioprocessing *business* (not the broader segment) is expected to grow high single digits for the year and Q1, with equipment projected to be flat. The overall 'biotech segment' includes Discovery & Medical, which is expected to be flat or slightly down, balancing the high single-digit bioprocessing growth. He emphasized no slowdown in bioprocessing. For life sciences, Rainer reiterated that pharma is the largest end market, showing growth for three consecutive quarters due to recovery post-MFN deals. He expects pharma end markets to continue improving, clinical/applied to remain stable, and academic/government to be muted but with potential for upside as policy stabilizes.

Dan Brennan (TD Cowen) questioned the bioprocessing guide for 2026, suggesting a potential slowdown in consumables if the overall segment growth (around 6%) is lower than 2025, despite stronger equipment. He sought clarification on the starting point for the 2026 guide. Brennan also asked for more detail on the pharma piece within life sciences, what Danaher is observing, how it's guided, and the potential for improvement in 2026, given academic demand remains muted.

Answer

Rainer Blair, President and CEO, clarified that bioprocessing consumables are projected for high single-digit growth (upper end), with equipment flat, leading to overall bioprocessing high single digits for the year. He attributed any perceived slowdown to the Discovery & Medical segment, not bioprocessing itself. For life sciences, Blair reiterated that pharma has shown three quarters of growth post-MFN deals and expects continued improvement, stable clinical/applied, with academic/government representing potential upside as policy stabilizes.

Dan Brennan asked about the bioprocessing equipment side, specifically how Cytiva's built-up capacity and the trend of reshoring/onshoring might impact demand over the next few years, including potential benefits for capital demand and recurring revenue in late 2026/2027. He also inquired about the 2026 guide for the life science segment, particularly the assumption of flat growth, and whether this is a conservative estimate for instruments versus genomics.

Answer

Rainer Blair (President and CEO) explained that equipment demand is driven by manufacturing growth and regionalization of capacity (reshoring). He expects continued investment, starting with brownfield projects for quicker capacity, followed by larger greenfield investments over several years, potentially leading to an extended capital cycle. Policy changes and tariff/MFN discussions have been an overhang but are dissipating, providing more confidence. For life sciences, Matt McGrew (EVP and CFO) confirmed the flat growth assumption for 2026. Rainer Blair added that clinical/applied markets are solid, pharma R&D is modestly recovering, but academic/government demand (low single-digit exposure) is soft. He expects some headwinds from large customers in life science consumables to lap, leading to modest growth next year, but for planning, flat growth is prudent until order trends confirm upside.

Dan Brennan asked for a broader perspective on the bioprocessing equipment side, specifically how Cytiva's built-up capacity and the trend of reshoring might impact demand over the next few years, distinguishing between incremental demand and regional shifts, and potential benefits for Danaher in late 2026 into 2027. He also sought further details on the 2026 life science guide, which assumes flat growth, asking for a breakdown between instruments and genomics, and what would be needed to achieve even zero growth, questioning if this outlook is conservative.

Answer

Rainer Blair, President and CEO, explained that equipment demand is driven by manufacturing growth and regionalization of supply chains (reshoring). While policy discussions have delayed investments, confidence is growing as overhangs dissipate. He expects initial brownfield investments to quickly add capacity, followed by larger greenfield projects, potentially leading to an extended capital cycle, though this has not yet translated into orders. Regarding life sciences, Mr. Blair noted that clinical and applied markets remain solid, and pharma research spending shows modest recovery. The academic and government segments, which are a smaller exposure, are currently anchoring growth. He also mentioned that life science consumables are lapping headwinds from large customers. Matt McGrew, Executive Vice President and CFO, confirmed the flat growth assumption for life sciences in 2026, consistent with recent performance, but acknowledged potential upside if order trends improve.

Dan Brennan asked for a high-level overview of the 2026 guidance (4-6% core growth), questioning if it prudently balances global puts and takes or if it contains conservatism. He also sought more color on the GC upgrade cycle, its progression versus expectations, and assumptions for its ratable contribution in 2026.

Answer

President and CEO Padraig McDonnell stated the 4-6% guide is prudent given macro uncertainty and tougher comparisons, but highlighted strong momentum from innovative products, unified sales, and Ignite. He noted potential upside from a broadening pharma recovery and China stimulus (not in the guide). President of the Applied Markets Group Mike Zhang confirmed high single-digit growth in GC for Q4 and described the GC replacement cycle as normalized and returning to pace. He emphasized Agilent's large, aging install base as a sustainable tailwind and new innovation under Ignite to further sustain the cycle.

Dan Brennan asked for a high-level assessment of the 4-6% core growth guide for 2026, questioning if it prudently balances global puts and takes or if there's conservatism. He also sought more color on the GC upgrade cycle, its progression versus expectations, and assumptions for its ratable contribution in 2026.

Answer

President and CEO Padraig McDonnell described the 4-6% guide as prudent given macro uncertainty, noting strong momentum from 2025 and improving key markets. He highlighted potential upside from a broadening pharma recovery and China stimulus not included in the guide. Mike Zhang, President of the Applied Markets Group, stated that the GC replacement cycle has normalized, with a large, aging install base creating a sustainable tailwind, and new innovations are expected to further sustain this cycle.

Dan Brennan of TD Cowen asked about the NICU's contribution to Q3 2025 volumes and Q4 guidance, the drivers behind the better-than-expected Q3 performance, and the outlook for OpEx spending, particularly regarding the general pediatrician market.

Answer

Katherine Stueland, CEO and President, noted significant NICU growth and progress on Epic Aura integrations. Kevin Feeley, CFO, detailed that Q3 strength came from core outpatient markets, with strong conversion to exome/genome and pNeuro account activation. He outlined OpEx investments in a dedicated pediatrician sales team and R&D, expecting sequential OpEx growth to drive mid-2026 volume, while reaffirming profitability.

Dan Brennan asked for an update on GeneDx's NICU performance in Q3, including its contribution to the implicit Q4 volume guide and early feedback. He also sought details on the drivers of Q3's better-than-expected performance, specifically regarding same-store sales growth, new indications, and new doctors, and how these factors inform the Q4 guidance. Finally, Brennan requested clarification on the OpEx outlook, particularly the expectation for pediatrician volume growth by mid-2026 and the impact of the pediatrician call point.

Answer

Katherine Stueland, CEO and President, highlighted the NICU as a significant opportunity, noting fewer than 5% of babies receive genetic testing and confirming meaningful growth in same-store sales. Kevin Feeley, CFO, added that NICU volumes are growing nicely, tracking towards an incremental 2,000 units in H2 2025, mostly in Q4. He attributed Q3's strength to core outpatient markets, particularly expert geneticists and pediatric neurologists, with strong account activation. Feeley explained that OpEx investments, including building a dedicated general pediatrician sales team, are deliberate for long-term growth, expecting similar sequential OpEx growth from Q3 to Q4 while maintaining profitability.

Dan Brennan (via an unknown analyst on the line) asked for more detail on the accelerated tissue growth, including doctor adoption rates for the combined portfolio, pricing opportunities for GPS, and the reasons for slower growth in liquid-based tests.

Answer

CEO Michael McGarrity explained that tissue growth is driven by both a 'push' from pathology partners and successful penetration within large urology practices, leading to 'sticky', compliant adoption without expanding the sales force. On pricing, he noted the focus is on both advancing ASPs and reducing COGS through scale and efficiency. Regarding liquid tests, McGarrity described the slower growth as a tactical decision to focus sales incentives on the higher-margin, higher-growth tissue-based portfolio, which is performing as planned.

An analyst on behalf of Dan Brennan asked for more detail on other potential cost-saving levers the company could pull if the challenging environment were to persist.

Answer

CFO Adam Taich reiterated the over $50 million in 2025 OpEx savings already actioned, split between headcount and discretionary spending. He noted that there is more that can be done, particularly in discretionary areas, and emphasized the company's commitment to remaining nimble to protect its balance sheet. CEO Serge Saxonov added that the company will be agile while navigating the environment.

Asked for details on the recent ACOG bulletin, the process and potential timelines for guideline inclusion, progress with Medicaid opportunities, and confirmation of the Medicaid pilot program target.

Answer

The ACOG bulletin supports risk stratification, which aligns with Sera's strategy. Guideline updates could happen in a normal 2-4 year cycle, be accelerated, or be delayed. The company is excited about Medicaid engagement in states where preterm birth is a priority, as the test can help meet quality metrics and reduce costs. The target of 2-4 Medicaid pilots in the next year was confirmed.

Dan Brennan asked about commercial payer feedback on the new markers, the size of the RA market opportunity, the strategy for volume growth in 2025, and the outlook for operating expense leverage.

Answer

John Aballi stated that payer feedback is positive, with denials mostly related to out-of-network status, which they can appeal effectively. He sized the addressable market at ~2.5 million annual tests and expects volume growth to improve to high single-digits with an expansion of the sales force. Jeff Black added that significant OpEx leverage and scaling are expected in the second half of 2025.

Speaking for Dan Brennan, an analyst from TD Cowen asked for the drivers behind the company's confidence that Hereditary Cancer testing volumes can accelerate to low-double-digit growth, given that recent trends have been closer to mid-single-digits.

Answer

An executive explained that the overall Hereditary Cancer number has been partially dragged down by the BRACAnalysis CDx business, while the core MyRisk test is seeing stronger growth. President and CEO Paul Diaz added that the company has strategically focused on profitable revenue over pure volume, and expects share shifts from recent competitor disruptions to accelerate in 2025, boosting MyRisk adoption.

Representing Dan Brennan, Thomas Stevens asked about the growth outlook for NGS given a modest deceleration, and also inquired about the surprising strength of the base clinical business and the apparent lack of cannibalization.

Answer

CEO Chris Smith and CCO Warren Stone expressed confidence in the NGS runway, citing under-penetration in community oncology and the upcoming PanTracer liquid biopsy launch. Regarding the base business, Warren Stone explained that while some cannibalization occurs, it is more than offset by strong commercial execution, particularly a significantly improved customer retention rate which stabilizes the business.

Asked for an update on the G4X services and instrument funnel, the commercial launch timeline for 2025, the expected timing for first publications, and the key differentiators of the G4X platform against potential competition.

Answer

The company has a deep funnel for both services and early access instruments. The commercial launch is targeted for Q2 2025, following an early access program in late 2024. Publications are expected later in the year. The platform's differentiation comes from a combination of proprietary chemistry optimized for tissue, a fast and flexible instrument design, and a strong IP portfolio.