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BECTON DICKINSON & CO (BDX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $5.51B (+10.4% reported; +8.5% FXN) and adjusted EPS was $3.68 (+5.1% YoY); adjusted gross margin reached 54.8% and adjusted operating margin 25.8% driven by BD Excellence .
  • Results beat Wall Street consensus: EPS $3.68 vs $3.40 and revenue $5.51B vs $5.49B; EBITDA $1.60B vs $1.58B. Bold beat on EPS and modest revenue/EBITDA beats. Values retrieved from S&P Global.*
  • Full-year FY25 adjusted EPS guidance was raised to $14.30–$14.45 (midpoint +$0.18) while organic revenue growth guidance was reaffirmed at 3.0%–3.5% .
  • Catalysts: BD Excellence (highest OTIF levels in 5 years), APM (critical care) strength (+13% pro forma), PureWick double-digit growth, and continued progress toward separating Biosciences & Diagnostic Solutions via Waters combination; management expects to complete the remaining $250M of the $1B buyback by FY25 year-end .

What Went Well and What Went Wrong

What Went Well

  • Margin execution: “BD Excellence lean operating system remains a flywheel… delivering Q3 adjusted gross margin of 54.8%… and $3.68 in adjusted diluted EPS, each exceeded our expectations.”
  • Advanced Patient Monitoring (APM): “APM delivered 13% pro forma growth ahead of our deal model,” driven by strong execution and new product innovation (HemoSphere Alta) .
  • Urology & Critical Care (UCC)/PureWick: Strong double-digit growth; continued adoption of Male and Female portfolios; PureWick Flex at Home ramping .

What Went Wrong

  • Life Sciences softness: BD Life Sciences revenues declined (-0.5% YoY) with DS impacted by point-of-care testing and BACTEC blood culture; BDB impacted by instrument demand in China/Europe despite reagent strength .
  • China and specific pharma subsegments: Ongoing VBP pressure in China and volatility in generic anticoagulants and vaccines within Pharmaceutical Systems; IV fluid shortage impacted MDS volumes .
  • Tariffs weigh on Q4: FY25 tariff impact ~$90M (~2% EPS growth headwind), predominantly in Q4, implying a slight sequential step-down in operating margin due to investment timing and tariffs .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$5.17 $5.27 $5.51
GAAP Diluted EPS ($)$1.04 $1.07 $2.00
Adjusted Diluted EPS ($)$3.43 $3.35 $3.68
Adjusted Gross Margin %54.8% 54.9% 54.8%
Adjusted Operating Margin %23.6% 24.9% 25.8%
Organic Revenue Growth (FXN %)3.9% 0.9% 3.0%

Segment revenues and mix:

Segment Revenue ($USD Billions)Q2 2025Q3 2025YoY change (Q3)
BD Medical$2.76 $2.93 +14.4%
BD Life Sciences$1.25 $1.25 -0.5%
BD Interventional$1.26 $1.33 +7.2%

Geography:

Geography Revenue ($USD Billions)Q3 2025YoY change
United States$3.18 +10.0%
International$2.33 +11.0%

KPIs:

KPIValue
YTD Free Cash Flow (approx.)~$1.7B
Net leverage2.8x
BACTEC utilization (exiting Q3)>80% of historical levels
Share repurchases YTD$750M
Remaining buyback (to complete $1B by FY25 end)$250M
Tariff impact FY25 (EPS growth headwind)~$90M; ~2% to EPS growth; weighted to Q4

Guidance Changes

MetricPeriodPrevious Guidance (May 1, 2025)Current Guidance (Aug 7, 2025)Change
GAAP RevenuesFY 2025~$21.8–$21.9B ~$21.8–$21.9B Maintained
GAAP Revenue GrowthFY 20258.0%–8.5% 8.2%–8.7% Raised
Adjusted Revenue Growth (FXN)FY 20257.8%–8.3% 7.8%–8.3% Maintained
Organic Revenue Growth (FXN)FY 20253.0%–3.5% 3.0%–3.5% Maintained
Adjusted Diluted EPSFY 2025$14.06–$14.34 $14.30–$14.45 Raised
Translational FX impact to revenueFY 2025~($20M) headwind ~+$10M tailwind; EPS about neutral Improved
DividendQuarterly$1.04/share declared (payable Sep 30, 2025) —Confirmed payout cadence

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Technology initiativesQ1: Submitted next BD Alaris 510(k) enabling over-the-air updates; HemoSphere Alta cleared . Q2: Continued connected care focus; pipeline for Pyxis/AI discussed .Limited commercial release of new BD Pyxis Pro with Ancata Enterprise AI; prototypes integrating Alaris and HemoSphere Alta .Expanding deployments and integration
Supply chain/BD ExcellenceQ1: Adjusted GM +370bps; OM +340bps YoY . Q2: GM +190bps; OM +60bps YoY .Highest OTIF in 5 years; >35% waste reduction; OEE up; margin expansion continues .Strengthening execution
Tariffs/MacroQ1: Monitoring tariff/FX; EPS raised despite FX . Q2: ~$90M FY25 tariff impact; Q4-weighted .FY25 ~$90M, ~2% to EPS growth, Q4-weighted; early view of FY26 ~$275M with mitigation improving vs prior view .Visibility improving with mitigation
Product performance (UCC/PureWick)Q1: Double-digit growth . Q2: Strong double-digit growth; Male adoption; Flex ramp .Double-digit UCC growth continues; new mobile PureWick coming .Sustained momentum
Regional trends (China)Q2: Double-digit decrease in China expected in LS; VBP pressure .Continued headwinds in China and certain pharma subsegments; MDS impacted by IV fluid shortage .Persistent headwind
Regulatory/LegalQ1: Onclarity HPV in ASCCP guidelines; self-collection study .Submitted FDA application for at-home Onclarity HPV; Veritor COVID-19 test 510(k) clearance .Regulatory progress
R&D execution (BDB)Q2: FACSDiscover A8 launch planned .FACSDiscover A8 launched with traction; >25 new product launches in BDB pipeline .Pipeline moving to commercialization

Management Commentary

  • “We increased our organic growth trajectory in Q3 while delivering strong margin and EPS growth fueled by BD Excellence, enabling us to raise our EPS guidance and reaffirm organic revenue growth expectations for the full year.” — Tom Polen, CEO
  • “Adjusted gross margin of 54.8%, up 50 bps YoY… adjusted operating margin of 25.8%, up 60 bps YoY… $3.68 in adjusted diluted EPS, each exceeded our expectations.” — Christopher DelOrefice, CFO
  • “APM delivered 13% pro forma growth ahead of our deal model… driven by strong commercial execution, incremental selling investment… and new product innovation including HemoSphere Alta.” — CFO
  • “Customer service levels measured as OTIF reached their highest level in over five years… reducing manufacturing waste by more than 35%… creating capacity to produce an additional 2.5 billion units on the same production lines.” — CEO
  • “We raised our adjusted EPS guidance by $0.18 at the midpoint… EPS guidance continues to include an estimated tariff impact of about $90 million or 2% to EPS growth for the full year, predominantly weighted to Q4.” — CFO

Q&A Highlights

  • Margin phasing: Management flagged a slight sequential step-down in Q4 operating margin due to timing of growth investments and Q4-weighted tariffs; gross margin expected roughly flat YoY despite ~$90M tariffs, underscoring BD Excellence productivity .
  • New BD growth framework: Post-separation RemainCo aims for mid-single-digit-plus growth supported by APM, UCC, PS biologics, and Connected Care deployment; share buybacks expected to be EPS accretive .
  • UCC/PureWick trajectory: No one-time items; strong underlying momentum with Male PureWick scaling faster than Female; innovation roadmap includes mobile/wireless PureWick products .
  • FY26 tariffs: Early view ~ $275M impact, better than previously assumed, with ongoing mitigation (sourcing/location changes, USMCA compliance) to reduce net effects .

Estimates Context

MetricConsensusActualSurprise
Adjusted EPS ($)3.40*3.68 Beat
Revenue ($USD Billions)5.49*5.51 Beat
EBITDA ($USD Billions)1.58*1.60 Beat
EPS # of Estimates11*——
Revenue # of Estimates10*——

Values retrieved from S&P Global.*

Implications: EPS beat driven by margin execution and operating leverage; modest revenue/EBITDA beats reflect UCC/APM strength offsetting LS headwinds. Near-term estimate revisions likely to lift FY25 EPS and margin assumptions, with Q4 investment/tariff phasing considered .

Key Takeaways for Investors

  • Quality of earnings remains strong: BD Excellence is offsetting inflation/tariff headwinds and funding growth investments; margins expanded YoY and operating margin improved QoQ to 25.8% .
  • Portfolio catalysts: APM integration/innovation, Pyxis Pro + Ancata AI, PureWick expansion, PS biologics (GLP-1 exposure) underpin an improving sequential growth trajectory .
  • Guidance risk skew: EPS raised; organic growth reaffirmed. Watch Q4 tariffs (~$90M) and incremental selling/marketing investment pacing, implying modest QoQ margin step-down .
  • Life Sciences recovery path: Instrument demand remains soft in China/Europe; BACTEC utilization >80% and MAX IVD double-digit growth suggest DS recovery into Q4, supporting FY25 LS trajectory .
  • Capital deployment: Remaining $250M buyback to finish by FY25 end; dividend cadence remains intact ($1.04 payable Sep 30) .
  • Strategic separation: Transaction with Waters to combine BDB/DS progressing; management positioning “New BD” as a pure-play medtech with high recurring revenue, margin expansion and focused capital allocation .
  • Trading setup: EPS/margin beats and raised guidance are near-term positives; monitor tariff evolution, China VBP, and LS demand normalization for sustained estimate momentum .