Executive Summary

Q4 revenue of $5.90B grew 8.3% reported and 3.9% organic; adjusted EPS was $3.96. The quarter featured robust margin execution and strength in BD Interventional and Advanced Patient Monitoring, partially offset by vaccine-related softness in Pharma Systems and subdued research funding in Biosciences .
Versus consensus, adjusted EPS beat and revenue was modestly below; FY26 guidance introduced: adjusted EPS $14.75-$15.05, “low single-digit plus” GAAP revenue growth, and “low single-digit” FXN growth, with Q1 FY26 adjusted EPS guided to $2.75-$2.85 .
Management highlighted transitory headwinds (China VBP, vaccine demand, Alaris comp) and a clear plan: a $200M two‑year cost-out, sales force expansion (~15% in PI/APM), and focused R&D reallocations to higher-growth, higher-margin opportunities (PureWick, tissue regeneration, connected care) .
Strategic catalysts: Waters RMT combination (Biosciences + Diagnostic Solutions) targeted around end of Q1 CY26; share repurchases ($250M near term, at least half of ~$4B RMT proceeds for buybacks post-close), and 54th consecutive annual dividend increase to $1.05 per quarter ($4.20 annual) .

What Went Well and What Went Wrong

What Went Well
- BD Interventional delivered high-single-digit growth; UCC saw strong double-digit PureWick growth, Surgery benefited from Advanced Tissue Regeneration momentum, and PI continued double-digit Rotarex growth .
- “We delivered adjusted diluted EPS of $3.96 for Q4 and a record $14.40 for the full year,” driven by BD Excellence with adjusted gross margin up 140 bps and adjusted operating margin up 80 bps for FY25 .
- MMS had a record quarter for Alaris capital installations; APM outperformed the deal model with double-digit pro forma growth; biologics in Pharma Systems grew high-single digits (GLP‑1s) .
What Went Wrong
- Vaccines (≈20% of Pharma Systems) declined more than anticipated late in the quarter, compressing PS growth despite strong biologics demand .
- Biosciences remained pressured by subdued research funding; instruments softness offset mid-single-digit reagents/service growth; DS only recently returned to positive growth as BACTEC utilization recovered to >85% of historical U.S. levels .
- China mid-teens decline expected in FY26 as VBP reaches ~80% portfolio coverage; Alaris remediation creates a >100 bps headwind to FY26 growth versus the record FY25 install base .

Financial Results

Quarter snapshot vs prior year and consensus

Metric	Q4 2024	Q4 2025	YoY Change	Consensus*	Surprise
Revenue ($USD Billions)	$5.44	$5.90	+8.3%	$5.909*	-$0.019B*
Reported Diluted EPS ($)	$1.38	$1.72	+24.6%	N/A	N/A
Adjusted Diluted EPS ($)	$3.81	$3.96	+3.9%	$3.915*	+$0.045*

Trends vs prior quarters

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD Billions)	$5.27	$5.50	$5.90
Adjusted Diluted EPS ($)	$3.35	$3.68	$3.96
Adjusted Gross Margin %	54.9%	54.8%	54.2%
Adjusted Operating Margin %	24.9%	25.8%	25.8%

Segment breakdown – Q4 2025

Segment	Revenue ($USD Billions)	Reported YoY	FXN YoY	Organic YoY
BD Medical	$3.155	+11.2%	+9.9%	+4.0%
BD Life Sciences	$1.368	+2.1%	+0.3%	+0.3%
BD Interventional	$1.367	+8.5%	+7.5%	+7.5%
Total	$5.890	+8.3%	+7.0%	+3.9%

Geography – Q4 2025

Region	Revenue ($USD Billions)	Reported YoY	FXN YoY
United States	$3.422	+9.8%	+9.8%
International	$2.468	+6.4%	+3.2%
Total	$5.890	+8.3%	+7.0%

KPIs

KPI	Period	Value
Adjusted Gross Margin %	Q4 2025	54.2%
Adjusted Operating Margin %	Q4 2025	25.8%
Free Cash Flow	FY25	$2.7B
Net Leverage	FY25 End	2.8x
Returned to Shareholders	FY25	$2.2B (dividends + buybacks)
BACTEC Utilization (U.S.)	Q4 2025 Exit	>85% of historical levels

Non-GAAP context: Adjusted EPS excludes purchase accounting, integration/restructuring, transaction/financing, separation-related, regulatory costs, product/legal and other items, and tax impacts; Q4 specific itemization includes $232M product/legal charges and pension settlement costs; detailed reconciliation provided in Exhibit 99.1 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
GAAP Revenue Growth	FY26	N/A	Low single-digit plus	Initiated
Revenue Growth (FXN)	FY26	N/A	Low single-digit	Initiated
Adjusted Diluted EPS	FY26	N/A	$14.75–$15.05	Initiated
Adjusted Operating Margin	FY26	~25% (FY25 actual)	~25% (consistent)	Maintained
Adjusted Effective Tax Rate	FY26	N/A	14%–15%	Initiated
Tariff Headwind (Incremental YoY)	FY26	N/A	~$185M (~80 bps OM headwind)	Initiated
Q1 FY26 Adjusted EPS	Q1 FY26	N/A	$2.75–$2.85	Initiated
Dividend	FY26	53rd annual increase prior year	$1.05/quarter; $4.20 annual; +1.0%	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q4 2025)	Trend
AI/Connected Care	Laid groundwork for Pyxis Pro, Alaris updates; BD Excellence expanding to R&D/commercial	Pyxis Pro limited release; Encada AI platform coming; APM connectivity initiatives	Launch of BD Incada/Encada platform and next-gen Pyxis Pro; 510(k) for HemoSphere Stream	Building momentum
Supply chain/tariffs	FY25 tariff impact ~$90M; mitigation actions outlined	FY26 tariff outlook improved to ~$275M; BD Excellence offsets	FY26 incremental tariff headwind ~$185M; margins maintained ~25%	Managed headwind
Product performance	PureWick double-digit growth; Phasix launches; APM strong	UCC +12%; Phasix adoption; APM +13% pro forma; MMS competitive wins	PureWick growth, ROTAREX double-digit; Alaris record installs; APM leads	Strong core, expanding
Regional trends (China)	Double-digit decline expected	Ongoing VBP pressure	Mid-teens decline FY26; VBP ~80% by FY26 end	Persistent pressure
Regulatory/legal	ACC/EtCO2 clearance; export licensing for flow cytometers	Waters RMT progressing; FTC clearance later noted	Product/legal charges in Q4; Waters RMT on track end Q1 CY26	Transition year
R&D execution	FACSDiscover A8 launch planned; CentroVena One FDA clearance	FACSDiscover A8 traction; single-cell multiomics pipeline	DS HPV self-collection, BD COR robotics; life sciences innovation cycle	Continuing

Management Commentary

“New BD will be a pure-play med tech company with a deep innovation pipeline in attractive markets and a best-in-class consumables revenue profile of over 90%.”
“We initiated a two-year $200 million cost-out program… while identifying cost optimization opportunities to reinforce our commitment to long-term profitable growth.”
“We expect China to decline in the mid-teens… our assumptions include China VBP reaching 80% coverage of our portfolio by the end of FY26.”
“MMS had a record quarter for Alaris pump installations… solidifying our leadership position now and for years to come as we complete our fleet upgrade in fiscal 2026.”
“We plan to execute another $250 million share buyback this quarter, in addition to using at least half of the $4 billion in cash proceeds from the Waters transaction… with the balance for debt repayment.”

Q&A Highlights

Capital allocation: BD views its intrinsic value as materially higher; immediate $250M buyback and ≥50% of ~$4B Waters proceeds to repurchases; management underscores EPS growth profile improving >200 bps post-spin .
China outlook: High-single-digit decline in Q4 and mid-teens decline guided for FY26 as VBP expands; post-separation, China will be ~4% of revenue, easing base effects .
Alaris trajectory: FY26 growth headwind >100 bps from lapping record installs; modeling guide—after FY26 remediation completion, sequential ~200 bps headwind then normalization with replacement cycle tailwinds into 2030s .
Margin durability: BD Excellence continues to drive gross margin expansion and offset tariffs; FY26 OM ~25% despite ~80 bps tariff headwind .
Commercial/R&D acceleration: CRO role created; ~15% sales force increases in PI and APM; ~$50M corporate costs reallocated to R&D in high-growth adjacencies (PureWick, tissue regeneration, connected care, biologics delivery) .

Estimates Context

Q4 2025: Adjusted EPS actual $3.96 vs consensus Primary EPS $3.915* (beat); revenue actual $5.90B vs consensus $5.909B* (slight miss).
Recap of recent quarters:
- Q3 2025: Adjusted EPS $3.68 vs $3.402* (beat); revenue $5.50B vs $5.487B* (beat) .
- Q2 2025: Adjusted EPS $3.35 vs $3.281* (beat); revenue $5.27B vs $5.352B* (miss) .
- Q1 2025: Adjusted EPS $3.43 vs $2.989* (beat); revenue $5.17B vs $5.109B* (beat).

Values marked with an asterisk (*) were retrieved from S&P Global.

Key Takeaways for Investors

The core portfolio (≈90%) is growing mid-single digits with strong margin discipline; transitory headwinds (vaccines, China VBP, Alaris comp) are sized and embedded in FY26 guidance .
BD Excellence is structurally improving gross margin and offsetting tariff pressures; FY26 OM ~25% despite ~80 bps tariff headwind suggests resilient earnings power .
Strategic actions (CRO, sales force expansion, $200M cost-out, $50M R&D reallocation) should accelerate growth in higher-margin franchises (PureWick, APM, tissue regeneration, connected care) .
Capital returns are set to intensify: immediate $250M buyback, ≥50% of ~$4B Waters proceeds to repurchases, and dividend raised for the 54th consecutive year—supporting EPS compounding .
Near-term trading: Q1 FY26 revenue/adjusted EPS step down is guided; watch China VBP, vaccine order patterns, and Alaris remediation phasing—Q2/Q3 are expected to be stronger quarters .
Medium-term thesis: New BD as a focused med tech leader with best-in-class consumables profile, margin expansion runway, improving FCF conversion, and accretive capital allocation post-RMT .

Appendix: Additional Relevant Press Releases

Dividend increase to $1.05/quarter (54th consecutive year); indicated annual dividend $4.20 .
PureWick Portable Collection System launch expands into wheelchair/at‑home mobility use cases; compatibility across male/female external catheters .
FY25 press release confirms Q4 results, segment/geography breakdowns, and FY26 guidance .

BECTON DICKINSON & CO (BDX)·Q4 2025 Earnings Summary