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METTLER TOLEDO INTERNATIONAL INC/ (MTD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered revenue of $983.2M (+4% y/y; +2% in local currency) and adjusted diluted EPS of $10.09 (+5% y/y), outperforming Wall Street consensus on both revenue and EPS . Consensus EPS was $9.60* and revenue $958.2M*, implying an EPS beat of ~5% and revenue beat of ~2.6%* (S&P Global) .
  • Gross margin contracted 70 bps y/y to 59.0% and adjusted operating margin fell 120 bps y/y to 28.8%, with management citing tariff costs as the principal headwind, partially offset by pricing and productivity actions .
  • Guidance: Q3 2025 LC sales +3–4%, adjusted EPS $10.55–$10.75 with a ~5% gross tariff headwind largely mitigated; FY 2025 adjusted EPS raised to $42.10–$42.60, then reduced by ~$0.40 to $41.70–$42.20 following a new U.S. 39% tariff on Swiss imports announced after the press release .
  • Catalyst: Tariff trajectory and mitigation pace (pricing/surcharges, supply chain optimization) plus continued strength in Product Inspection (mid-to-high single-digit growth outlook) and automation/digitalization demand in Industrial .

What Went Well and What Went Wrong

What Went Well

  • Broad-based growth with reported sales +4% y/y; adjusted EPS +5% y/y; Americas +3% LC, Asia/ROW +3% LC; Product Inspection +8% LC; core industrial +2% LC, showing resilience amid uncertainty .
  • “We continue to benefit from our innovative product portfolio and strategic programs,” with management highlighting strong execution and tariff mitigation progress; adjusted EPS grew despite headwinds .
  • Product Inspection momentum: mid-to-high single-digit growth outlook for Q3 and FY, driven by new mid-range offerings and upgrades in food manufacturing; share gains cited .

What Went Wrong

  • Margin pressure: gross margin down 70 bps y/y; adjusted operating margin down 120 bps y/y; management estimates tariffs reduced operating margin by ~130 bps in Q2 .
  • Reported EPS down y/y to $9.76 due to a prior-year $1.07 discrete tax benefit; tax rate at 19% before discrete items .
  • Europe flat in local currency; China declined 2% LC in Q2; service growth moderated to 4% in Q2 due to project timing, though FY service outlook remains positive .

Financial Results

Core P&L vs prior periods and estimates

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$946.8 $883.7 $983.2
GAAP Diluted EPS ($)$10.37 $7.81 $9.76
Adjusted Diluted EPS ($)$9.65 $8.19 $10.09
Gross Margin %59.7% 59.5% 59.0%
Adjusted Operating Margin %30.0% 26.8% 28.8%
Net Income Margin %23.4% 19.2% 20.6%

Q2 2025 vs Wall Street consensus (S&P Global)

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)958.2*983.2 +2.6%*
Adjusted Diluted EPS ($)9.60*10.09 +5.1%*
EBITDA ($USD Millions)285.0*288.8*+1.3%*
Values with asterisk retrieved from S&P Global.

Regional sales growth (Q2 2025)

RegionUSD GrowthLocal Currency Growth
Americas+2% +3%
Europe+6% 0%
Asia/Rest of World+4% +3%
China (LC)—(2%)

Product area growth (Q2 2025, LC)

SegmentLC Growth
Laboratory+1%
Core Industrial+2%
Product Inspection+8%
Food RetailFlat

KPIs

KPIQ2 2025YTD 2025
Adjusted Free Cash Flow ($USD Millions)$228.97 $408.73
Net Cash from Operations ($USD Millions)$236.37 $430.82
DSO (days)35 —
ITO (turns)4.2x —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Local Currency Sales GrowthQ3 2025—~+3% to +4% New
Adjusted EPS ($)Q3 2025—$10.55–$10.75; ~5% gross tariff headwind largely mitigated New
Local Currency Sales GrowthFY 2025~+1% to +2% ~+1% to +2% (unchanged) Maintained
Adjusted EPS ($)FY 2025$41.25–$42.00 $42.10–$42.60 (raised) Raised
Adjusted EPS ($)FY 2025$42.10–$42.60 $41.70–$42.20 if Swiss tariff 39% persists Lowered ~$0.40
Gross Tariff Cost (annualized)FY 2025~$115M (May est.) ~$60M pre-order; ~$(95)M post Swiss tariff update Updated
Operating Margin (adj.)FY 2025Down ~130 bps; up slightly ex tariffs/shipping Down modestly ex tariffs/shipping Slightly better
Tax Rate (pre-discrete)FY 202519% 19% Maintained
Purchased Intangible Amortization ($)FY 2025$25M pre-tax ($0.93/sh) $25M pre-tax ($0.95/sh); total amortization ~$73M Slightly higher total
Interest Expense ($)FY 2025~$72M ~$68M Lowered
Other Income ($)FY 2025~$9M ~$11M Raised
Free Cash Flow ($)FY 2025~$860M ~$860M Maintained
Share Repurchases ($)FY 2025~$875M ~$875M Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025Trend
Tariffs & MitigationNot a focus; strong finish to year ~$115M gross tariff headwind; 2025 net ~2% EPS headwind; full offset next year Swiss tariff at 39% adds ~$0.40 EPS headwind; incremental global tariff ~$95M; full offset expected next year Elevated, mitigation accelerating
Automation/DigitalizationInstrument demand in Europe strong Industrial softness but automation solutions emphasized Industrial pipeline stronger; automation/digitalization demand noted; Q3 Industrial mid-to-high single-digit guide Improving
Product Inspection—+8% LC; mid single-digit FY outlook Strong performance; mid-to-high single-digit outlook Q3/FY Strengthening
Bioprocessing/Process Analytics—Strong single-use recovery; PA growth Continued strength in bioprocessing; single-use innovations Sustained
Replacement Cycle—Early signs; caution from tariffs; pent-up demand Aging installed base; no snapback; gradual acceleration as certainty returns Building
Regional TrendsEurope very strong in Q4 China cautious; Americas flattish; Europe up low single-digit China flat outlook; Americas mid-single-digit; Europe low single-digit in Q3 Mixed/stabilizing
Service—+6% LC; mid-to-high single-digit FY outlook +4% in Q2; timing issues; YTD +5% Healthy

Management Commentary

  • “We are pleased with our second quarter and experienced growth throughout most of our businesses despite challenging market conditions... which resulted in solid EPS growth in the quarter.” — Patrick Kaltenbach .
  • “If the tariffs stay at 39% on Switzerland, this would negatively impact yesterday's EPS guidance for this year by approximately $0.40. We will continue to implement mitigating actions to fully offset tariffs next year.” — Patrick Kaltenbach .
  • “Gross impact of tariffs reduced our operating margin by approximately 130 basis points... Adjusted EPS for the quarter was $10.09, a 5% increase.” — Shawn Vadala .
  • “Our proactive tariff mitigation efforts will allow us to meaningfully offset incremental costs this year while also increasing the resiliency in our global supply chain.” — Patrick Kaltenbach .

Q&A Highlights

  • Tariff shock: Post-call update puts Swiss tariff at 39%, reducing FY adjusted EPS by ~$0.40 to $41.70–$42.20; limited impact in Q3 due to inventory, larger impact in Q4; full mitigation targeted for 2026 .
  • Segment guidance: Q3 Laboratory low-single-digit; Core Industrial and Product Inspection mid-to-high single-digit; Retail down low-single-digit; Americas mid-single-digit, Europe low-single-digit, China flat .
  • Pricing as lever: Q2 realized ~3%; H2 ~3.5%; FY ~3% pricing with surcharges flexing to tariff dynamics .
  • Margin cadence: Q4 adjusted operating margin expected down ~170–180 bps y/y given higher tariff costs and volume seasonality .
  • Services timing: Q2 softer on project timing; confidence in second-half rebound; YTD service +5% .

Estimates Context

  • Q2 results vs consensus: Revenue $983.2M vs $958.2M*; adjusted EPS $10.09 vs $9.60*; EBITDA ~$288.8M* vs ~$285.0M*, all beats* (S&P Global) .
  • FY 2025 consensus EPS at $42.20* broadly aligns with the updated guidance range $41.70–$42.20 following Swiss tariff; prior raised range $42.10–$42.60 likely prompts modest downwards adjustments to reflect Swiss tariff impact* (S&P Global) .
    Values with asterisk retrieved from S&P Global.

Q2 2025 Consensus vs Actual (S&P Global)

MetricConsensusActual
Primary EPS ($)9.60*10.09
Revenue ($USD Millions)958.2*983.2
EBITDA ($USD Millions)285.0*288.8*
Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Strong beat and above-street Q3 guidance should support near-term sentiment; watch for tariff headlines and pace of mitigation actions (pricing/surcharges, supply chain shifts) .
  • Margin headwinds from tariffs (~130 bps in Q2) are being actively offset; Q4 margins likely pressured y/y before broader mitigation benefits flow in 2026 .
  • Product Inspection momentum and Industrial automation/digitalization demand provide cyclical ballast; Q3 mid-to-high single-digit segment growth targets are constructive .
  • China remains cautious but stable; Americas stronger; Europe mixed—position sizing should reflect regional variability and tariff sensitivity in Swiss-exposed product lines .
  • Cash generation remains robust (YTD adjusted FCF ~$409M); FY FCF guide $860M supports ongoing buybacks ($875M) and offsets macro uncertainty .
  • Modeling updates: incorporate updated FY EPS range ($41.70–$42.20), 19% tax rate, ~$68M interest expense, ~$11M other income, and pricing realization ~3% for FY .
  • Trading lens: Stock likely reacts to clarity on Swiss tariffs, mitigation progress, and continued PI/Industrial performance; near-term dips on tariff risk may be opportunities given 2026 mitigation confidence .