Bruker Corporation
08/06/2025 | Press release | Distributed by Public on 08/06/2025 04:03
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and the notes to those statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q, and in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024. The dollar amounts listed in the tables presented in Management's Discussion and Analysis of Financial Condition and Results of Operations are in millions of U.S. Dollars.
Any statements other than statements of historical fact contained in Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Without limiting the foregoing, the words "believe," "anticipate," "plan," "expect," "seek," "may," "will," "intend," "estimate," "should" and similar expressions are intended to identify forward-looking statements.
Forward-looking statements include, but are not limited to, statements regarding:
•
the impact of supply chain challenges on our business and operations;
•
our working capital requirements and the sufficiency of our cash, borrowings, and proceeds of indebtedness to fund our operations and investment activities;
•
our plans to make capital investments;
•
the impact of changes to tax and accounting rules, and changes in law, including the One Big Beautiful Bill Act (the "Act");
•
fluctuations in estimates impacting costs related to our self-funded health insurance plan;
•
our expectations regarding backlog and revenue;
•
our expectations and the impact of our restructuring initiatives or success of our acquisitions;
•
the impact of our global IT transformation activities;
•
the impact of foreign currency exchange rates and changes in commodity prices; and
•
any other statements that address events or developments that the Company intends or believes will or may occur in the future.
Actual results may differ from those referred to in any forward-looking statements due to a number of factors, including, but not limited to, the risks described in Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 and in this Quarterly Report on Form 10-Q. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.
We can experience quarter-to-quarter fluctuations in our operating results as a result of various factors, some of which are outside our control, such as:
•
general economic conditions, including inflation, the threat of recession, financial liquidity, currency volatility or devaluation, supply chain or manufacturing capabilities, uncertain economic conditions in the United States and abroad, and additional tariffs, including those imposed or that may be imposed by the presidential administration in the U.S;
•
geopolitical tensions, including those on our customers, such as the conflict between Russia and Ukraine and related economic sanctions, the conflict in the Middle East and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences, the ongoing tensions between the United States and China, tariff and trade policy changes, and increasing potential of conflict involving countries in Asia that are significant to the Company's supply chain operations, such as Taiwan and China;
•
the impact of potential governmental investigations involving regulatory, marketing, and other business practices, which may result in the commencement of civil and criminal proceedings, fines, penalties, and administrative remedies;
•
potential energy shortages in Europe where the Company has significant operations;
•
the impacts of climate change and certain weather-related disruptions;
•
the timing of governmental stimulus programs and academic research budgets;
•
the time it takes between the date customer orders and deposits are received, systems are shipped and accepted by our customers, and full payment is received;
•
foreign currency exchange rates;
•
the worldwide shortage of semiconductor chips, components, and raw materials, such as copper;
•
changes in raw material, component, and logistics costs;
•
the time it takes for us to receive critical materials to manufacture our products;
•
the time it takes to satisfy local customs requirements and other export/import requirements;
•
the time it takes for customers to construct or prepare their facilities for our products;
•
the time required to obtain governmental licenses;
•
our ability to identify suitable acquisition targets and successfully integrate and manage acquired business; and
•
costs related to acquisitions of technology or businesses.
Several of these factors have in the past affected and may continue to affect the amount and timing of revenue recognized on sales of our products and receipt of related payments, and will likely continue to do so in the future. Accordingly, our operating results in any particular quarter may not necessarily be an indication of any future quarter's operating performance.
OVERVIEW
We are a developer, manufacturer, and distributor of high-performance scientific instruments and analytical and diagnostic solutions that enable our customers to explore life and materials at microscopic, molecular, and cellular levels. Our corporate headquarters are located in Billerica, Massachusetts. We maintain major research and development and manufacturing centers in Europe, Asia and North America, and we have commercial offices located throughout the world. Bruker is organized into four reportable segments: the Bruker Scientific Instruments (BSI) BioSpin Segment, the BSI CALID Segment, the BSI NANO Segment, and the Bruker Energy & Supercon Technologies (BEST) Segment.
Consolidated Results
The following table presents a summary of our consolidated results as of the three and six months ended June 30, 2025 and 2024:
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
GAAP Financial Measures: |
|||||||||||||||
|
Revenue |
$ |
797.4 |
$ |
800.7 |
$ |
1,598.8 |
$ |
1,522.4 |
|||||||
|
Revenue year-on-year Growth Rate |
(0.4 |
)% |
17.4 |
% |
5.0 |
% |
11.4 |
% |
|||||||
|
Gross Profit |
$ |
357.9 |
$ |
384.6 |
$ |
749.1 |
$ |
737.4 |
|||||||
|
Gross Profit Margin |
44.9 |
% |
48.0 |
% |
46.9 |
% |
48.4 |
% |
|||||||
|
Operating Income |
$ |
11.9 |
$ |
48.1 |
$ |
43.7 |
$ |
112.9 |
|||||||
|
Operating Income Margin |
1.5 |
% |
6.0 |
% |
2.7 |
% |
7.4 |
% |
|||||||
|
Net cash provided by (used by) operating activities |
$ |
(127.5 |
) |
$ |
1.1 |
$ |
(62.5 |
) |
$ |
22.9 |
|||||
|
Non-GAAP Financial Measures (see 'Non-GAAP Measures' below): |
|||||||||||||||
|
Non-GAAP Constant-exchange rate (CER) currency revenue |
$ |
774.0 |
$ |
808.1 |
$ |
1,585.8 |
$ |
1,530.8 |
|||||||
|
Non-GAAP Constant-exchange rate (CER) currency revenue year-on-year growth rate |
(3.3 |
)% |
18.5 |
% |
4.2 |
% |
12.0 |
% |
|||||||
|
Non-GAAP Organic Revenue |
$ |
744.4 |
$ |
732.6 |
$ |
1,487.0 |
$ |
1,429.0 |
|||||||
|
Non-GAAP Organic Revenue year-on-year growth rate |
(7.0 |
)% |
7.4 |
% |
(2.3 |
)% |
4.5 |
% |
|||||||
|
Non-GAAP Gross Profit |
$ |
387.2 |
$ |
411.1 |
$ |
798.1 |
$ |
780.5 |
|||||||
|
Non-GAAP Gross Profit Margin |
48.6 |
% |
51.3 |
% |
49.9 |
% |
51.3 |
% |
|||||||
|
Non-GAAP Operating Income |
$ |
72.0 |
$ |
110.7 |
$ |
173.7 |
$ |
211.4 |
|||||||
|
Non-GAAP Operating Income Margin |
9.0 |
% |
13.8 |
% |
10.9 |
% |
13.9 |
% |
|||||||
|
Non-GAAP Free Cash Flow |
$ |
(148.8 |
) |
$ |
(23.5 |
) |
$ |
(109.8 |
) |
$ |
(23.1 |
) |
|||
Discussion of GAAP financial measures follows in the Results of Operations paragraphs.
Non-GAAP Financial Measures
Uses and definitions:
Although our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue excluding the effects of foreign currency, and expenses excluding costs related to restructuring actions, acquisitions, and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology, transition initiatives, and other costs ("non-GAAP adjustments"), provides meaningful supplemental information regarding our performance but should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. We rely internally on certain measures that are not calculated according to GAAP. These measures include constant exchange rate ("CER") currency revenue growth, organic revenue growth, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating margin, and free cash flow.
Our management believes that these financial measures provide relevant and useful information that is widely used by equity analysts, investors, and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance and are useful measures to evaluate our continuing business. Additionally, management believes free cash flow is a useful measure to evaluate our business as it indicates the amount of cash generated after additions to property, plant, and equipment which is available for, among other things, investments in our business, acquisitions, share repurchases, dividends, and repayment of debt.
We regularly use these non-GAAP financial measures internally to understand, manage, and evaluate our business results and make operating decisions. We also measure our employees and compensate them, in part, based on such non-GAAP measures and use this information for our planning and forecasting activities. These measures may also be useful to investors in evaluating the underlying operating performance of our business. The presentation of these non-GAAP financial measures is not intended to be a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and it may be different from non-GAAP financial measures used by other companies, and therefore, may not be comparable among companies.
We define our non-GAAP financial measures as follows:
•
CER currency revenue growth as GAAP revenue excluding the effect of changes in foreign currency translation rates.
•
Organic revenue growth as GAAP revenue excluding the effect of changes in foreign currency translation rates and acquisitions.
•
Non-GAAP gross profit as GAAP gross profit excluding certain non-GAAP adjustments.
•
Non-GAAP gross profit margin as GAAP gross profit margin excluding the impact of certain non-GAAP adjustments.
•
Non-GAAP operating income as GAAP operating income excluding non-GAAP adjustments.
•
Non-GAAP operating income margin as GAAP operating income margin excluding the impact of non-GAAP adjustments.
•
Free cash flow as GAAP net cash provided by operating activities less additions to property, plant, and equipment.
Reconciliations of GAAP to Non-GAAP financial measures:
GAAP revenue to non-GAAP CER currency revenue:
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
GAAP revenue |
$ |
797.4 |
$ |
800.7 |
$ |
1,598.8 |
$ |
1,522.4 |
|||||||
|
Effect of changes in foreign currency translation rates |
23.4 |
(7.4 |
) |
13.0 |
(8.4 |
) |
|||||||||
|
Non-GAAP CER currency revenue |
$ |
774.0 |
$ |
808.1 |
$ |
1,585.8 |
$ |
1,530.8 |
|||||||
|
GAAP Revenue growth rate |
(0.4 |
)% |
17.4 |
% |
5.0 |
% |
11.4 |
% |
|||||||
|
Non-GAAP CER currency revenue growth rate |
(3.3 |
)% |
18.5 |
% |
4.2 |
% |
12.0 |
% |
|||||||
The non-GAAP CER revenue decline in the three months ended June 30, 2025, compared to the year ago quarter, was driven primarily by slower demand in pharma and industrial markets for our life science instruments partially offset by higher revenue from prior year acquisitions. The increase in non-GAAP CER in the six months ended June 30, 2025, compared to the year ago period, reflects increased revenue from prior year acquisitions offset by reduced revenue from the weakened biopharma research markets.
GAAP revenue to non-GAAP Organic revenue:
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
GAAP revenue |
$ |
797.4 |
$ |
800.7 |
$ |
1,598.8 |
$ |
1,522.4 |
|||||||
|
Non-GAAP adjustments: |
|||||||||||||||
|
Acquisitions and divestitures |
29.6 |
75.5 |
98.8 |
101.8 |
|||||||||||
|
Effect of changes in foreign currency translation rates |
23.4 |
(7.4 |
) |
13.0 |
(8.4 |
) |
|||||||||
|
Non-GAAP Organic revenue |
$ |
744.4 |
$ |
732.6 |
$ |
1,487.0 |
$ |
1,429.0 |
|||||||
|
GAAP Revenue growth rate |
(0.4 |
)% |
17.4 |
% |
5.0 |
% |
11.4 |
% |
|||||||
|
Non-GAAP Organic revenue growth rate |
(7.0 |
)% |
7.4 |
% |
(2.3 |
)% |
4.5 |
% |
|||||||
The non-GAAP organic revenue decline in the three months and six months ended June 30, 2025, compared to the year-ago periods, was primarily a result of similar drivers to those described above under GAAP revenue to non-GAAP CER currency revenue.
GAAP Gross Profit to non-GAAP Gross Profit:
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||
|
2025 |
2024 |
2025 |
2024 |
|||||||||||||||||||||||||||||
|
Gross profit |
$ |
357.9 |
44.9 |
% |
$ |
384.6 |
48.0 |
% |
$ |
749.1 |
46.9 |
% |
$ |
737.4 |
48.4 |
% |
||||||||||||||||
|
Non-GAAP adjustments: |
||||||||||||||||||||||||||||||||
|
Restructuring costs |
4.4 |
0.6 |
% |
4.9 |
0.6 |
% |
7.0 |
0.4 |
% |
8.6 |
0.6 |
% |
||||||||||||||||||||
|
Acquisition-related costs |
2.8 |
0.4 |
% |
8.7 |
1.1 |
% |
5.1 |
0.3 |
% |
11.7 |
0.8 |
% |
||||||||||||||||||||
|
Purchased intangible amortization |
15.0 |
1.9 |
% |
12.0 |
1.5 |
% |
29.0 |
1.8 |
% |
19.8 |
1.3 |
% |
||||||||||||||||||||
|
Other costs |
7.1 |
0.8 |
% |
0.9 |
0.1 |
% |
7.9 |
0.5 |
% |
3.0 |
0.2 |
% |
||||||||||||||||||||
|
Non-GAAP gross profit |
$ |
387.2 |
48.6 |
% |
$ |
411.1 |
51.3 |
% |
$ |
798.1 |
49.9 |
% |
$ |
780.5 |
51.3 |
% |
||||||||||||||||
The decrease in Non-GAAP gross profit margin in the three months and six months ended June 30, 2025, compared to the year-ago periods, was driven by decline of revenue primarily as result of slower demand in pharma and industrial markets, combined with an increase in cost of goods sold due to higher U.S. tariffs and foreign exchange headwinds from a declining U.S. dollar.
GAAP Operating income to non-GAAP Operating income:
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||
|
2025 |
2024 |
2025 |
2024 |
|||||||||||||||||||||||||||||
|
Operating income |
$ |
11.9 |
1.5 |
% |
$ |
48.1 |
6.0 |
% |
$ |
43.7 |
2.7 |
% |
$ |
112.9 |
7.4 |
% |
||||||||||||||||
|
Non-GAAP adjustments: |
||||||||||||||||||||||||||||||||
|
Restructuring costs |
7.3 |
0.9 |
% |
6.1 |
0.8 |
% |
17.5 |
1.1 |
% |
13.3 |
0.9 |
% |
||||||||||||||||||||
|
Acquisition-related costs |
5.5 |
0.7 |
% |
26.0 |
3.2 |
% |
14.1 |
0.9 |
% |
33.1 |
2.2 |
% |
||||||||||||||||||||
|
Purchased intangible amortization |
31.5 |
4.0 |
% |
25.1 |
3.1 |
% |
58.8 |
3.7 |
% |
41.3 |
2.7 |
% |
||||||||||||||||||||
|
Acquisition-related litigation charges |
4.0 |
0.5 |
% |
1.4 |
0.2 |
% |
22.6 |
1.4 |
% |
1.5 |
0.1 |
% |
||||||||||||||||||||
|
Other costs |
11.8 |
1.4 |
% |
4.0 |
0.5 |
% |
17.0 |
1.1 |
% |
9.3 |
0.6 |
% |
||||||||||||||||||||
|
Non-GAAP operating income |
$ |
72.0 |
9.0 |
% |
$ |
110.7 |
13.8 |
% |
$ |
173.7 |
10.9 |
% |
$ |
211.4 |
13.9 |
% |
||||||||||||||||
The decrease in our non-GAAP operating margin in the three and six months ended June 30, 2025, compared to the year-ago periods, was driven primarily by lower non-GAAP gross profit, the impact of foreign currency translation, and the impact of prior period acquisitions.
GAAP Net operating cash flow to non-GAAP Free cash flow:
|
Six Months Ended |
||||||||
|
2025 |
2024 |
|||||||
|
GAAP net cash provided by (used in) operating activities |
$ |
(62.5 |
) |
$ |
22.9 |
|||
|
Less: purchases of property, plant and equipment |
(47.3 |
) |
(46.0 |
) |
||||
|
Free cash flow |
$ |
(109.8 |
) |
$ |
(23.1 |
) |
||
For the six months ended June 30, 2025, our free cash flow decreased by $86.7 million compared to the same period in 2024, primarily due to lower net income and an increase in tax payments in the first half of 2025.
RESULTS OF OPERATIONS
Three Months Ended June 30, 2025, compared to the Three Months Ended June 30, 2024
Consolidated Results
The following table presents our results for the periods reported:
|
Three Months Ended |
||||||||||||||||
|
2025 |
2024 |
Dollar |
Percentage |
|||||||||||||
|
Product revenue |
$ |
634.7 |
$ |
654.4 |
$ |
(19.7 |
) |
(3.0 |
)% |
|||||||
|
Service and other revenue |
162.7 |
146.3 |
16.4 |
11.2 |
% |
|||||||||||
|
Total revenue |
797.4 |
800.7 |
(3.3 |
) |
(0.4 |
)% |
||||||||||
|
Cost of product revenue |
346.1 |
326.0 |
20.1 |
6.2 |
% |
|||||||||||
|
Cost of service and other revenue |
93.4 |
90.1 |
3.3 |
3.7 |
% |
|||||||||||
|
Total cost of revenue |
439.5 |
416.1 |
23.4 |
5.6 |
% |
|||||||||||
|
Gross profit |
357.9 |
384.6 |
(26.7 |
) |
(6.9 |
)% |
||||||||||
|
Operating expenses: |
||||||||||||||||
|
Selling, general and administrative |
231.4 |
221.3 |
10.1 |
4.6 |
% |
|||||||||||
|
Research and development |
100.2 |
92.2 |
8.0 |
8.7 |
% |
|||||||||||
|
Other charges, net |
14.4 |
23.0 |
(8.6 |
) |
(37.4 |
)% |
||||||||||
|
Total operating expenses |
346.0 |
336.5 |
9.5 |
2.8 |
% |
|||||||||||
|
Operating income |
11.9 |
48.1 |
(36.2 |
) |
(75.3 |
)% |
||||||||||
|
Interest and other income (expense), net |
(11.4 |
) |
(24.2 |
) |
12.8 |
(52.9 |
)% |
|||||||||
|
Income before income taxes, equity in income of |
0.5 |
23.9 |
(23.4 |
) |
(97.9 |
)% |
||||||||||
|
Income tax provision (benefit) |
(3.1 |
) |
16.1 |
(19.2 |
) |
(119.3 |
)% |
|||||||||
|
Equity in income (loss) of unconsolidated investees, net of tax |
0.6 |
(0.2 |
) |
0.8 |
(400.0 |
)% |
||||||||||
|
Consolidated net income |
4.2 |
7.6 |
(3.4 |
) |
(44.7 |
)% |
||||||||||
|
Net income (loss) attributable to noncontrolling interests in |
(3.4 |
) |
- |
(3.4 |
) |
|||||||||||
|
Net income attributable to Bruker Corporation |
$ |
7.6 |
$ |
7.6 |
- |
0.0 |
% |
|||||||||
Revenue
The following table presents revenue, change in revenue, and revenue growth by reportable segment for the periods reported:
|
Three Months Ended |
||||||||||||||||
|
2025 |
2024 |
Dollar |
Percentage |
|||||||||||||
|
BSI BioSpin |
$ |
195.3 |
$ |
217.5 |
$ |
(22.2 |
) |
(10.2 |
)% |
|||||||
|
BSI CALID |
285.8 |
265.6 |
20.2 |
7.6 |
% |
|||||||||||
|
BSI Nano |
252.1 |
252.5 |
(0.4 |
) |
(0.2 |
)% |
||||||||||
|
BEST |
66.3 |
69.1 |
(2.8 |
) |
(4.1 |
)% |
||||||||||
|
Eliminations (a) |
(2.1 |
) |
(4.0 |
) |
1.9 |
|||||||||||
|
Total revenue |
$ |
797.4 |
$ |
800.7 |
$ |
(3.3 |
) |
(0.4 |
)% |
|||||||
a)
Represents product and service revenue between reportable segments.
Revenue decreases for the three months ended June 30, 2025, compared to the year ago quarter, were primarily attributable to the BSI BioSpin Segment with the decline primarily driven by weaker demand in the biopharma and industrial markets for life science instruments. This decrease was partially offset by a year-on-year increase in revenue in the BSI CALID Segment, which was primarily due to increased revenue from prior year acquisitions.
Geographically during the three months ended June 30, 2025, compared to the same period in 2024, our North American revenue decreased 8.8% and European revenue decreased by 1.2%, while Asia Pacific revenue increased by 6.8%.
Gross Profit
The following table presents gross profit and gross profit margins by reportable segment for the periods reported:
|
Three Months Ended |
||||||||||||||||
|
2025 |
2024 |
|||||||||||||||
|
Gross Profit |
Percentage of |
Gross Profit |
Percentage of |
|||||||||||||
|
BSI BioSpin |
$ |
83.4 |
42.7 |
% |
$ |
102.7 |
47.2 |
% |
||||||||
|
BSI CALID |
145.3 |
50.8 |
% |
143.0 |
53.8 |
% |
||||||||||
|
BSI Nano |
115.9 |
46.0 |
% |
121.5 |
48.1 |
% |
||||||||||
|
BEST |
13.3 |
20.1 |
% |
17.4 |
25.2 |
% |
||||||||||
|
Total gross profit |
$ |
357.9 |
44.9 |
% |
$ |
384.6 |
48.0 |
% |
||||||||
The decrease in gross profit and gross profit margin, compared to the prior year quarter, were driven primarily by changes in sales mix, combined with increased cost of goods sold due to higher U.S. tariffs and foreign exchange headwinds from a declining U.S. dollar
Selling, General and Administrative
Our selling, general and administrative expenses for the three months ended June 30, 2025, increased to 29.0% of total revenue, from 27.6% of total revenue for the comparable period in 2024. The increase as a percentage of revenue was a result of increased spending related to the impact from acquisitions that occurred early in the second quarter of 2024.
Research and Development
Our research and development expenses for the three months ended June 30, 2025 increased to 12.6% of total revenue from 11.5% of total revenue for the comparable period in 2024. The increase as a percentage of revenue is a result of the current year impact of prior year acquisitions.
Other Charges, Net
Other charges, net for the three months ended June 30, 2025, decreased to $14.4 million compared to $23.0 million for the three months ended June 30, 2024. The year over year decrease was primarily attributed to lower acquisition-related expenses as fewer acquisitions closed in the second quarter of the current year compared to the comparable period in 2024. This decrease was offset by a slight increase in restructuring charges related primarily to restructuring programs as described in Note 10, Restructuring.Refer to Note 9,Other Charges, net for more details on our other charges, net costs. In addition, in the second quarter of 2025, the Company initiated a corporate-wide restructuring program to be implemented across multiple functions and geographies to address challenges in the current business environment. We anticipate additional restructuring charges in the third and fourth quarter of 2025 with activities under these plans expected to be completed by 2026.
Operating Income
The following table presents operating income and operating margins on revenue by reportable segment for the periods reported:
|
Three Months Ended |
||||||||||||||||
|
2025 |
2024 |
|||||||||||||||
|
Operating |
Percentage of |
Operating |
Percentage of |
|||||||||||||
|
BSI BioSpin |
$ |
18.1 |
9.3 |
% |
$ |
37.3 |
17.1 |
% |
||||||||
|
BSI CALID |
26.2 |
9.2 |
% |
35.5 |
13.4 |
% |
||||||||||
|
BSI Nano |
(13.4 |
) |
(5.3 |
)% |
(3.6 |
) |
(1.4 |
)% |
||||||||
|
BEST |
7.2 |
10.9 |
% |
10.5 |
15.2 |
% |
||||||||||
|
Corporate, eliminations and other (a) |
(26.2 |
) |
(31.6 |
) |
||||||||||||
|
Total operating income |
$ |
11.9 |
1.5 |
% |
$ |
48.1 |
6.0 |
% |
||||||||
a)
Represents corporate costs and eliminations not allocated to the reportable segments.
The decrease in operating income and operating income margin was driven by the factors described above. In August 2025, the Company announced a significantly expanded cost savings initiative that is expected to reduce our annual costs by approximately $100 million to $120 million in 2026. These major cost reductions affect all parts of the Company's business, from supply chain and manufacturing to commercial, administrative and research and development investments. See Note 10, Restructuringin the Notes to Unaudited Condensed Consolidated Financial Statements.
Interest and Other Income (Expense), Net
The increase in interest and other income (expense), net in the three months ended June 30, 2025, as compared to the same period in 2024 was primarily due to lower foreign exchange differences on the revaluation of monetary items and the inclusion of a significant impairment of minority investments in the comparative prior period.
Income Tax Provision
The effective tax rate for the three months ended June 30, 2025, was not meaningful due to one-time favorable discrete events recorded during the period. The effective tax rate for the three months ended June 30, 2024 was 67.4%.
The OECD introduced its Pillar 2, which provides guidance for a global minimum tax. Various countries have either enacted or are in the process of enacting legislation to implement this framework. Our income tax provision for the three months ended June 30, 2025, reflects currently enacted legislation and guidance related to the model rules. This enacted legislation and guidance had an impact on our income tax provision, resulting in an increase to our adjusted effective tax rate of 2.3% for the three months ended June 30, 2025. We continue to monitor the countries in which it operates as they enact legislation implementing Pillar 2.
RESULTS OF OPERATIONS
Six Months Ended June 30, 2025, compared to the Six Months Ended June 30, 2024
Consolidated Results
The following table presents our results for the periods reports:
|
Six Months Ended June 30, |
||||||||||||||||
|
2025 |
2024 |
Dollar |
Percentage |
|||||||||||||
|
Product revenue |
$ |
1,278.0 |
$ |
1,241.3 |
$ |
36.7 |
3.0 |
% |
||||||||
|
Service and other revenue |
320.8 |
281.1 |
39.7 |
14.1 |
% |
|||||||||||
|
Total revenue |
1,598.8 |
1,522.4 |
76.4 |
5.0 |
% |
|||||||||||
|
Cost of product revenue |
668.4 |
617.7 |
50.7 |
8.2 |
% |
|||||||||||
|
Cost of service and other revenue |
181.3 |
167.3 |
14.0 |
8.4 |
% |
|||||||||||
|
Total cost of revenue |
849.7 |
785.0 |
64.7 |
8.2 |
% |
|||||||||||
|
Gross profit |
749.1 |
737.4 |
11.7 |
1.6 |
% |
|||||||||||
|
Operating expenses: |
||||||||||||||||
|
Selling, general and administrative |
456.8 |
416.6 |
40.2 |
9.6 |
% |
|||||||||||
|
Research and development |
197.3 |
174.0 |
23.3 |
13.4 |
% |
|||||||||||
|
Other charges, net |
51.3 |
33.9 |
17.4 |
51.3 |
% |
|||||||||||
|
Total operating expenses |
705.4 |
624.5 |
80.9 |
13.0 |
% |
|||||||||||
|
Operating income |
43.7 |
112.9 |
(69.2 |
) |
(61.3 |
)% |
||||||||||
|
Interest and other income (expense), net |
(18.1 |
) |
(17.4 |
) |
(0.7 |
) |
4.0 |
% |
||||||||
|
Income before income taxes, equity in income of |
25.6 |
95.5 |
(69.9 |
) |
(73.2 |
)% |
||||||||||
|
Income tax provision (benefit) |
5.6 |
35.9 |
(30.3 |
) |
(84.4 |
)% |
||||||||||
|
Equity in income (loss) of unconsolidated investees, net of tax |
1.0 |
- |
1.0 |
|||||||||||||
|
Consolidated net income |
21.0 |
59.6 |
(38.6 |
) |
(64.8 |
)% |
||||||||||
|
Net income (loss) attributable to noncontrolling interests in |
(4.0 |
) |
1.1 |
(5.1 |
) |
(463.6 |
)% |
|||||||||
|
Net income attributable to Bruker Corporation |
$ |
25.0 |
$ |
58.5 |
$ |
(33.5 |
) |
(57.3 |
)% |
|||||||
Revenue
The following table presents revenue, change in revenue, and revenue growth by reportable segment for the periods reported:
|
Six Months Ended |
||||||||||||||||
|
2025 |
2024 |
Dollar |
Percentage |
|||||||||||||
|
BSI BioSpin |
$ |
403.1 |
$ |
400.3 |
$ |
2.8 |
0.7 |
% |
||||||||
|
BSI CALID |
565.9 |
493.5 |
72.4 |
14.7 |
% |
|||||||||||
|
BSI Nano |
508.7 |
492.9 |
15.8 |
3.2 |
% |
|||||||||||
|
BEST |
125.6 |
142.2 |
(16.6 |
) |
(11.7 |
)% |
||||||||||
|
Eliminations (a) |
(4.5 |
) |
(6.5 |
) |
2.0 |
|||||||||||
|
Total revenue |
$ |
1,598.8 |
$ |
1,522.4 |
$ |
76.4 |
5.0 |
% |
||||||||
a)
Represents product and service revenue between reportable segments.
Revenue increases in the six months ended June 30, 2025, compared to the year ago quarter, were driven mostly by ELITechGroup and NanoString, partially offset by organic revenue decline. The BSI CALID Segment increase in revenue was primarily from the ELITech molecular diagnostics business, which was acquired in the second quarter of 2024. BSI Nano Segment increase in revenue was primarily driven by the Nanostring business, which was acquired in the second quarter of 2024. The BEST revenue decrease was driven mainly by a softness in the clinical MRI market, as well as a strong prior-year comparison for the Research Instruments business.
Geographically in the six months ended June 30, 2025, our North American revenue decreased 0.3%, Asia Pacific revenue increased by 5.7%, and European revenue increased by 7.1% driven by driven by tailwinds from acquisitions compared to the same period in 2024.
Gross Profit
The following table presents gross profit and gross profit margins by reportable segment for the periods reported:
|
Six Months Ended |
||||||||||||||||
|
2025 |
2024 |
|||||||||||||||
|
Gross Profit |
Percentage of |
Gross Profit |
Percentage of |
|||||||||||||
|
BSI BioSpin |
$ |
177.1 |
43.9 |
% |
$ |
194.7 |
48.6 |
% |
||||||||
|
BSI CALID |
298.7 |
52.8 |
% |
272.8 |
55.3 |
% |
||||||||||
|
BSI Nano |
247.3 |
48.6 |
% |
237.3 |
48.1 |
% |
||||||||||
|
BEST |
26.0 |
20.7 |
% |
32.6 |
22.9 |
% |
||||||||||
|
Total gross profit |
$ |
749.1 |
46.9 |
% |
$ |
737.4 |
48.4 |
% |
||||||||
The slight increase in gross profit compared to the prior year was driven primarily by the impact of the ELITechGroup and NanoString acquisitions that occurred in 2024 offset by associated business combination amortization expenses, combined with increased cost of goods sold due to higher U.S. tariffs and foreign exchange headwinds from a declining U.S. dollar.
Selling, General and Administrative
Our selling, general and administrative expenses for the six months ended June 30, 2025, increased to 28.6% of total revenue, from 27.4% of total revenue for the comparable period in 2024. The increase as a percentage of revenue was a result of increased costs from recent acquisitions compared to the same period in 2024.
Research and Development
Our research and development expenses for the six months ended June 30, 2025, increased to 12.3% of total revenue from 11.4% of total revenue for the comparable period in 2024. The increase as a percentage of revenue is a result of our increased research and development related costs from prior year acquisitions.
Other Charges, Net
Other charges, net for the six months ended June 30, 2025, increased to $51.3 million compared to $33.9 million for the comparable period in 2024. The year over year increase was primarily due to $22.6 million of acquisition-related litigation charges that primarily relate to the acquisitions of BCA and NanoString, $10.5 million of restructuring charges related primarily to restructuring programs as described in Note 10, Restructuring,offset by a decrease of $12.6 million in acquisition-related expenses due to fewer acquisitions closed in the current year compared to 2024. Refer to Note 9,Other Charges, net for more details on our other charges, net costs. In addition, in the second quarter of 2025, the Company initiated a corporate-wide restructuring program to be implemented across multiple functions and geographies to address challenges in the current business environment. We anticipate additional restructuring charges in the third and fourth quarter of 2025 with activities under these plans expected to be completed by 2026.
Operating Income
The following table presents operating income and operating margins on revenue by reportable segment for the periods reported:
|
Six Months Ended |
||||||||||||||||
|
2025 |
2024 |
|||||||||||||||
|
Operating |
Percentage of |
Operating |
Percentage of |
|||||||||||||
|
BSI BioSpin |
$ |
41.7 |
10.3 |
% |
$ |
68.5 |
17.1 |
% |
||||||||
|
BSI CALID |
66.4 |
11.7 |
% |
76.6 |
15.5 |
% |
||||||||||
|
BSI Nano |
(20.4 |
) |
(4.0 |
)% |
7.2 |
1.5 |
% |
|||||||||
|
BEST |
14.1 |
11.2 |
% |
18.6 |
13.1 |
% |
||||||||||
|
Corporate, eliminations and other (a) |
(58.1 |
) |
(58.0 |
) |
||||||||||||
|
Total operating income |
$ |
43.7 |
2.7 |
% |
$ |
112.9 |
7.4 |
% |
||||||||
a)
Represents corporate costs and eliminations not allocated to the reportable segments
The decrease in operating income observed in all segments was due to factors described above.
In August 2025, the Company announced a significantly expanded cost savings initiative that is expected to reduce our annual costs by $100 million to $120 million in 2026. These major cost reductions affect all parts of the Company's business, from supply chain and manufacturing to commercial, administrative and research and development investments.
Interest and Other Income (Expense), Net
Interest and other income (expense), net in the six months ended June 30, 2025, is comparable to that in the six months ended June 30, 2024.
Income Tax Provision
The effective tax rates for the six months ended June 30, 2025, and 2024 were 21.9% and 37.6%, respectively. The decrease in the Company's effective tax rate was primarily due to a change in jurisdictional mix, and net favorable discrete activities.
The OECD introduced its Pillar 2, which provides guidance for a global minimum tax. Various countries have either enacted or are in the process of enacting legislation to implement this framework. Our income tax provision for the six months ended June 30, 2025, reflects currently enacted legislation and guidance related to the model rules. This enacted legislation and guidance had an impact on our income tax provision, resulting in an increase to our adjusted effective tax rate of 2.3% for the six months ended June 30, 2025. We continue to monitor the countries in which it operates as they enact legislation implementing Pillar 2.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows
We anticipate that our existing cash and credit facilities will be sufficient to support our operating and investing needs for at least the next twelve months. Our future cash requirements could be affected by acquisitions that we may complete, purchases of our common stock, or the payment of dividends in the future. Historically, we have used the liquidity generated from cash flow from operations, debt financings, and issuances of common stock to finance our growth and operating needs. In the future, there are no assurances that we will continue to generate cash flow from operations, that additional financing alternatives will be available to us, if required, or, if available, will be obtained on terms favorable to us.
We aggregate all bank accounts that are subject to our notional cash pooling arrangement into a single balance on our consolidated balance sheets. Our notional cash pooling arrangement is managed by a third-party financial institution and as of June 30, 2025, it was in a positive position. The cash and cash equivalent balance held outside of the United States in our foreign subsidiaries was primarily located in the Netherlands, Switzerland, and Hong Kong.
The following table presents our cash flows from operating activities, investing activities, and financing activities for the periods reported:
|
Six Months Ended |
||||||||
|
2025 |
2024 |
|||||||
|
Net cash provided by (used in) operating activities |
$ |
(62.5 |
) |
$ |
22.9 |
|||
|
Net cash used in investing activities |
(117.2 |
) |
(1,629.1 |
) |
||||
|
Net cash provided by financing activities |
44.3 |
1,307.5 |
||||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
44.9 |
(19.7 |
) |
|||||
|
Net decrease in cash, cash equivalents, and restricted cash |
$ |
(90.5 |
) |
$ |
(318.4 |
) |
||
Net cash used in operating activities during the six months ended June 30, 2025, resulted primarily from a change in operating assets and liabilities, net of acquisitions of $151.0 million, offset by consolidated net income adjusted for non-cash items of $88.5 million. Net cash provided by operating activities during the six months ended June 30, 2024, resulted primarily from consolidated net income adjusted for non-cash items of $144.7 million, partially offset by a change in operating assets and liabilities, net of acquisitions and divestitures of $121.8 million.
The decrease in consolidated net income adjusted for non-cash items was primarily due to lower income as result of increased costs related to recent acquisitions combined with negative impact of new global trade tariffs. The change in operating assets and liabilities, net of acquisitions increased primarily due to timing of income taxes payable offset by increased collections of receivables.
Net cash used in investing activities during the six months ended June 30, 2025, resulted primarily from cash paid for acquisitions of $69.5 million, purchases of property, plant and equipment of $47.3 million, and minority investments of $3.2 million. Net cash used in investing activities during the six months ended June 30, 2024, resulted primarily from cash paid for acquisitions of $1,576.5 million, purchases of property, plant and equipment of $46.0 million, and minority investments of $10.0 million, offset by $2.5 million of proceeds from cross-currency swap agreements.
Net cash provided by financing activities during the six months ended June 30, 2025, was primarily from net proceeds of our revolving line of credit of $89.1 million, proceeds from long-term debt of $2.9 million, offset by repayments of long-term debt of $22.3 million, the payment of dividends to common shareholders of $15.3 million, and cash paid for purchases of common stock under our repurchase program of $10.0 million. Net cash provided by financing activities during the six months ended June 30, 2024, was primarily from net proceeds from our revolving line of credit of $233.2 million, proceeds from long-term debt of $805.7 million, proceeds from our public offering of common stock $402.9 million, offset by the repayment of our 2012 Note Purchase Agreement of $100.0 million, and the payment of dividends to common shareholders of $15.0 million.
Share Repurchase Program
Refer to Note 21, Shareholder's Equity, in the Notes to our Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for more information on our share repurchase program.
Incentive Compensation Plan
In May 2025, the 2026 Plan was approved by our stockholders. The 2026 Plan will be effective as of the Effective Date, which will be the date immediately following the date on which the Prior Plan expires. No additional awards will be granted under the Prior Plan on or after the Effective Date. The 2026 Plan provides for the issuance of up to 12,000,000 shares of our common stock. The 2026 Plan, will be administered by the Compensation Committee of the Board or another Committee, and provides for grants of awards to non-employee directors, employees, and certain of our key advisors in the form of nonqualified and incentive options, stock awards, stock units, stock appreciation rights, cash-based awards, and other awards. The Committee has the authority to determine which employees will receive awards, the amount of any awards, and other terms and conditions of such awards. The 2026 Plan will terminate on May 28, 2035, unless terminated earlier pursuant to its terms.
Credit Facilities
As of June 30, 2025, we have total outstanding debt of $2.4 billion and a revolving credit facility that provides for up to $900.0 million of backup liquidity to finance working capital needs, refinance or reduce existing indebtedness, and for general corporate use. In addition, the facility provides for an uncommitted incremental facility whereby, under certain circumstances, we may, at our option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $400 million. As of June 30, 2025, we were in compliance with all covenants of our debt agreements.
For a summary of the fair and carrying values of our outstanding debt as of June 30, 2025, and December 31, 2024, refer to Note 15, Debt and Note 16, Fair Value of Financial Instrumentsto our unaudited condensed consolidated financial statements included in this report. For additional information on our outstanding debt and credit facility refer to, Note 21, Debt, to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes to our critical accounting policies and estimates since December 31, 2024. Refer to our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our critical accounting policies.
RECENT ACCOUNTING PRONOUNCEMENTS
Information regarding recent accounting standard changes and developments is incorporated by reference from Part I, Item 1, Unaudited Condensed Consolidated Financial Statements, of this document and should be considered an integral part of this Item 2. Refer to Note 2, Recent Accounting Pronouncementsin the Notes to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for recently adopted and issued accounting standards.
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