Snapshot
Danaher Corp /De/ reported $6.84B of revenue in Q4 2025, up 4.6% year over year, with diluted EPS of $1.68 and an operating margin of 22.0%.
- Revenue
- $6.84B
- YoY growth
- +4.6%
- Diluted EPS
- $1.68
- Operating margin
- 22.0%
What management said
- •Our team's disciplined execution also enabled us to exceed our fourth quarter margin, earnings, and cash flow expectations.
- •In pharma, global monoclonal antibody production remained robust, and we were encouraged to see a modestly more favorable capital spending environment.
- •We also continued to see a recovery in pharma R&D spending, while biotech demand remained stable.
- •Academic and government demand remained muted but was stable sequentially, while clinical and applied end markets continued to perform well.
- •So with that, let's take a closer look at our full-year 2025 financial results.
- •Our adjusted operating profit margin was 28.2%, and adjusted diluted net earnings per common share of $7.80 were up 4.5%.
- •We also generated $5.3 billion of free cash flow, resulting in a free cash flow to net income conversion ratio of approximately 145%.
- •Strong free cash flow generation is one of the most important metrics at Danaher, and 2025 marks the 34th consecutive year our free cash flow to net income conversion ratio exceeded 100%.
- •Our earnings growth and strong free cash flow generation in the face of tariff-related cost pressures and significant productivity investments underscore the differentiated quality of our earnings and business models.
- •These are just a few of the innovations from across Danaher that are delivering meaningful customer impact while also driving clear financial results, including approximately 25% year-over-year growth in new product revenue.
- •Sales were $6.8 billion in the fourth quarter, and we delivered 2.5% core revenue growth.
- •High growth markets were up mid-single digits, with solid growth outside of China, more than offsetting a low single-digit decline in China.
What went well
- •Danaher delivered a strong finish to the year with better-than-expected performance across the portfolio, exceeding fourth quarter margin, earnings, and cash flow expectations.
- •Bioprocessing remained strong, with consumables supported by a book-to-bill around one and equipment orders increasing sequentially for three quarters in a row, plus revenue growth in Q4.
- •Full-year sales were $24.6 billion with 2% core revenue growth, and Q4 delivered 2.5% core revenue growth, while adjusted diluted EPS of $2.23 in the quarter rose 4% year-over-year.
- •The company generated $5.3 billion of free cash flow for the year, a roughly 145% free cash flow to net income conversion, marking the 34th consecutive year above 100%.
- •New product revenue grew approximately 25% year-over-year, supported by an accelerated cadence of launches including Cytiva's 20-plus new products, the SCIEX ZenoTOF 8600, and Cepheid's FDA-cleared Xpert GI Panel.
- •Pharma end markets showed growth for a third consecutive quarter and respiratory testing beat expectations as influenza-like illness rose sharply in the back half of Q4.
What went wrong
- •Q4 adjusted gross profit margin of 58.2% and adjusted operating profit margin of 28.3% were both down 130 basis points as cost savings initiatives more than offset volume leverage.
- •Academic and government demand remained muted, with policy and budget uncertainty in the U.S. creating potential choppiness ahead.
- •China saw a low single-digit core revenue decline, and bioprocessing equipment came off a mid-teens decline in 2025.
- •Management declined to call equipment growth a trend after only one quarter of growth and guided equipment flat for 2026.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Core revenue growth | FY2026 | 3%-6% framework (October) | 3%-6%, guiding to low end (3%-4%) | Converted prior framework into formal guide |
| Adjusted EPS | FY2026 | — | $8.35-$8.50 | Initiated |
| Bioprocessing growth | FY2026 | — | High single digits (upper end on consumables) | Initiated |
| Bioprocessing equipment | FY2026 | — | Flat | Initiated |
| Diagnostics growth | FY2026 | — | Low single digits | Initiated |
| Life sciences growth | FY2026 | — | Flat | Initiated |
| Respiratory revenue | Q1 2026 | — | Around $500 million | Initiated |
| 2025 cost-action benefit | FY2026 | — | About $0.30 EPS / $250 million | Initiated |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Q4 core revenue | +2.5% | Developed markets up low single digits and high growth markets up mid-single digits, partly offset by a low single-digit decline in China. |
| Q4 adjusted operating margin | -130 bps to 28.3% | Cost savings initiatives more than offset the positive impact of volume leverage. |
| Q4 adjusted EPS | +4% to $2.23 | Earnings growth despite tariff-related cost pressures and significant productivity investments. |
| SCIEX | Mid-single-digit growth | ZenoTOF 8600 traction plus a third consecutive quarter of pharma end-market improvement and robust clinical and applied markets. |
| New product revenue | +25% | Accelerated cadence of new product introductions across the portfolio. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Bioprocessing recovery | Equipment in mid-teens decline; consumables recovering | Consumables strong with book-to-bill near one; equipment grew in Q4 with three quarters of sequential order gains | improving |
| End-market improvement | Gradual improvement through 2025 | Expected to continue gradually into 2026, led by pharma | improving |
| Academic and government demand | Muted but stable | Still muted with policy/budget uncertainty, a potential upside if it stabilizes | stable |
| M&A environment | — | More constructive, with valuations and interest rates moving favorably and balance sheet primed | improving |
| Reshoring / equipment investment cycle | Long-term theme | Believed to be early innings of a long-term investment cycle, though timing is hard to pinpoint | improving |
| China bioprocessing | — | Underlying activity strengthening, biotech finding new momentum, expected to grow in 2026 | improving |
Q&A summary
How much conservatism is in the 3%-6% core guide and where is the upside?
The guide reflects continued end-market recovery; bioprocessing high single digits, life sciences flat, diagnostics low single digits. Upside levers are continued life science end-market improvement (biotech funding falling through to orders, China research) and bioprocessing growing beyond high single digits.
What did the bioprocessing order book and book-to-bill look like exiting Q4?
The order book fully supports high single-digit growth for 2026; consumables book-to-bill is around one with shorter lead times, and equipment orders rose sequentially for three straight quarters, though one quarter of revenue growth is not yet called a trend.
Why not guide bioprocessing equipment higher given Q4 strength and easy comps?
Management guided equipment flat as a prudent starting point because one quarter does not make a trend, preferring more data points before raising the outlook.
Can you walk through the 2026 margin and EPS bridge?
The $8.35-$8.50 EPS guide assumes 3%-4% core growth, 35%-40% fall-through, a roughly $0.30 benefit from $250 million of 2025 cost actions within about 100 bps of margin expansion, and FX assumed to net to zero.
How is the M&A environment and Danaher's readiness to act?
The environment is more constructive with improving valuations and moderating interest rates; discipline around attractive end markets and a workable financial model remains, and the strong balance sheet positions Danaher to act on opportunities.
How sensitive is the business to improving biotech funding?
Emerging biotech is roughly 10%-15% of bioprocessing (about 5% of total Danaher); most bioprocessing is driven by commercial volume at about 75%, with some improved biotech orders seen but still early days.