We delivered a solid second quarter with better-than-expected revenue, earnings, and cash flow. We were particularly pleased to see an acceleration in core growth versus the first quarter, driven by good commercial execution, recent innovation, and recovery in our end market. While customer project timing impacted bioprocessing revenue, underlying order trends remained robust. Improved growth across our portfolio, paired with benefits from our recent productivity initiatives, helped drive high single-digit earnings growth.
This strong execution and the earlier-than-expected close of Masimo enables us to again raise our full year adjusted EPS guidance. The quarter illustrates the benefit of our balanced end market and geographic diversification while reinforcing our outlook for accelerating revenue and earnings growth in the second half and beyond. Demand from large pharma and biopharma customers remained healthy, while improved biotech funding supported improved funnel and order activity. Our capital deployment flywheel is active, supported by significant balance sheet optionality.
The Danaher Business System and our team are powerful differentiators, helping us drive both growth and productivity. Core growth, excluding respiratory testing revenue, which highlights improvements in the underlying business trends that I mentioned a moment ago, was up 4.5%, 150 basis point acceleration from the first quarter. We were encouraged to see growth accelerate with improving trends across our end markets and recent innovations further driving growth across our businesses. Geographically, core revenues in developed markets declined slightly as both North America and Western Europe were impacted by shipment timing in biotechnology and lower respiratory revenue year-over-year.
| Metric | Period | Current guidance |
|---|---|---|
| Adjusted diluted EPS | FY2026 | Raised to $8.45-$8.60 (~10% growth at the midpoint; ~$0.07-$0.08 from the early Masimo close) |
| Core revenue growth | FY2026 | 3%-4%, anchored to the low end for modeling (better Life Sciences offset by more conservative bioprocessing) |
| Core growth ex-respiratory | Q3 2026 | ~5% (slight improvement off Q2's 4.5%), with a ~250 bps respiratory headwind |
| Core revenue growth | Q4 2026 | Mid-single-digit as respiratory headwinds essentially go away year over year |
| Bioprocessing growth | FY2026 | Mid-single-digit (~5%) after >$100M of resin shipments shifted to 2027; exiting Q4 mid-to-high single digit |
| Respiratory revenue | FY2026 | ~$1.6 billion or a touch below |
| Metric | YoY | Note |
|---|---|---|
| Total sales | +5.5% to $6.3B | Core revenue up 3% (4.5% excluding respiratory) plus contribution from acquisitions; core growth accelerated 150 bps versus Q1. |
| Biotechnology core revenue | +2.5% | Bioprocessing grew low single digits with equipment returning to growth, but consumables were held back by pushed-out resin shipments despite mid-teens order growth. |
| Life Sciences core revenue | +5.5% | Pall applied filtration up ~10% on microelectronics; instruments up mid-single digits; Abcam and IDT accelerating on improving biotech funding and academic stabilization. |
| Diagnostics core revenue | +2% (+5% ex-respiratory) | Mid-single-digit underlying growth from DxI 9000, Cepheid menu expansion and easing China VBP headwinds, offset by lower respiratory testing. |
| Adjusted operating margin | -20 bps to 27.1% | Lower respiratory revenue more than offset higher non-respiratory volume and disciplined cost management; gross margin 57.6%. |
| Adjusted diluted EPS | +8% to $1.94 | Improved growth across the portfolio plus productivity initiatives; GAAP EPS $1.23, up 60%. |
| Free cash flow | $1.3B in quarter / $2.4B H1 | 124% year-to-date free-cash-flow-to-net-income conversion, underscoring earnings quality. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Bioprocessing recovery and CapEx cycle | Improving order trends post-destocking | Equipment revenue returned to growth after several quarters of order strength; management sees the early innings of a multi-year capacity/reshoring CapEx cycle, with greenfield quoting that takes 2-3 years to convert, and reaffirmed the high-single-digit long-term bioprocessing outlook. | — |
| Capital deployment flywheel | Active M&A pipeline | Masimo closed early and is immediately accretive; StatLab (~$250M revenue, 85%+ recurring) pending for Leica Biosystems; ~$900M deployed on buybacks, with significant balance-sheet optionality remaining. | — |
| End-market stabilization | Softness across academic/biotech | Large pharma/biopharma healthy, biotech funding improving and starting to convert to orders, academic stabilizing but still below normal (<5% of revenue), and China diagnostics improving as VBP headwinds ease. | — |
| Innovation and AI | Ongoing product launches | New launches (Cytiva Biacore 8S, SCIEX novus V55, Beckman Alzheimer's p-tau217 assays) plus early 'green shoots' of AI-driven demand for automation and autonomous/lab-in-a-loop applications, notably at Beckman. | — |
| Respiratory normalization | Elevated respiratory comparisons | Respiratory a ~150 bps drag in Q2 and ~250 bps in Q3, then essentially neutral year over year in Q4, driving the expected second-half core-growth acceleration; FY respiratory ~$1.6 billion. | — |