Becton, Dickinson and Company (BDX) Q3 FY26 earnings call: guidance and Q&A

Inquired about the broad-based momentum, particularly in the 90% of the business growing above trend, and if any one-time factors contributed, as well as the carry-over into FY27.

Tom Polen attributed the strength to the payoff of strategic investments in growth platforms over the last five years, with four platforms growing double-digits and others high single-digits. He emphasized the purposeful reallocation of R&D and commercial investments into these areas, which also offer favorable mix benefits for margin expansion.

“This is our first quarter as a focused med tech company. Those growth platforms, we had actually 4 of them growing double digits, the rest all growing high single digits in the quarter.”

asked by Travis Steed · answered by Thomas Polen

Asked whether the strong performance and share gains were primarily due to innovation or significant changes in commercial approach, given BD's already high market share in many categories.

Tom Polen stated it's a combination of both. He detailed changes in commercial excellence, including new sales compensation, AI tools for reps, and reallocation of headcount. He cited specific examples like a 15% increase in APM sales team contributing 100-150 bps to APM growth and dedicated teams for PureWick in the VA channel.

“We grew the APM sales team by about 15% in the U.S. And we announced this morning that about 100 to 150 basis points of the APM double-digit growth this quarter came from that investment already.”

asked by Patrick Wood · answered by Thomas Polen

Requested color on FY27, specifically if revenue growth could be at the high end of low single digits and the puts/takes for the P&L, including operating margin growth.

Vitor Roque reiterated the FY27 revenue outlook as low single-digit, primarily due to a 200 bps headwind from the Alaris remediation ending. For EPS, he suggested a "modest leverage" on that revenue baseline, supported by pricing actions, BD excellence productivity, and capital allocation. Formal guidance will be in November.

“Regarding FY '27 outlook, I think we have consistently characterized FY '27 as low single-digit revenue growth and that is due to the Alaris remediation coming to an end in FY '26, which creates a 200 basis point headwind next year.”

asked by Larry Biegelsen · answered by Vitor Roque

Asked for BD's perspective on the utilization and CapEx environment, noting the strong performance in APM.

Tom Polen stated BD sees solid utilization across its portfolio, reflected in Q3 results (U.S. MDS up 6%, Specimen Management up 14%). He highlighted internal metrics showing an uptake in tube utilization vs. needle utilization, suggesting more diagnostic testing per patient, indicative of strong healthcare consumption.

“And in fact, one of the metrics we look at internally is what's the ratio between the number of needles we sell and the number of tubes we sell, which is kind of how much diagnostic testing is being done. And we have seen over the last couple of quarters, and we saw it again this quarter, an uptake in tube utilization versus needle utilization, which says more testing is being done per patient.”

asked by Vijay Kumar · answered by Thomas Polen

Inquired about the trends in the 10% of the portfolio acting as a drag on organic growth (Alaris, vaccines, China) and visibility on when these headwinds might abate.

Tom Polen confirmed all three headwinds played out as expected. For vaccines, he noted stabilization and positive signs, expecting to lap the headwind next quarter, with preliminary order patterns not showing a repeat level of headwind in FY27. China is becoming a smaller portion of BD's revenue (4% of NBD revenue, dropping to 3%). Alaris is a defined headwind (100 bps in FY26, 200 bps in FY27) that will end in FY27.

“China is a much smaller portion of BD. It's going to be down to just 4% of NBD revenue, and it's going to probably drop into the 3s as the rest of the BD is growing faster as we get into next year.”

asked by Robert Marcus · answered by Thomas Polen

Asked about the implied Q4 growth deceleration to 2.5% and the impact of inflation (oil-based resins, freight) on FY27, and how BD is hedging against it.

Vitor Roque explained the Q4 deceleration is primarily due to a tougher Alaris comparison (200 bps pressure vs. 100 bps in Q3). Tom Polen addressed FY27 macro, stating that while oil prices are volatile, resin/molded plastic components are 5% of COGS. BD is proactively taking pricing actions and assuming higher input costs, viewing any improvement as a positive.

“The major dynamic that the main dynamic reflects the Alaris comp dynamics. So we have highlighted at the beginning of the year that we're going to have higher compare -- a higher tough compare in Q4 because of the Alaris peak last year. So that adds a point of pressure on Q4 versus Q3, adding to 200 basis points of total pressure.”

asked by Matthew Taylor · answered by Vitor Roque