Becton, Dickinson and Company (BDX) Q1 FY26 earnings call: guidance and Q&A

Why is Q2 revenue guidance 2% despite easy comps, and what are the assumptions for the full year cadence, especially with no second-half ramp?

Q1 performance was solid, and core growth drivers remain intact for Q2 and the rest of the year. The Q2 outlook reflects modest timing benefits in Biopharma Systems and MMS seen in Q1. The key takeaway is that the company is starting the year at its full-year run rate, with no ramp needed from Q1 to Q2 or from the first half to the second half, which is a much better position than previous years.

“Our Q2 outlook does reflect some modest timing benefits in Biopharma Systems and MMS that we saw in Q1, and if you adjust for that, basically Q1 and Q2 are in line with each other.”

asked by Travis Steed · answered by Thomas Polen

Are there any structural changes that would prevent New BD from hitting its normalized mid-single-digit growth rate, given current headwinds like China VBP and Alaris?

Management feels very good about the portfolio, which has been purposely reshaped through divestitures and over 20 tuck-in acquisitions into high-growth areas. While 10% of the portfolio faces known headwinds, the remaining 90% continues to perform at a solid mid-single-digit growth rate. Significant commercial investments are being made in these growth areas, and the innovation pipeline is strong.

“Absolutely not. We feel really good about our portfolio. As we talked about, we've been extremely active over the last several years in very purposely reshaping our portfolio.”

asked by Patrick Wood · answered by Thomas Polen

What is the expected impact of China VBP in FY26, when will vaccine headwinds lap, and are there any changes to Alaris expectations for this year and next?

All headwinds are playing out as expected. China VBP is expected to impact 80% of the portfolio by the end of FY26, with positive volume growth offsetting price compression. Vaccine headwinds are expected to continue through FY26. Alaris is seeing strong competitive momentum with record new wins, and while it will be a headwind in FY26 (100 bps) and FY27 (200 bps) due to remediation grow-over, the competitive position is strengthening.

“Everything is playing out as we expected it in Q1, and we expect that to continue for the balance of the year.”

asked by Larry Biegelsen · answered by Thomas Polen

Why is Q2 guidance 2% given easy comps, and are there any one-time considerations or TSAs/MSAs affecting the 25% operating margin target?

Q1 performance was strong, and Q2 is consistent with full-year guidance, with no fundamental changes. There are no specific one-time factors expected for the 25% operating margin target. This target is supported by strong execution of BD Excellence, favorable mix from strategic investments in high-growth, high-margin areas, and a significantly simplified manufacturing network (reduced from over 90 to under 50 plants).

“And from a margin perspective, there is no specific one-timers that we are expecting. So we are still holding the 25% as we committed before, and this is in the basis of our margin performance with the strong execution of our BD Excellence and also the favorable mix that we are driving through intentional investments in strategic areas.”

asked by Robbie Marcus · answered by Vitor Roque

Are there any impacts from macro trends like nursing shortages or weather, and can you provide more details on GLP-1 contracts?

Utilization levels remain steady, and the CapEx environment is solid. Over 90% of revenue is consumables, providing resilience. GLP-1s are a high-growth area, currently about 2% of revenue, with over 80 novel and biosimilar molecules contracted. Management is bullish on injectable GLP-1s, viewing orals as complementary, and sees continued momentum and investment in injectable capacity.

“When it comes to GLP-1s, we're in a really good position there. Certainly, it's a modest portion of our business today, about 2% of our revenue, but it's a high-growth area and certainly a growth opportunity as we look forward.”

asked by Joanne Wuensch · answered by Thomas Polen

When will the impact of R&D investments and the 'innovate' strategy be seen in the pipeline, and how are launches being accelerated?

Launches are already ramping up, with many new products coming this year and significant years for launches in FY27 and FY28. The $50 million R&D reallocation has started new programs. BD Excellence is being applied to R&D, accelerating development timelines by 6 to 12 months through kaizens and focused efforts across key development programs, with early positive results.

“And we've seen a number of R&D projects where we've accelerated time lines to launch by 6 and even up to 12 months on that.”

asked by Matthew Miksic · answered by Thomas Polen

How should we think about Alaris's performance beyond this year, and will New BD be more aggressive with M&A to boost market growth?

Alaris is expected to be a 100 bps headwind in FY26 and a 200 bps headwind in FY27 due to remediation grow-over, but the company expects to be in a stronger competitive position. For M&A, BD remains focused on tuck-in acquisitions that are accretive to both revenue growth and EPS, not transformational M&A. A robust pipeline exists in attractive high-growth sectors to supplement weighted-average market growth.

“Our focus remains on tuck-in M&A, not transformational M&A. And we do have of a robust pipeline from that perspective.”

asked by Shagun Singh Chadha · answered by Thomas Polen

What is the current pricing environment, and can BD's innovation drive price premiums and contribute to gross margin expansion?

The pricing environment is stable, with overall pricing generally flat to slightly positive (up >50 bps ex-China, offset by China). New product innovations are entering new categories, allowing for value-based pricing. Solutions like Pyxis Pro and pharmacy automation deliver clear economic value (e.g., reducing drug shortages, labor costs), which supports premium pricing and is well-tailored to the current healthcare environment.

“Pricing, what we're seeing so far in Q1, details will come out further in the 10-Q that will be filed later today. But overall, pricing is generally flat to slightly positive. That's up a little over 50 basis points ex China positive price, offset by the pricing dynamic that we see in China.”

asked by Josh Jennings · answered by Thomas Polen