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    TMO
    Earnings call· Jun 2026(Q2 FY26)

    THERMO FISHER SCIENTIFIC INC. TMO

    Jul 23, 2026 Source

    Executive summary

    Thermo Fisher Scientific Q2 FY26 — Strong Organic Growth and Raised Full-Year Outlook

    Thermo Fisher Scientific delivered an outstanding Q2 FY26, surpassing expectations with robust organic revenue growth and adjusted EPS. Customer activity strengthened across all end markets, particularly in Pharma and Biotech, leading to a raised full-year outlook despite minor headwinds from FX and a planned divestiture. The company continues to leverage high-impact innovation and strategic M&A to drive share gains and create value for stakeholders.

    Highlights

    5

    • Revenue grew 10% to $11.99 billion, exceeding expectations.

    • Adjusted operating income grew 15% to $2.73 billion, with margin expanding 90 basis points to 22.8%.

    • Adjusted EPS grew 13% to $6.03 per share, significantly ahead of previous guidance.

    • Full-year organic revenue growth outlook increased to "about 4%", now expecting the upper end of the 3%-4% range.

    • Clinical Research (PPD) and Bioproduction businesses delivered strong organic growth and authorizations.

    Concerns

    3

    • Divestiture of microbiology business reduces 2026 revenue by approximately $200 million and adjusted EPS by $0.05.

    • Foreign exchange rates are expected to create a $0.05 adjusted EPS headwind for the second half of 2026.

    • Academic and Government end market, while returning to growth, remains in a "stabilization period" with China's segment muted.

    Guidance & targets

    18
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $47.4 billion to $48.1 billion
    high materiality
    High
    Full-year 2026 Reported Revenue Growth
    6% to 8%
    high materiality
    High
    Full-year 2026 Organic Revenue Growth
    about 4%
    high materiality
    High
    Full-year 2026 Adjusted EPS
    $24.93 to $25.33
    high materiality
    High
    Full-year 2026 Adjusted EPS Growth
    9% to 11%
    high materiality
    High
    Full-year 2026 Adjusted Operating Income Margin Expansion
    80 basis points
    medium materiality
    High
    Full-year 2026 FX Revenue Tailwind
    $200 million
    medium materiality
    High
    Full-year 2026 Net Interest Expense
    $660 million
    low materiality
    High
    Full-year 2026 Adjusted Income Tax Rate
    11.5%
    low materiality
    High
    Full-year 2026 Free Cash Flow
    $6.9 billion to $7.4 billion
    medium materiality
    High
    Full-year 2026 Net Capital Expenditures
    $1.9 billion to $2.1 billion
    low materiality
    High
    Full-year 2026 Share Buybacks
    $4 billion
    medium materiality
    High
    Full-year 2026 Dividends
    $700 million
    low materiality
    High
    Full-year 2026 Average Diluted Share Count
    370 million and 373 million shares
    low materiality
    High
    Q3 2026 Adjusted EPS
    $0.35 to $0.40 higher than in Q2
    medium materiality
    High
    Microbiology Divestiture Impact on 2026 Revenue
    approximately $200 million reduction
    medium materiality
    High
    Microbiology Divestiture Impact on 2026 Adjusted EPS
    $0.05 reduction
    medium materiality
    High
    Microbiology Divestiture Adjusted EPS Dilution
    approximately $0.15
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Life Sciences Solutions
    Growth in this segment was led by the bioproduction business, which had another quarter of excellent organic growth. Adjusted operating margin was up 20 basis points versus the prior year quarter, driven by strong productivity partially offset by acquisition impact and unfavorable mix.
    Organic revenue growth: 3%
    		—13% reported—37.0%
    Analytical Instruments
    Delivered good growth across all three businesses, led by the Electron Microscopy business. Adjusted operating income increased 30%, and adjusted operating margin was up 420 basis points versus the year-ago quarter, benefiting from strong productivity, good volume leverage, foreign exchange, and favorable mix.
    Organic revenue growth: 7%
    		—7% reported—23.0%
    Specialty Diagnostics
    Growth in this segment was led by the health care market channel as well as the Immunodiagnostics and Transplant Diagnostics businesses. Adjusted operating margin was 70 basis points higher than Q2 2025, with favorable volume leverage and good productivity partially offset by unfavorable mix.
    Organic revenue growth: 5%
    		—6% reported—27.7%
    Laboratory Products and Biopharma Services
    Growth in this segment was led by the Research and Safety Market channel and the Clinical Research business. Adjusted operating margin was 20 basis points higher than the prior year quarter, driven by good productivity and strong performance from the recently acquired Clario business, partially offset by unfavorable mix and strategic investments.
    Organic revenue growth: 5%
    		—12% reported—14.0%

    Operational metrics

    32
    Adjusted Operating Income
    $2.73 billion15% YoY
    Q2 FY26

    Strong performance in the quarter.

    Adjusted Operating Margin
    22.8%90 bps YoY
    Q2 FY26

    Expanded due to strong productivity and favorable volume leverage.

    Adjusted EPS
    $6.0313% YoY
    Q2 FY26

    Strong growth, ahead of previous guidance.

    GAAP EPS
    $4.689% YoY
    Q2 FY26

    Reported GAAP EPS for the quarter.

    Reported Revenue Growth
    10%YoY
    Q2 FY26

    Total company reported revenue growth.

    Organic Revenue Growth
    5%YoY
    Q2 FY26

    Strong organic growth, 2% stronger than previous guidance assumptions.

    Acquisition Contribution to Revenue
    5%
    Q2 FY26

    Contribution from recent acquisitions to reported revenue growth.

    FX Impact on Revenue
    slight tailwind
    Q2 FY26

    Slight tailwind from foreign exchange in Q2.

    North America Organic Growth
    low single digits
    Q2 FY26

    Organic revenue growth in North America.

    Europe Organic Growth
    high single digits
    Q2 FY26

    Organic revenue growth in Europe.

    Asia Pacific Organic Growth
    high single digits
    Q2 FY26

    Organic revenue growth in Asia Pacific.

    China Organic Growth
    low single digits
    Q2 FY26

    Organic revenue growth in China, returning to positive.

    Adjusted Gross Margin
    41.4%
    Q2 FY26

    Total company adjusted gross margin.

    Adjusted SG&A as % of Revenue
    15.6%
    Q2 FY26

    Adjusted selling, general, and administrative expenses.

    R&D Expense
    $360 million
    Q2 FY26

    Reflecting ongoing investments in high-impact innovation.

    R&D as % of Manufacturing Revenue
    6.9%
    Q2 FY26

    R&D spend relative to manufacturing revenue.

    Net Interest Expense
    $190 million
    Q2 FY26

    Net interest expense for the quarter.

    Adjusted Tax Rate
    11.6%
    Q2 FY26

    Adjusted tax rate for the quarter.

    Average Diluted Shares
    371 million$7 million lower YoY
    Q2 FY26

    Lower due to share repurchases, net of option dilution.

    Net Capital Expenditures
    $800 million
    YTD FY26

    Year-to-date net capital expenditures.

    Capital Deployed to Shareholders
    $1.2 billion
    Q2 FY26

    Total capital returned to shareholders in Q2.

    Cash and Equivalents
    $4.1 billion
    Q2 FY26 end

    Balance of cash and equivalents at quarter end.

    Total Debt
    $42.5 billion
    Q2 FY26 end

    Total debt balance at quarter end.

    Leverage Ratio (Gross Debt to Adjusted EBITDA)
    3.6x
    Q2 FY26 end

    Leverage ratio based on gross debt to adjusted EBITDA.

    Leverage Ratio (Net Debt Basis)
    3.3x
    Q2 FY26 end

    Leverage ratio based on net debt.

    Acquisition Revenue Contribution
    $1.6 billion
    FY26

    Expected full-year revenue contribution from acquisitions, increased from previous guidance.

    Acquisition Adjusted EPS Contribution
    $0.32
    FY26

    Expected full-year adjusted EPS contribution from acquisitions, increased from previous guidance.

    Microbiology Divestiture Revenue Reduction
    $200 million
    FY26

    Expected reduction in 2026 revenue from the microbiology business divestiture, net of retained channel business.

    Microbiology Divestiture Adjusted EPS Reduction
    $0.05
    FY26

    Expected reduction in 2026 adjusted EPS from the microbiology business divestiture.

    Microbiology Divestiture Adjusted EPS Dilution
    $0.15
    First full year post-close

    Expected dilution to adjusted EPS in the first full year following the close of the divestiture.

    Organic Revenue Growth
    3%
    H1 FY26

    Organic revenue growth for the first half of the year.

    Organic Revenue Growth Expectation
    4%step up from H1
    H2 FY26

    Expected organic revenue growth for the second half of the year, with both Q3 and Q4 being similar.

    Industry KPIs

    10
    MetricValueDetails
    FCF conversion ROIC10.9%%
    Revenue EPS guidance—
    China revenue exposurelow single digits%
    Diagnostics testing demand—
    M a contribution synergies—
    Clinical research cro bookingsstrong organic growth
    Segment organic revenue growth—
    Bioprocessing orders book to billexcellent organic growth
    Reshoring US manufacturing tailwind—
    Organic core revenue growth by end market—

    Product announcements

    5
    ProductTypeDetails
    Thermo Scientific Orbitrap Tribrid Apex mass spectrometerlaunch
    Thermo Scientific Orbitrap Excedion mass spectrometerlaunch
    Thermo Scientific Vanquish Amplify UHPLC systemlaunch
    AI-powered software solutionsexpansion
    Applied Biosystems PowerFlex thermal cyclerlaunch

    Deals & partnerships

    4
    ClarioProvider of market-leading digital endpoint data solutions for clinical trials.

    Acquisition completed in late March. Integration is progressing smoothly, and the business delivered a strong Q2.

    Filtration and Separation business (from Solventum)Filtration and separation capabilities.

    Integration continues to progress well with positive customer feedback. Demand has been strong, and capacity is being increased.

    Precision Health Research SingaporeStrategic collaboration to support population health study.

    Combines Thermo Fisher's integrated proteomics capabilities, including Olink technology, with its Orbitrap Astral mass spectrometry platform.

    Undisclosed buyerDivestiture of microbiology business.

    Announcement in late April. Expected to close in the third quarter. The company will retain channel relationships and continue selling these products after the divestiture.

    Risks & headwinds

    3
    Microbiology business divestiture impactFY26 and first full year post-close

    Reduces 2026 revenue by ~$200 million and adjusted EPS by $0.05. Expected to be dilutive by ~$0.15 in the first full year post-close.

    Mitigation: Active management of the company; proceeds used for share repurchases to offset dilution.

    Foreign exchange rate headwindsH2 FY26

    $0.05 adjusted EPS headwind

    Mitigation: Incorporated into updated full-year guidance.

    Academic and Government market stabilizationOngoing

    Low single-digit growth in Q2, China segment muted.

    Mitigation: Capitalizing on areas of funding (e.g., chromatography and mass spectrometry innovation); not changing outlook for this segment yet, awaiting broader-based activity.

    What to watch in Q3 FY26

    5

    Academic and Government market recovery

    next quarter
    CurrentLow single-digit growth in Q2, U.S. slightly positive, China muted.
    TargetSustained broad-based positive trend.

    Why it matters

    Indicates broader market recovery beyond Pharma/Biotech, potential upside to current outlook.

    Academic and Government within China remains quite muted, not different than what we've seen, but not improving either.

    Q&A highlights

    7

    What are the key drivers behind the strengthening customer activity and broad-based beat, especially in Pharma and Biotech and Academic markets?

    Marc Casper confirmed broad-based strengthening, particularly in Pharma and Biotech, where spending is translating into revenue. Academic and Government also returned to growth, but the company remains cautious on calling a new trend for this segment, focusing on Pharma/Biotech as the primary driver of the improved outlook.

    “It's good to have a good quarter behind us and a strong first half. So when I think about our end markets, as the way you described, the customer activity actually picked up across our end markets.”

    asked by Michael Ryskin · answered by Marc Casper

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance and End Market Strengthening

    Thermo Fisher Scientific delivered an outstanding Q2 FY26, with revenue growing 10% to $11.99 billion and adjusted EPS up 13% to $6.03, significantly exceeding previous guidance. Customer activity strengthened across all end markets, including mid-single-digit growth in Pharma and Biotech, low single-digit growth in Academic and Government, mid-single-digit growth in Industrial and Applied, and mid-single-digit growth in Diagnostics and Health Care. This broad-based improvement positions the company well for the second half of the year.

    02

    High-Impact Innovation Driving Leadership

    The company showcased high-impact innovation with several new product launches. At the American Society of Mass Spectrometry conference, they introduced next-generation Orbitrap platforms and AI-driven capabilities, including the Orbitrap Tribrid Apex and Orbitrap Excedion mass spectrometers, designed to accelerate scientific discovery. Other innovations included the Vanquish Amplify UHPLC system for sensitive biological molecules and the Applied Biosystems PowerFlex thermal cycler for molecular biology labs, all complemented by expanding AI-powered software.

    03

    Strategic Collaborations and Bioprocess Expansion

    Thermo Fisher is enhancing its trusted partner status through strategic initiatives. A flagship U.S. bioprocess design center was opened in Massachusetts to foster collaboration with pharma and biotech customers, aiming to accelerate drug development and optimize manufacturing. Additionally, a strategic collaboration with Precision Health Research Singapore was announced to advance population health studies, leveraging integrated proteomics and Orbitrap Astral mass spectrometry for precision medicine.

    04

    Successful M&A Integration and Portfolio Management

    The company's disciplined M&A strategy is yielding positive results. The acquisitions of Clario and the Filtration and Separation business are integrating smoothly and performing well, contributing to the full-year outlook. Clario delivered a strong Q2, and the Filtration business is experiencing strong demand and increasing capacity. The announced divestiture of the microbiology business, expected to close in Q3, reflects active portfolio management, with anticipated proceeds used for share repurchases.

    05

    PPI Business System and CSR Progress

    The PPI Business System continues to drive operational excellence, contributing to strong profitability and free cash flow. The company is actively deploying AI to further accelerate PPI's impact. In CSR efforts, Thermo Fisher is progressing on its Net Zero roadmap, increasing renewable electricity use, expanding Zero Waste certified sites, and growing its STEM education programs to over 185,000 students annually, inspiring future innovators.

    06

    Bioprocessing Business Strength and Competitive Position

    The bioproduction business delivered a strong quarter with excellent organic growth, driven by differentiated capabilities across upstream and downstream workflows. Key technologies like DynaDrive single-use bioreactors are gaining standardization across the CDMO landscape, indicating efficient medicine production. The Filtration and Separation business is also performing well, with strong demand and plans for increased capacity, leveraging Thermo Fisher's commercial reach and customer relationships.

    AI-generated summary of the company’s earnings call. Not investment advice.