Q1 2024 Bruker Corp Earnings Call

Operator: Good morning, and welcome to the Bruker Corporation first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, listen to a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and one on your touch screen or telephone. To withdraw your question, you may press star and to. There's also a note that these events are being recorded. I'd now like to turn the floor over to Justin Ward, Senior Director of Investor Relations and Corporate Development. Please go ahead.

Good morning, and welcome to the broker Corporation first quarter 2024 earnings Conference call.

All participants will be in a listen only mode.

If you need assistance please spell.

By pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions.

I ask a question you May press star and one on your Touchtone telephone.

For all of your questions you May press Star two.

Please also note today's event is being recorded.

I'd now like to turn the floor over to Justin Ward Senior director of Investor Relations and corporate development. Please go ahead.

Justin Joseph Ward: Thank you, and good morning everybody. I would like to welcome everyone to Bruker Corporation's first quarter 2024 earnings conference call. My name is Justin Ward, and I am Bruker's Senior Director of Investor Relations and Corporate Development. Joining me on today's call are Frank Laukien, our President and CEO, and Gerald Herman, our Executive Vice President and CFO.

Justin Joseph Ward: Thank you and good morning, everybody.

Justin Joseph Ward: I would like to welcome everyone to broker Corporation's first quarter 2024 earnings Conference call. My name is Justin Ward and I am <unk> Senior director of Investor Relations and corporate development. Joining me on today's call are Frank <unk>, our president and CEO and Gerald Herman Our executive Vice President and CFO. In addition to the earnings release, we issued.

Justin Joseph Ward: In addition to the earnings release we issued earlier today, during today's conference call, we will be referencing a slide presentation that can be downloaded from the Events and Presentations section of Bruker's Investor Relations website. Additionally, during today's call, we will be highlighting non-GAAP financial information. Reconciliation of our non-GAAP to GAAP financial measures is included in our earnings release and is posted on our website at ir.bruker.com. Before we begin, I would like to reference Bruker's Safe Harbor Statement, which is shown on slide two of the presentation.

Justin Joseph Ward: Earlier today during today's conference call, we will be referencing a slide presentation that can be downloaded from the events and presentations section of brokers Investor Relations website.

Justin Joseph Ward: On today's call, we will be highlighting non-GAAP financial information reconciliation of our non-GAAP to GAAP financial measures are included in our earnings release and are posted on our website at IR <unk> com.

Justin Joseph Ward: Before we begin I would like to reference broker Safe Harbor statement, which is shown on slide two of the presentation.

Justin Joseph Ward: During this conference call, we will be making forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainty, including those related to our recent and pending acquisitions, geopolitical risks, and wars, as well as supply chain, logistics, and inflation. The company's actual results may differ materially from these statements. Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K for the period ending December 31, 2023.

Justin Joseph Ward: During this conference call, we will be making forward looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to our recent and pending acquisitions geopolitical risks in wars as well as supply chain logistics inflation.

Justin Joseph Ward: The company's actual results may differ materially materially from such statements factors that might cause such differences include but are not limited to those discussed in today's earnings release and in our Form 10-K for the period ending December 31st 2023.

Justin Joseph Ward: As updated by other SEC filings, which are available on our website and on the SEC website. Also, please note that the following information is based on current business conditions and our outlook as of today, May 2nd, 2024. You should not rely on these forward-looking statements as necessarily representing our views or outlooks as of any date after today. We will begin today's call with Frank providing an overview of our business progress. Gerald will then cover the financials for the first quarter of 2024 in more detail and share our updated 2024 financial outlook. Now, I'd like to turn the call over to Bruker's CEO, Frank Laukien. Thank you.

Justin Joseph Ward: And as updated by other SEC filings, which are available on our website and on the SEC web site.

Justin Joseph Ward: Also please note that the following information is based on current business conditions and to our outlook as of today May <unk> 2024, you should not rely on these forward looking statements as necessarily representing our views or outlook as of any date after today.

Justin Joseph Ward: We will begin today's call with Frank providing an overview of our business progress Gerald will then cover the financials for the first quarter of 2024 in more detail and share our updated 2024 financial outlook now I'd like to turn the call over to Burger CEO <unk> Keene.

Frank H. Laukien: Thank you, Justin. Good morning, everyone, and thank you for joining us on today's first quarter 2024 earnings call. I am excited to announce that we have just closed our Elitech acquisition on April 30th, ahead of schedule after we received all required regulatory clearances and also after the completion of the pre-closing carve-out of the ELITECH clinical chemistry business that we did not wish to acquire. Accordingly, please note that in addition to our earnings release, we simultaneously issued a second press release this morning, 7am Eastern, on the closing of our Elitech acquisition. We encourage you to read both press releases for complementary information and perspectives.

Frank: Thank you Justin good morning, everyone and thank you for joining us on today's first quarter 2024 earnings call.

Frank: I am excited to announce that we have just closed our Elisa <unk> acquisition on April 30th.

Frank: Schedule. After we received all required regulatory clearances.

Frank: And also after the completion of the pre closing carve out of the <unk> clinical chemistry business that we did not wish to acquire.

Frank: Accordingly. Please note that in addition to our earnings release.

Frank: Simultaneously you have issued a second press release this morning, seven a M. Eastern on the closing of our <unk> acquisition.

Frank: We do encourage you to read those press releases or complementary information and perspectives.

Frank H. Laukien: As a result, we are pleased to raise our constant exchange rate revenue growth guidance for fiscal year 2024 by $400 billion, to 12 to 14%, as explained in detail later during this call. Turning to our earnings release, and Slide 4. Bruker finished the quarter of 2024 with 1.6% organic and 5.5% constant exchange rate, or CER, revenue growth, despite about $15 million of revenue slippage into the second quarter, primarily and primarily because of a rather tough comparison to a very strong first quarter of 2023, in which, if you recall, we posted 17.6% organic growth a year ago.

Frank: As a result, we are pleased to raise our constant exchange rate revenue growth guidance for fiscal year 'twenty 'twenty four by 400 bibs.

Frank: To 12% to 14% as explained in detail later during this call.

Frank: Turning to our earnings release.

Frank: And slide four.

Frank: Our broker finished the quarter of.

Frank: So I need 24, with one 6% organic.

Frank: And five points, 5% constant exchange rate or see our revenue growth despite about 15 million of.

Frank: Revenue slippage into the second quarter.

Frank: Primarily and primarily because of a rather tough comparison to a very strong first quarter of 2023 in which if you recall, we posted 17, 6% organic growth a year ago.

Frank H. Laukien: So keep in mind that we had expected low single-digit organic revenue growth anyway in Q1 because of some pull forward of about 15, similar pull forward of about 15 million dollars of revenues into the fourth quarter of 23, when customer side readiness and shipments just worked very well. So, underlying demand for Bruker's products and solutions has remained solid with first quarter 24 booked to build for our BSI segment just below 1.0.

Frank: So keep in mind that we had expected low single digit organic revenue growth anyway in Q1, because of some pull forward of about 15, similar pull forward of about $15 million of revenues.

Frank: Into the fourth quarter of 'twenty, three when customer site readiness and shipments just worked very well so.

Frank: Underlying demand for brokerage products and solutions has remained solid with first quarter 'twenty four book to Bill for our BSI segment, just below one point, though.

Frank H. Laukien: So in the second quarter of 2024, we expect a reacceleration of our organic revenue growth. We also expect double-digit constant exchange rate or CER revenue growth year over year. As expected, in the first quarter of 24, our margins compressed year over year, primarily because of the tough comparison to an unusually strong first quarter of 23, but also as a result of transitory factors, such as the expected initial margin dilution from our recent acquisitions, as well as a less favorable mix in this quarter.

Frank: So in the second quarter of 2024, we expect a reacceleration of our organic revenue growth and we also expect double digit constant exchange rate or see our revenue growth year over year.

Frank: As expected in the first quarter, a 24 hour margins compressed year over year, primarily because of the tough comparison to an unusually strong first quarter of 'twenty three but also as a result of transitory factors such as the expected initial margin dilution from a REIT.

Frank: And the acquisitions.

Frank: As well as less favorable mix in this quarter.

Frank H. Laukien: We expect significant sequential margin improvement in the remainder of the year. As we look to the remainder of 2024, with our solid backlog and pipeline, we expect to achieve above-market organic revenue and organic non-GAAP EPS growth. Accordingly, we are maintaining our fiscal year 24 guidance for organic revenue growth of 5% to 7%. Since our prior guidance in mid-February, we have closed the CHEMSPEED acquisition in the first quarter and now the ELITEC acquisition on April 30th. Both are now included in our updated guidance today.

Frank: We expect significant sequential margin improvement in the remainder of the year.

Frank: As we look to the remainder of 2024 with our solid backlog and pipeline, we expect to achieve above market organic revenue and organic non-GAAP EPS growth.

Frank: Accordingly, we are maintaining our fiscal year 'twenty for guidance for organic revenue growth of 5% to 7%.

Frank: Since our prior guidance in mid February we have closed the Kevin speed acquisition in the first quarter and now the <unk> acquisition on April 30th.

Frank: Both are now included in our updated guidance today.

Frank H. Laukien: As a result, we are increasing our reported revenue guidance by $60 million, for reported revenue growth of 11 to 13% year over year. Additionally, we are increasing our non-GAAP EPS guidance by 8 cents, to 8% to 10% non-GAAP EPS growth year over year. Please note that our updated May 2nd guidance today does not yet include the pending nanostring acquisition, which is expected to be EPS dilutive and which we hope to close in the second quarter.

Frank: As a result, we are increasing our reported revenue guidance by $60 million.

Frank: For reported revenue growth of 11% to 13% year over year.

Frank: And we are increasing our non-GAAP EPS guidance by <unk> eight cents.

Frank: Two 8% to 10% non-GAAP EPS growth year over year.

Frank: Okay.

Frank: Please note that our updated may 2nd guidance today.

Frank: Not yet include the pending nano string acquisition, which is expected to be EPS dilutive.

Frank: And which we hope to close in the second quarter.

Frank H. Laukien: For further information on the pending NanoString acquisition, I refer you to our press release issued on Monday, April 22nd. Continuing on slide four, Bruker's first quarter 24 reported revenues increased 5.3% year-over-year to $721.7 million, which included an M&A tailwind of 3.8%. On an organic basis, revenues increased 1.6%, which included flat organic revenues in our BSI segment and 18.9% organic growth at best. Net of Intercompany Eliminations, the FX hit headwind was minor at 0.1%. This all implies constant exchange rate or CER revenue growth of 5.5% year over year. Our first quarter 2024 non-GAAP operating margin was 14.0%. Down 630 bits.

Frank: For further information on the pending nano stirring acquisition.

Frank: For you to our press release issued on Monday April 20 seconds.

Frank: Continuing on slide four brokers first quarter 'twenty four reported revenues increased five 3% year over year to $721 7 million, which included an M&A tailwind of three 8%.

Frank: On an organic basis revenues increased one 6%.

Frank: Which included flat organic revenues in our BSI segment.

Frank: And 18, 9% organic growth at best.

Frank: Net of intercompany eliminations.

Frank: Yes exit headwind headwind was minor at <unk>, 1%.

Frank: This is all implies constant exchange rate or see our revenue growth of five 5% year over year.

Frank: Our first quarter 2024, non-GAAP operating margin was 14.0% down.

Frank: <unk> thousand 630 bps due to the factors that I described earlier.

Frank H. Laukien: Due to the factors that I described earlier, in the first quarter of 24, Bruker reported GAF diluted EPS of $0.35, compared to $0.52 in the first quarter of 2023, on a non-gap basis. First quarter 24 diluted EPS was 53 cents, down from $0.64 in the first quarter of 2023. Now, please turn to slides five and six now, where we highlight the first quarter 24 CER performance by our three scientific instruments groups and our best segments all year over year.

Frank: In the first quarter of 'twenty, four Brooke reported GAAP diluted EPS of <unk> 35 cents compared with 52 cents in the first quarter of 'twenty three.

Frank: On a non-GAAP basis.

Frank: First quarter 'twenty four diluted EPS was <unk> 53 cents.

Frank: Down from 64 cents in the first quarter up 23.

Frank: Right. Please turn to slides five and six now where we highlight the first quarter 'twenty four CER performance by our three scientific instruments groups and of our best segment all year over year.

Frank H. Laukien: In the first quarter of 24, Biosmin Group revenue was $183 million, with low single-digit percentage CER growth. Biospins saw growth across biopharma, academic government, and Industrial Research Markets, without any gigahertz class system in Q124 revenue. By the way, in 2024, we expect revenue from three gigahertz-class NMRs, including one in the second quarter. We also closed the ChemSpeed Lab automation acquisition, and we will be talking about that further in the future when we update you on our medium-term targets.

Frank: In the first quarter of 'twenty four biased Big group revenue was $183 million with low single digit percentage CER growth.

Frank: <unk> saw growth across Biopharma academic government and industrial research markets.

Frank: Without any gigahertz class system in Q1 'twenty for revenue.

Frank: By the way in 'twenty 'twenty four we expect revenue from three gigahertz class Nm lawyers, including one in the second quarter.

Frank: We also closed the Kevin speed lab automation acquisition.

Speaker Change: And we will be talking about that.

Speaker Change: Further in the future when we update you on our medium term targets.

Frank H. Laukien: Moving on to Calit and Q124, our Calit group had revenue of $228 million, and its CER declined by a low single-digit percentage, primarily due to the timing of shipments slipping from Q1 into Q2, as well as to tough comps in the prior year first. On slide six.

Frank: Moving on to <unk> in Q1, 'twenty four our colleague group had revenue of $228 million and it's C yard declined in the low single digit percentage, primarily to the timing of shipments slipping from Q1 into Q2 as well as to tough comps in the prior year first quarter.

Frank: Okay.

Frank: On slide six.

Frank H. Laukien: Q124 Bruker Nano revenue was $240 million, and Nano achieved CER revenue growth in the mid-teens percentage. Strong Revenue Growth in Academic Government, ECAGOV, Industrial, and Semiconductor Metrology. The artificial intelligence or AI megatrend continues to be a tailwind for our semiconductor metrology and advanced packaging tools.

Frank: Q1, 'twenty four broker nano revenue was $240 million and nano achieved CER revenue growth in the mid teens percentage with strong revenue growth in academic government ACA Gov, industrial and semiconductor metrology.

Frank: The artificial intelligence or AI Mega trends continues to be a tailwind for our semiconductor metrology and advanced packaging tools business.

Frank: Finally.

Frank H. Laukien: Q1 2024 best CER revenues grew in the high teens percentage, net of intercompany eliminations, driven by solid superconductor demand, as well as growth in big science and fusion research projects and our emerging key extreme UV or EUV technologies for semiconductor lithography tools by very large OEM customers, also in support of strong AI demand. Let me take a quick excursion from the financials to a couple of further product introductions on slides 7 and 8.

Frank: Q1 24 beds.

Frank: <unk> revenues grew in the high teens percentage net of intercompany eliminations, driven by solid superconductor demand as well as by growth in Big Science, and fusion research projects and our emerging key extreme UV or <unk> technologies for semi.

Frank: Conductor lithography tools by a very large OEM customers also in support of strong AI demands.

Speaker Change: Let me take a quick excursion from financials to a couple of further product introductions on slide seven and eight.

Frank H. Laukien: At US UFO in the first quarter, we continued with 40 proteomics tools and workflows and software. And in this here, we highlight both immunoceptidomes, which are very important in immuno-oncology, and separately glycoproteomics, of course, all with the 4D versions that we do on our Timstuff platform. And without going into a lot of details here, both of them are excellent examples of things that are not templated in They are not in our genes, at least not in any way that we know.

Speaker Change: At Usu Po in the first quarter.

Speaker Change: Continued with 40, proteomics tools and workflows and software and in this year, we highlight both immuno tested dose which are very important in immuno oncology.

Speaker Change: And separately glycoprotein all mix of course always a four D versions that we do on our Tim stopped platform.

Speaker Change: And without going into a lot of details here are both of them are excellent. Examples of things that are not translated in the DNA. They are not in our genes at least not in any way that we know so they are excellent examples of additional post genomic information that is absolutely needed to understand.

Frank H. Laukien: So they're excellent examples of additional post-genomic information that is absolutely needed to understand biology and disease biology. And we are a leader on that same TIMSTOP platform in 40 proteomics and its applications. Two examples that are both quite important in immunopeptidomics and for the glycoprotein.

Speaker Change: Biology, and disease biology, and we are a leader on that St. James hub platform in 40, proteomics and its applications. The two examples that are kept both quite important in immuno kept it all mix and for the glycoprotein Alex.

Frank H. Laukien: The other examples are from product introductions that we had at our recent, most important NMR conference of the year, the ENC, which was actually in April in California, and we introduced both new enabling scientific capabilities for New Scientific Capabilities in Structural Biology, particularly for membrane proteins, of aggregates, many membrane proteins are important targets or signaling proteins. They're there, by the way; they're also not something that AlphaFold or CryoEM or Crystallography handle very well.

Speaker Change: The other examples are from product introductions that we had at our recent most important MMR conference of the year. The E M C, which was actually in April in California.

Speaker Change: And we introduced both the new enabling scientific capabilities for new scientific capabilities in structural biology, particularly of membrane proteins of aggregates.

Speaker Change: Many membrane proteins are important targets or are signaling proteins and thereby the way theyre also.

Speaker Change: Not something that alpha fold or cry, OEM or crystallography handle very well. They are one of the very important areas, where <unk> plays a crucial role and again without scientific details, having ultra fast spinning probes give us much higher resolution for things that could never be seen before bioscience.

Frank H. Laukien: They're one of the very important areas where NMR plays a crucial role. And again, without scientific details, having ultra fast spinning probes gives us much higher resolution for things that could never be seen before by scientists, and a separate introduction of a technology for DNP, which stands for dynamic nuclear polarization, can increase sensitivity for some of these methods, in fact, by factors off the order of 100. So it's really game-changing and enabling.

Speaker Change: Yes.

Speaker Change: And a separate.

Speaker Change: Introduction of the technology for DSP, which stands for dynamic nuclear polarization can increase sensitivity for some of these methods in fact by factor resolved. The order of 100, so it's really game changing and enabling.

Frank H. Laukien: On the other hand, we also want to broaden the adoption of NMR and make it much more accessible. A really wonderful new magnet, introduction is this Ascend Evo 600 NMR magnet with a one-year helium hold time. This is more than double from before, so it's quite a technological marvel and again, I think it'll be warmly welcomed by all existing NMR labs but also new labs, in biopharma research, in clinical metabolism, and clinical research, where previously they hadn't handled NMR but would like to use it, making it much more accessible and available for broader markets.

Speaker Change: On the other hand, we also want to make broadened the adoption of <unk> and make it much more accessible.

Speaker Change: A really wonderful new magnet.

Speaker Change: Introduction is this ascend Evo 600 in EMR magnet with a one year helium hold time. This has more than doubled from before so it's quite a technological Marvel and again I think it'll be warmly welcomed by all existing LMR labs, but also the new labs in Biopharma research in clinical Midtown.

Speaker Change: Elizabeth clinical research, where previously they hadn't handled at EMR, but we'd like to use it makes it much more accessible and available for broader markets and last but not least for biotech biotech and pharma biopharma process analytical integration or Pat integration. The four year 80, which is our.

Frank H. Laukien: And last but not least, for biotech and biopharma process analytical integration or path integration, the Fourier 80, which is our non-cryogenic benchtop FDNMR, if you recall, has now been more broadly available in this biopharma QC world.

Speaker Change: Our non cryogenic benched up SDN EMR. If you recall has now been moderate more broadly available for this biopharma Q seaworld all very very good.

Speaker Change: Developments on which we want to update you from time to time.

Frank H. Laukien: All very, very good developments on which we want to update you from time to time. Now, in summary, and as I wrap up my remarks, Bruker delivered solid constant exchange rate growth, albeit with weaker margins and EPS in the first quarter of 2024. We will accept some margin and EPS solutions from our acquisitions in 2024 because we have been able to acquire several strategically very important businesses at reasonable valuations. We expect that our Bruker management process applied to these acquired businesses will significantly improve their financial performance over time and drive their long-term profitable growth.

Speaker Change: Now in summary, and as I wrap up my remarks brokerage delivered solid constant exchange rate growth, albeit with weaker margins and EPS in the first quarter of 2024.

Speaker Change: We accept some margin and EPS dilution from our acquisitions in 2024, because we haven't been able to acquire several strategically very important businesses at reasonable valuations.

Speaker Change: We expect that our broker management process apply to these acquired businesses will significantly improve their financial performance over time and drive their long term profitable growth.

Speaker Change: We anticipate also that these strategic acquisitions will enable strong returns on invested capital or ROIC in the future something that is important to brokers business culture of disciplined entrepreneurial listen and also for long term shareholder value creation.

Frank H. Laukien: We anticipate also that these strategic acquisitions will enable strong returns on invested capital or ROICs in the future, something that is important to Bruker's business culture of disciplined entrepreneurialism and also for long-term shareholder value creation. So with those comments, let me turn the call over to our Chief Financial Officer, Gerald Herman, who will review Bruker's first quarter financial performance in more detail and provide our updated fiscal year 24 guidance and assumptions. Thank you for your

Speaker Change: So with those comments, let me turn the call over to our Chief Financial Officer, Gerald Herman who will review brokers first quarter financial performance in more detail and provide our updated fiscal year 'twenty for guidance and assumptions Gerald thank.

Gerald N. Herman: Thank you, Frank, and thank you, everyone, for joining us today. I'm pleased to provide some more detail on Bruker's first quarter 2024 financial performance, starting on slide 10, which shows the revenue bridge for the first quarter of 2024. Revenue was up $36 million, 5.3%, reflecting organic growth of 1.6%. Acquisitions added 3.8% to our top line, while foreign exchange was a 0.1% headwind, resulting in constant exchange rate revenue growth of 5.5% year over year. Frank has already covered the drivers of revenue growth for the quarter.

Gerald N. Herman: Thank you Frank and thank you everyone for joining us today I'm pleased to provide some more detail on brokers first quarter 2024 financial performance starting on slide 10.

Gerald N. Herman: Shows the revenue bridge for the first quarter of 2024.

Gerald N. Herman: Revenue was up $36 million or $5, three spend reflecting organic growth of one 6%.

Gerald N. Herman: Acquisitions added three 8% toward top line, while foreign exchange was a 0.1% headwind, resulting in constant exchange rate revenue growth of five 5% year over year.

Gerald N. Herman: Frank has already covered the drivers of revenue growth for the quarter.

Gerald N. Herman: Geographically and on an organic basis, in the first quarter of 2024, America's revenue grew in the mid-single-digit percentage, European revenue grew in the high single-digit percentage, and Asia Pacific revenue declined in the single-digit percentage range, primarily due to softness in Japan, all year over year.

Gerald N. Herman: Geographically and on an organic basis in the first quarter of 2020 for our Americas revenue grew in the mid single digit percentage.

Gerald N. Herman: European revenue grew in the high single digit percentage Asia Pacific revenue declined in the single digit percentage range, primarily due to softness in Japan, all year over year for.

Gerald N. Herman: For our EMEA region, first quarter 2024 revenue was up mid-teens percentage year over year. Slide 11 shows our Q1 2024 P&L performance on an on-gap basis. Non-GAAP gross margin of 51.2%, decreased 220 basis points from 53.4% in the first quarter of 2023, impacted primarily by NICs, acquisition and FX headwinds, and a challenging prior year calm. First quarter 2024 non-GAAP operating margin of 14.0%, 630 basis points lower than the 20.3% margin we posted in the first quarter of 23. This decline is attributable to most of the same factors impacting gross margin, product mix, acquisition, and foreign exchange headwinds, and a challenging prior year comp.

Gerald N. Herman: For our EMEA region first quarter 2024 revenue was up mid teens percentage year over year.

Gerald N. Herman: Slide 11 shows our Q1 2024 P&L performance on a non-GAAP basis.

Gerald N. Herman: non-GAAP gross margin of 51, 2% decreased 220 basis points from 53, 4% in the first quarter of 'twenty, three impacted primarily by mix acquisitions, and FX headwinds and a challenging prior year comp.

Gerald N. Herman: First quarter 2024, non-GAAP operating margin of 14.0% with 630 basis points lower than the 23% margin we posted in the first quarter of 'twenty three.

Gerald N. Herman: This decline is attributable to most of the same factors impacting gross margin product mix acquisition, and foreign exchange headwinds and a challenging prior year comp.

Gerald N. Herman: We expect Bruker's non-GAAP operating margins to improve sequentially in the second quarter and significantly in the second half of 2024. For the first quarter of 2024, our non-GAAP effective tax rate was 26.7%, a modest improvement from the 27.8% in the first quarter of 2023, resulting from favorable jurisdictional mix. Weighted average diluted shares outstanding in the first quarter of 2024 were $145.9 million, a reduction of 1.7 million shares, or 1.2% from the first quarter of 2023, resulting from our share repurchase.

Gerald N. Herman: We expect brokers non-GAAP operating margins to improve sequentially in the second quarter and significantly in the second half of 2024.

Gerald N. Herman: For the first quarter of 2024, our non-GAAP effective tax rate was 26, 7% a modest improvement from the 27, 8% in the first quarter of 'twenty, three resulting from favorable jurisdictional mix.

Gerald N. Herman: Weighted average diluted shares outstanding in the first quarter of 2020 for $145 9 million a reduction of $1 7 million shares or one 2% from the first quarter of 'twenty, three resulting from our share repurchases.

Gerald N. Herman: Finally, Q1 2024 non-GAAP EPS of 53 cents was down 17.2% compared to the first quarter of 2023, primarily due to the margin compression factors previously detailed. Additionally, we experienced about five cents of non-GAAP EPS dilution from the Bruker Cellular Analysis, formerly Phenomex, acquisition in the first quarter of 2024. With the right sizing actions we've already taken, we expect our BCA business to reach break-even by 2026. We generated $21.8 million of operating cash flow in the first quarter of 2024.

Gerald N. Herman: Finally, Q1, 2024, non-GAAP EPS of <unk> 53 cents was down 17, 2% compared to the first quarter of 2023, primarily due to the margin compression factors previously detailed.

Gerald N. Herman: We experienced about five cents and non-GAAP EPS dilution from the broker cellular analysis formally frenum ex acquisition in the first quarter of 2024.

Gerald N. Herman: With the right sizing actions, we've already taken we expect our BCA business to reach breakeven by 2026.

Gerald N. Herman: We generated $21 $8 million of operating cash flow in the first quarter of 2024.

Gerald N. Herman: Our capital expenditure investments were $21.4 million, resulting in free cash flow of $0.4 million in the first quarter of 2024. This reflects a decrease in cash flow of approximately $62.1 million in Q1 of 2023 driven by lower net income and higher working capital levels, mostly impacted by our recent acquisitions. We finished the first quarter with cash, cash equivalents, and short-term investments of approximately $340 million.

Gerald N. Herman: Our capital expenditure investments were $21 $4 million, resulting in free cash flow of zero point $4 million in the first quarter of 2024.

Gerald N. Herman: This reflects a decrease in cash flow of approximately $16 $1 million over Q1 of 'twenty three driven by lower net income and higher working capital levels, mostly impacted by our recent acquisitions.

Gerald N. Herman: We finished the first quarter with cash cash equivalents and short term investments of approximately $340 million.

Gerald N. Herman: During the first quarter, we used cash to fund acquisitions, capital expenditures, and select Project Accelerate 2.0 initiatives. In the first quarter of 2024, we completed a series of debt financing actions to fund our recent acquisitions, including the larger Allitech transaction. We upsized a revolving credit facility to $900 million, issued 431 million Swiss francs of private placement senior notes with 10, 12, and 15-year maturities at average interest rates of about 2.6 percent, and closed on a 450 million Swiss franc turn loan structure with 5, 7, and 10-year maturities carrying interest rates of about 3 percent.

Gerald N. Herman: During the first quarter, we used cash to fund acquisitions capital expenditures and select project accelerate to doto initiatives.

Gerald N. Herman: In the first quarter of 2024, we completed a series of debt financing actions to fund our recent acquisitions, including the larger Alphatec transaction.

Gerald N. Herman: We upsized, our revolving credit facility to $900 million.

Gerald N. Herman: Issued 431 million Swiss franc private placement senior notes with 10, 12, and 15 year maturities at average interest rates of about two 6% and closed on a 450 million Swiss franc term loan structure with five seven and 10 year maturities carrying the interest rates of about 3%.

Gerald N. Herman: Yeah.

Gerald N. Herman: These financings provide us with flexibility to support strategic acquisitions like Elitech and our pending NanoString acquisition and DeLever over time. Turning now to slide 14, we are maintaining our Organic Revenue Growth Guidance and Organic Non-Gap EPS prior guidance from February 13-24. We're updating our 2024 outlook to include the recently closed acquisitions of Alatec and ChemSped, as well as changes in foreign currencies. However, it does not include the pending NanoString acquisition, which was covered in our April 22 press release.

Gerald N. Herman: These financings provide us with flexibility to support strategic acquisitions, like <unk>, and our pending nano string acquisition and de lever over time.

Gerald N. Herman: Turning now to slide 14, we are maintaining our organic revenue growth guidance and organic non-GAAP EPS prior guidance from February 13th 24.

Gerald N. Herman: We're updating our 2024 outlook to include the recently closed acquisitions of Alphatec and Chem speed as well as changes in foreign currency.

Gerald N. Herman: It does not include the pending nano string acquisition, which was covered in our April 22nd press release.

Gerald N. Herman: Our updated guidance for reported revenue is $3.29 to $3.35 billion, up $60 million from prior guidance, representing growth of 11 to 13% compared to 2023. As noted earlier by Frank, this guidance maintains our full year 24 organic revenue growth of 5 to 7% year over year. It also reflects an estimated foreign currency headwind of about 1% and acquisitions contributing now about 7% to revenue growth year over year.

Gerald N. Herman: Our updated guidance for reported revenue is $3 two nine to 335 billion up $60 million from prior guidance representing growth of 11% to 13% compared to 2023.

Gerald N. Herman: As noted earlier by Frank This guidance maintains our full year 'twenty for organic revenue growth of 5% to 7% year over year.

Gerald N. Herman: It also reflects an estimated foreign currency headwind of about 1% and acquisitions contributing now about 7% to revenue growth year over year.

Gerald N. Herman: This guidance now implies constant exchange rate, CER revenue growth of 12 to 14% in full year 2024 year over year. For non-GAAP operating margins in 2024, following strong organic operating improvement of about 130 basis points in 2023, we expect 2024 organic operating margin improvement of about 50 basis points. For non-GAAP operating margins all in, we expect about a 60 basis point decline from the prior year due to a combined acquisition and foreign exchange headwind of about 110 basis points.

Gerald N. Herman: This guidance now implies constant exchange rate CER revenue growth of 12% to 14% in full year 2024 year over year.

Gerald N. Herman: For non-GAAP operating margins in 2024, following strong organic operating improvement of about 130 basis points. In 2023, we expect 2020 for organic operating margin improvement of about 50 basis points.

Gerald N. Herman: For non-GAAP operating margins all in we expect about a 60 basis point decline from the prior year due to a combined acquisition and foreign exchange headwind of about 110 basis points.

Gerald N. Herman: As we explained in the simultaneous Elitech closing press release this morning, we expect Elitech to be immediately accretive to Bruker margins. On the bottom line, we're now guiding to non-GAF EPS for 2024 in a range of $2.79 to $2.84, up $0.08 from the accretive ELITEC acquisition. This translates to non-GAAP EPS growth guidance of 8 to 10% compared to 2023. Other guidance assumptions are listed on the slide.

Gerald N. Herman: As we explained in the simultaneous Ela check closing press release. This morning, we expect <unk> to be immediately accretive to broker margins.

Gerald N. Herman: On the bottom line, we're now guiding to non-GAAP EPS for 2024 in a range of $2 79 to $2 84 up <unk> from the accretive <unk> acquisition.

Gerald N. Herman: This translates to non-GAAP EPS growth guidance of 8% to 10% compared to 2023.

Gerald N. Herman: Other guidance assumptions are listed on the slide.

Gerald N. Herman: Our fiscal year 2024 ranges have been updated for foreign currency rates as of March 31st, 2024. One additional note on quarterly phasing for the year; we expect second quarter organic revenue to be up mid single digits organically year over year. We also expect to see sequential improvement in non-GAAP operating margin performance in the second quarter of 2024 and significant improvement in the second half of 2024. We expect to host a follow-up call with investors and sell-side analysts within a few weeks after the closing of our NanoString acquisition.

Gerald N. Herman: Our fiscal year 2024 ranges have been updated for foreign currency rates as of March 31, 2024.

Gerald N. Herman: One additional note on quarterly phasing for the year we.

Gerald N. Herman: We expect second quarter organic revenue to be up mid single digits organically year over year.

Gerald N. Herman: We also expect to see sequential improvement in non-GAAP operating margin performance in the second quarter of 2024 and significant improvement in the second half of 2024.

Gerald N. Herman: We expect to host a follow up call with investors and sell side analysts within a few weeks after the closing of our nano stirring acquisition <unk>.

Gerald N. Herman: During this call, we plan to provide additional information on our recent significant acquisitions, including ChemSpeed, Allotech, and NanoString, and update our medium-term outlook for fiscal year 2026 financial targets. Finally, I echo Frank's earlier comments on the importance of these recent acquisitions. While we expect some margin dilution initially from certain acquisitions, these are excellent additions to complement the portfolio transformation underway at Bruker and are expected to contribute solid, profitable growth and strong ROIC performance to our shareholders over the next few years.

Gerald N. Herman: During this call we plan to provide additional information on our recent significant acquisitions, including Kevin speed, Alphatec and nano string and update our medium term outlook for fiscal year 2026 financial targets.

Gerald N. Herman: Finally, I Echo Frank's earlier comments on the importance of these recent acquisitions.

Gerald N. Herman: While we expect some margin dilution initially from certain acquisitions. These are excellent additions to complement the portfolio transformation underway at broker and expected to contribute solid profitable growth and strong ROIC performance to our shareholders over the next few years.

Gerald N. Herman: To wrap up, Bruker delivered solid constant exchange rate revenue growth in the first quarter of 2024 and was well positioned to deliver above market revenue growth and organic non-GAAP EPS growth in 2024. With that, I'd like to turn the call over to Justin to start the Q&A section. Thank you very much.

Gerald N. Herman: To wrap up broker delivered solid constant exchange rate revenue growth in the first quarter of 2024, and we are well positioned to deliver above market revenue growth and organic non-GAAP EPS growth in 2024.

Gerald N. Herman: With that I'd like to turn the call over to Justin to start the Q&A section. Thank you very much. Thank you Gerald I'd now like to turn the call over to the operator to begin the Q&A portion of the call as a reminder to allow everyone time for questions. We ask that you limit yourself to one question and one follow up.

Justin Joseph Ward: Thank you, Gerald. I'd now like to turn the call over to the operator to begin the Q&A portion of the call. As a reminder, to allow everyone time for questions, we ask that you limit yourself to one question and one follow-up. Operator, we're ready for the Q&A portion.

Speaker Change: Operator, we're ready for the Q&A portion.

Operator: We will now begin that question-and-answer session. To join the question queue once again, you may press the star and then one. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the key. To withdraw your question, you may press star and two. At this time, we will pause momentarily to assemble the roster. Our first question today comes from Panit Suda from Lerang Partners. Please go ahead with your questions.

Speaker Change: We will now begin the question and answer session to join the question queue. Once again, you May Press Star then one.

Speaker Change: If you are using a speaker phone, we do ask that you. Please pick up the handset prior to pressing the keys.

Speaker Change: And with your all your questions you May press star into.

Speaker Change: At this time, we will pause momentarily to assemble the roster.

Speaker Change: Our first question today comes from Puneet <unk> from Leerink Partners. Please go ahead with your question.

Frank H. Laukien: Frank, Gerald, thanks for taking the questions. My first one is on the revenue slippage you talked about. Is that just a pull forward into 4Q23 and thus not expected going forward? And just overall, with the mid single-digit expectations for the second quarter, can you just elaborate on what you're seeing in terms of the overall demand, your ability to deliver from the backlog, and any bookings growth that you can talk about? And then I have a follow-up question.

Gerald N. Herman: Hi.

puneet: Frank Gerald Thanks for taking the questions.

puneet: My first one is.

puneet: On the revenue slippage you talked about it is that just a pull forward into <unk> into the <unk> 23, and thus not expected.

Speaker Change: Going forward.

Speaker Change: And just overall with the mid single digit expectations for the second quarter can you just elaborate what youre seeing in terms of the overall demand your ability to deliver from the backlog and any bookings growth that you can talk about and then I have a follow up.

Frank H. Laukien: Yeah, thank you, Puneet. It's Frank.

Speaker Change: Yes. Thank you puneet, it's Frank so yes, as you recall, our Q4 of last year was with.

Frank: It was strong even stronger than we had expected usually something slip into Q1 and all the site readiness and export permits I mean, it was near nearly everything went flawlessly and so yes, we had with that we had already expected a low single digit organic revenue growth for Q.

Frank: One that we had signaled that previously and then it was a little lower than we would have liked with about 15 million that's slipping into Q2.

Frank H. Laukien: So yeah, as you recall, our Q4 of last year was strong, even stronger than we had expected. Usually, something slipped into Q1, and all the site readiness and export permits. I mean, it was near, nearly everything went flawlessly. And so, with that, we had already expected a low single-digit organic revenue growth for Q1. And we had signaled that previously.

Frank H. Laukien: Which is what we acknowledged here.

Frank H. Laukien: Essentially no risk of any of that getting canceled that will come in in Q2. Those were you know the usual export permit site readiness or sometimes some logistical issues that our system does not go in but there is no risk issue and it's not a reflection of any demand with that we ended up at the one 6% organic growth, which is a bit weaker than.

Frank H. Laukien: And then it was a little lower than we would have liked with about 15 million that's slipping into Q2, which is what we acknowledged here. There's essentially no risk of any of that getting canceled that will come in in Q2. Those were, you know, the usual export permits, site readiness, or sometimes, you know, some logistical issue that the system does not go into.

Speaker Change: We would have liked.

As always it's best to look at broker as a as an average over several quarters and I think we'll have a decent mid single digit or perhaps better Q2 organic revenue growth and <unk>.

Frank H. Laukien: Expect double digit CER growth in the second quarter. So that's the cadence.

Frank H. Laukien: But there's no risk issue, and it's not a reflection of any demand. With that, we ended up at 1.6% organic growth, which is a bit weaker than we would have liked. But as always, it's best to look at Bruker as an average over several quarters. And I think we'll have a decent mid single-digit or perhaps better Q2 organic revenue growth and expect double-digit CR growth in the second quarter. So that's the rhythm.

Frank H. Laukien: Got it. It's super helpful.

Speaker Change: Got it.

Speaker Change: Very helpful and then.

Frank H. Laukien: Frank.

Speaker Change: Can't recall, a time when broker had.

Frank H. Laukien: And then, Frank, I mean, I can't recall a time when, you know, Bruker had these many number of acquisitions in such a short period of time. So, you know, look, first of all, it's great to see, you know, you picking up a number of these excellent technologies for the post genomics era that you've talked about, you know, but two questions that investors are struggling with, you know, when we look at what do these acquisitions mean for, you know, potential dilution, and I know you're going to talk about that on the follow up call, but any sort of directional read that you can provide us on into how to think about these in 2025.

Frank H. Laukien: These many number of acquisitions in such a short period of time. So look first of all it's great to see.

Frank H. Laukien: Picking up a number of these excellent technologies for the post genomics era that you've talked about.

Frank H. Laukien: Two questions that investors are struggling Linda.

Frank H. Laukien: We look at.

Frank H. Laukien: What are these acquisitions mean for.

Frank H. Laukien: Potential dilution and I know you're going to talk about that on the follow up call, but any sort of directional read that you can provide us on how to think about these in 2025 and then.

Frank H. Laukien: And then, you know, more importantly, I mean, if you could elaborate a bit on how your plans are looking in terms of integration priorities, because it does seem like there's a significant undertaking versus what Bruker might have done in the past, and that is likely to have some impact on inorganic growth and EPS in the near term and medium term as well. So maybe you could just talk to us about integration and how you're thinking about that.

Frank H. Laukien: More importantly, I mean, if you could elaborate a bit on how.

Frank H. Laukien: Your plants are looking in terms of priorities.

Frank H. Laukien: Because it does seem like there's a significant.

Frank H. Laukien: Undertaking versus what broker might have done in past and that is likely to have some impact on the inorganic.

Frank H. Laukien: And EPS in the near term and medium term as well so maybe just talk to us about the integration and how are you thinking about that.

Frank H. Laukien: Yeah, so I'll sort of do it in reverse order. Puneet, we're actually very confident about the integration and that we have the bandwidth to do this. It turns out, because we have three very strong groups, plus VEST, we really have the management capacity and the integration capacity of almost three companies. I mean, obviously, we're one company, but it turns out the Elitech business and a number of these smaller acquisitions that were done by our Bruker Optics division previously, that's all within Caled, and they're handling that really, except for financing and some high-level corporate matters, really Ken Speed, and some of the software acquisitions that you've seen recently are very much part of the Biospin group. So we really have a separate group.

Speaker Change: Yeah, so sort of do it in reverse order puneet, we're actually very confident on the integration and as we have the bandwidth to do this.

Frank H. Laukien: It turns out because we are we have three very strong groups plus best we really have.

Frank H. Laukien: The management capacity and integration capacity.

Frank H. Laukien: As if we were almost three companies I mean, obviously, we're one company EBIT, but it turns out the <unk> business in a number of these smaller acquisitions that were done by our broker optics Division previously that's all within college, and they're handling that really except for financing.

Frank H. Laukien: Some high level corporate matters, really very very focused and they're and I'm convinced they're going to handle that very well and they're handling very well the smaller ones that they've done already Ken.

Frank H. Laukien: Ken speed and.

Frank H. Laukien: And some of the software acquisitions that you've seen recently are very much part of the bio spin groups. So we have a really a separate group, it's kind of a modular setup, where they're pursuing that and really are doing a great job with that so again.

Frank H. Laukien: It's kind of a modular setup where they're pursuing that and really are doing a great job with that. So again, it's not that these things are all piling up on us, except at the highest level, where we provide the strategic direction and the support and the financing, of course, and ultimately, and that's where there's more work to be done. I mean, we did not expect either that we would be able to acquire The former Phenomex, now Bruker Cellular Analysis, and then that NanoString would already, in Q2, run into, you know, their Chapter 11 reorganization. And so, you know, this wasn't going to wait till Q4 or till we got around to next year.

Frank H. Laukien: Doesn't it doesn't it.

Frank H. Laukien: It's not that these things are all piling up on NAS, except at the highest level would be provides the strategic direction and the support.

Frank H. Laukien: Financing of course, and ultimately and that's where there is more work to be done I mean, we did not expect either that we would be able to acquire.

Frank H. Laukien: The former Panamax now broker cellular analysis.

Frank H. Laukien: And then that nano strength.

Frank H. Laukien: Boyd already in Q2 run into their chapter 11 reorganization and so you know this wasn't going to wait till Q4 until we get around till next year. This was an opportunity a strategic opportunity that's incredible.

Frank H. Laukien: This was an opportunity, a strategic opportunity that's incredible in a complicated situation, we'll admit that. But on the other hand, what an opportunity to build, to buy not only a gene expression business; their gene expression business with Encounter is quite nice, but really, hopefully, it will be closed soon. I mean, this hasn't closed yet, but to acquire, hopefully soon, and it's under agreement in an asset deal, the spatial biology business, which is one of the leading spatial transcriptomics businesses, as you know. So those were incredible strategic opportunities and, again, at valuations that are absolutely compelling and will lead to great ROICs. That is very unusual for Bruker to have made that many acquisitions.

Frank H. Laukien: Complicated situation will admit that but on the other hand, what an opportunity to build to Dubai, not only a gene expression business Theyre gene expression business with encounter is quite nice, but really a hopefully close soon I mean, this hasn't closed yet but to acquire hopefully soon and it's under agreement.

Frank H. Laukien: And an asset deal the spatial biology business, which is one of the leading spatial transcriptome mixed businesses as you know.

Frank H. Laukien: So those were incredible strategic opportunities and again at valuations that are absolutely compelling and will lead to great rois fees. So.

Frank H. Laukien: That is very unusual for brokerage I have that many acquisitions on the other hand, the opportunities that we had in the flexibility and the organizational bandwidth that we have allow us to do that.

Frank H. Laukien: On the other hand, the opportunities that we have and the flexibility and the organizational bandwidth that we have allow us to do that. On 25 and 26, if I may defer you to this little mini-investor day that we hope to do as a virtual call only. Within weeks after we close NanoString, hopefully, we get to close NanoString in the second quarter, and then hopefully within weeks, Justin will be setting up a two-hour call where we present and have the division leaders of those new businesses present ChemSpeed, present Elitech, and hopefully present NanoString, and then, of course, Gerald and I will wrap it all up and tell you how that affects and accelerates our medium-term outlook for 2026

Frank H. Laukien: On 25, and 26, if I may defer you to this little mini.

Frank H. Laukien: Many investor day that we.

Frank H. Laukien: We hope to do within.

Frank H. Laukien: As a as a virtual call only.

Frank H. Laukien: Within weeks after we closed nano string hopefully we get to close nano string in the second quarter and then hopefully within weeks Justin will be setting up a two hour call, where we present in half.

Frank H. Laukien: The division leaders of those new businesses.

Frank H. Laukien: <unk> Kim speed present, I'll, let Jake and hopefully present nano string and then of course, Gerald and I will wrap it all up and tell you how that affects and accelerates our medium term outlook for 2026, that's our present plan other than that we prefer not to comment on administering today, because it's still 10.

Frank H. Laukien: That's our present plan. Other than that, we prefer not to comment on NanoString today because it's still pending, and as you know, we tend to be very disciplined. Now we talk about Elitech now that it's closed, and we'll talk about NanoString more when that closes, hopefully in the second quarter. Got it.

Frank H. Laukien: And as you know we tend to be very disciplined with how we talk about elite Tech now that it's closed and we'll talk about that a straight more.

Frank H. Laukien: When that closes hopefully in the second quarter.

Frank H. Laukien: Got it. That's fair. Thanks, Frank.

Speaker Change: Got it that's fair thanks Frank.

Speaker Change: Alright, Thank you puneet.

Operator: Our next question comes from Patrick Donnelly from Citi. Please go ahead with your question.

Frank H. Laukien: Our next question comes from Patrick Donnelly from Citi. Please go ahead with your question.

Frank H. Laukien: Hey guys, thanks for taking the questions. Frank, maybe there's one on kind of the order backdrop, a little more real time. It sounded like the books bill is a little bit below one in BSI. Can you talk about what you're seeing on the order front, you know, maybe on the academic side in particular, what the conversations there with customers are, just expectations as we go forward here?

Patrick Bernard Donnelly: Hey, guys. Thanks for taking the questions.

Frank H. Laukien: Frank maybe just one on kind of the order backdrop, a little more real time it sounded like the book to Bill was a little bit below one.

Frank H. Laukien: Can you just talk about what youre seeing on the order front, maybe on the academic side in particular.

Frank H. Laukien: What the conversations are with customers are.

Frank H. Laukien: Just expectations as we go forward here.

Frank H. Laukien: Yeah, we didn't use up much backlog in the first quarter because of, you know, some revenue slippage. So our backlog coverage is still about seven and a half months.

Frank H. Laukien: Yes.

Frank H. Laukien: Did.

Frank H. Laukien: Use up much backlog in the first quarter because of some revenue slippage so.

Frank H. Laukien: Backlog coverage is still about seven five months. So that's remained strong.

Frank H. Laukien: And.

Frank H. Laukien: So that's remained strong. And Okay, academic government in the US and in Europe has been decent. You know, we've had also reasonable, except for China, reasonable bookings in biopharma. Diagnostics, Maldi Biotyper, is doing well, certainly on the consumable side.

Frank H. Laukien: Okay.

Frank H. Laukien: Make government.

Frank H. Laukien: <unk>.

Frank H. Laukien: In the U S and in Europe has been has been decent.

Frank H. Laukien: We've had.

Frank H. Laukien: Also reasonable except for China reasonable bookings in Biopharma.

Frank H. Laukien: Diagnostics multi biocide bird is doing well certainly on the consumable side, so its not a fantastic macro environment out there right.

Frank H. Laukien: So it's not a fantastic macro environment out there, right? But it's decent and it's sort of, it's sort of the bookings and in all the various markets. Geography or by market by end market are about as expected, which is, you know, slower growth but still organic growth for us. Yes, so the macro environment isn't exciting, but it is also not deteriorating, and it is about as we expect it, given our tool set and portfolio transformation, which, as you've seen, does allow us to achieve, you know, above market 5 to 7% organic revenue growth this year. We're really quite confident with that.

Frank H. Laukien: It's Steve and then it's sort of it's sort of the bookings and all.

Frank H. Laukien: And all in all the various markets.

Frank H. Laukien: Griffey or by market by end market are about as expected, which is you know slower growth, but still organic growth for us.

Frank H. Laukien: And.

Frank H. Laukien: Okay.

Frank H. Laukien: Yes, so the macro environment isn't exciting, but it is also not deteriorating and it is about as good as we expected given our toolset and portfolio transformation, which as you've seen does allow us.

Frank H. Laukien: With.

Frank H. Laukien: Above market, 5% to 7% organic revenue growth. This year, we're really quite confident with us.

Gerald N. Herman: Okay, that's helpful. And then maybe you touched on China briefly in the answer there. Can you just talk about the trends over there? I mean, there's been some debate about the stimulus loan program, whatever you want to call it. What you're seeing there, what the conversations look like in China, and expectations for the year would be helpful. Thank you.

Speaker Change: Okay. That's helpful. And then maybe you touched on China briefly answer there can you just talk about the trends over there I mean, there's been some debate about stimulus loan program whatever you want to call it.

Gerald N. Herman: What youre seeing there or what the conversations look like in China and expectations for the year would be helpful. Thank you.

Gerald N. Herman: Patrick, it's Gerald. I'll take this one. So from a perspective of China, I mean, our, we're, it's still early days, I guess I'd say with respect to this loan stimulus program that's being considered, we've heard some conversation on the street about how that's going to play out. We don't expect to see that, you know, transfer itself into real orders probably until the second half. Our understanding is that it's relatively broad.

Gerald N. Herman: Patrick as Gerald I'll take this one so from our perspective in China.

Gerald N. Herman: We are still early days I guess I'd say with respect to this.

Gerald N. Herman: Loan stimulus program, that's being considered.

Gerald: We've heard some conversation on the street about how thats going to play out we don't expect to see that in the transfer itself into real orders probably until certainly the second half.

Gerald N. Herman: Our understanding is that it's a relatively broad stimulus program targeting the equipment upgrade.

Gerald N. Herman: stimulus program targeting equipment upgrade and certainly in the technology area over multiple years, our expectation is that will ultimately result in a tailwind for Brooker, but we don't really have any further details on exactly the timing or exactly which products would be impacted. That's what I guess I can say about that we still continue to feel pretty strong about the overall performance in China over time, but obviously there's been some challenges there from a macro perspective.

Gerald N. Herman: And certainly in the technology area.

Gerald N. Herman: Multiple years, our expectation is that will ultimately result in tailwind for broker, but we don't really have any further details on exactly the timing or exactly which products would be impacted.

Gerald N. Herman: That's what I guess I can say about that we still continue to feel pretty strong about the overall performance in China over time.

Gerald N. Herman: But obviously theres been some some challenges there from a macro perspective.

Gerald N. Herman: But very fundamentally, China has, again, made and clarified their very strong and exceptionally strong commitment to science and technology. And that's a very high priority for them and for their investments as a country, which bodes well for the entire industry. It also does bode quite well for us with more of an academic government exposure or, I mean, more participation in China, where we got a little lucky that we're not so exposed to their biopharma or CRO market, which obviously has been and probably will continue to struggle. Some of that, to some extent, also because of geopolitical risks that are, anyway, so that's bypassing us mostly.

Gerald N. Herman: A very fundamentally China has again.

Gerald N. Herman: Nate maybe clarify it theyre very strong and exceptionally strong commitment to science and technology.

Gerald N. Herman: That's a very high priority for them and for their investments as a country, which bodes well for the entire industry.

Gerald N. Herman: It also does bode quite well for us with more of an academic government exposure are more.

Gerald N. Herman: Patient in China.

Gerald N. Herman: Whereas we got a little lucky that we're not so exposed to their biopharma all our CRM markets.

Gerald N. Herman: Which obviously has been and probably continues to struggle.

Gerald N. Herman: To solve that to some extent also because of geopolitical risks.

Gerald N. Herman: Anyway, so thats bypassing up's phosphate.

Speaker Change: Thank you guys.

Operator: Our next question comes from... Our next question comes from Rachel. That's all from J.P. Morgan. Please go ahead with your questions.

Speaker Change: Our next question comes from.

Gerald N. Herman: Our next question comes from Rachel.

Rachel: That's installed from J P. Morgan. Please go ahead with your question.

Frank H. Laukien: Hi, good morning you guys. Thanks so much for taking the questions. So first, I wanted to push a little bit on this 2Q guide. You mentioned that you're expecting mid-single-digit organic growth next quarter, so that came in a little bit lighter than expectations. You also mentioned that 15 million slipped from 1Q to 2Q. So can you help us understand the puts and takes there? What are the underlying assumptions embedded in 2Q? Is there any level of conservatism, or is this more of a realistic guide based on what you're seeing in the market?

Rachel: Hi, good morning, guys. Thanks, so much for taking the question. So first I wanted to push a little bit on the <unk> Guide you mentioned that you're expecting mid single digit organic growth next quarter. So that came in a little bit later than expectation.

Frank H. Laukien: You mentioned that $15 million slipping from <unk> to <unk>. So can you help us understand the puts and takes there what are the underlying assumptions embedded in kilkeel is there any level of conservatism or is this more of a realistic guide based on what youre seeing in the market right now.

Frank H. Laukien: Yeah, no, I mean, hopefully it's in the, you know. Sorry, mid-single digit is a somewhat conservative guy because we just...

Speaker Change: Yeah, no I mean that hopefully extend the.

Frank H. Laukien: Yes.

Frank H. Laukien: We mid single sorry, mid single digit is a.

Frank H. Laukien: Somewhat conservative guidance, because we just.

Frank H. Laukien: We missed a little bit in Q1, right? So we'd like to not have that repeat, but there's some upside to that. But on the other hand, it's also realistic, you know? Realistic. It's a realistic color for the second quarter, with potential for upside, but we'd like to be in an area where, you know, there's no downside to that in Q2.

Frank H. Laukien: Yes, just a little bit in Q1 right.

Frank H. Laukien: So we'd like to not have that repeat but so there is some upside to that but on the other hand, it's also realistic.

Frank H. Laukien: Realistic.

Frank H. Laukien: Realistic color for the second quarter.

Frank H. Laukien: With.

Frank H. Laukien: Potential for upsides, but we'd like to be in.

Frank H. Laukien: An area, where there is no downside to that in Q2.

Frank H. Laukien: Okay, great. That's helpful.

Speaker Change: Okay, Great. That's helpful. And then just on 2025, you've pulled forward some of the 2020 or the 2026 estimate the 2025 last quarter I appreciate youre going to have many analyst day in the coming months, but I guess just to clarify are you assuming that any of the underlying assumptions within that 2002.

Frank H. Laukien: And then just on 2025, you know, you pulled forward some of the 2025 or the 2026 estimates to 2025 last quarter. I appreciate you're going to host this, you know, mini analyst day in the coming months here. But I guess just to clarify, are you assuming that any of the underlying assumptions within that 2025 framework that you touched on last quarter have changed? Or are you really just pointing to an update given some of the recent M&A and deals closing between Elitec and Manus Strength on the horizon?

Frank H. Laukien: 25 framework that you touched on last quarter had changed or are you really get pointing towards an update given some of the recent M&A and deals closing.

Frank H. Laukien: And managed strength alright, alright.

Frank H. Laukien: Yeah, it's all about M&A, Rachel. So, you know... Kemp's speed this year adds about $10 million in revenue and is neither EPS dilutive nor accretive. We think by next year, they'll be somewhat EPS accretive and get back into growth mode. They had a lot of changes going from switching to US GAAP and product accounting rather than percentage of revenue. I won't go into too much detail, and we'll give you more at our Mini Investor Day there or Mini Investor Call. So they'll be multi-accretive. Elitech looks like it continues to be a very nice high single-digit, sometimes low double-digit REF organic revenue growth business and clearly somewhat margin accretive, and clearly EPS accretive.

Speaker Change: That's all about M&A Rachel.

Frank H. Laukien: So you know.

Frank H. Laukien: Kemp speeds this year adds about $10 million per quarter in revenue and it's neither EPS dilutive nor accretive we think by next year there'll be somewhat EPS accretive and get back into growth mode. They had all of that.

Frank H. Laukien: No.

Frank H. Laukien: They have a lot of changes going from switching to U S. GAAP in product accounting rather than as a percentage of revenue too much detail and we will give you more at our Investor day, there are many investor call.

Frank H. Laukien: There'll be bought victory.

Frank H. Laukien: <unk> will be it.

Frank H. Laukien: It looks like it continues to be a very nice high single digit sometimes low single low double digit revpar getting revenue growth business and slightly somewhat margin accretive clearly EPS accretive. So that all comes in and then you know as we close up when we closed <unk> as we have.

Frank H. Laukien: So that all comes in. Spelled out without a lot of detail, but just as a heads up in our April 22nd announcement of the Asset Purchase Agreement for NanoStrings. We won't give 24 guidance on nanostring, for reasons explained in that press release, obviously had considerable disruption from Chapter 11 and, you know, and other litigation-related materials. We won't get into that today. So we'll see how that business settles. We just want to give the street a heads up that there is a meaningful dilution from that in 24.

Frank H. Laukien: Spelled out without a lot of detail, but just as a heads up in our April 22nd announcement of the asset purchase agreement Fernando strength.

Frank H. Laukien: We won't give 'twenty forward guidance on <unk> strength.

Frank H. Laukien: For reasons explained in that press release.

Frank H. Laukien: Obviously, you had considerable disruption from chapter 11.

Frank H. Laukien: At the other linear.

Frank H. Laukien: Litigation related materials, we won't get into that today. So we'll see how that business settles. We pointed you gave the street a heads up that there is a meaningful dilution from that in 'twenty four we estimated 15% to 20.

Frank H. Laukien: Happy to take that next year, we expect that to be lower next year, but we're not.

Frank H. Laukien: <unk>.

Frank H. Laukien: We estimated 15 to 20 cents. I'll be happy to take that next year. We expect that to be lower next year, but we're not going to be able to go into that today, right, because it hasn't closed. So it's all fundamentally, all the incremental changes are all about these acquisitions, and I guess the supporting financing that we've done at... that Gerald has done at incredibly attractive rates with our banking partners. Very, very pleased with how our capital structure is supporting all of that in a very attractive

Frank H. Laukien: Going to be able to go into that today right because it hasn't closed so it's all fundamentally.

Frank H. Laukien: All of the all of the incremental changes are all about these acquisitions.

Frank H. Laukien: And how that and I guess wisdom.

Frank H. Laukien: Supporting financing that we've done it.

Frank H. Laukien: In general has done an incredibly attractive rates with our banking partners very very pleased with how our capital structure is supporting all of that and a very attractive way. So we'll we'll pull all of these things together because they are too many moving pieces for you all quite honestly to be able to try to figure. It all out so we'll hope to really assist you.

Frank H. Laukien: So we'll pull all of these things together because there are too many moving pieces for you all, quite honestly, to be able to try to figure it all out. So we'll hope to really assist you with that and give you the ability to then model 26 and 25 in between, although we're not going to give you 25 guidance, but I think you'll be in a much better position to understand how all these pieces come together.

Frank H. Laukien: With that it gives you the ability to that model 'twenty Stakes at 25% between although we're not going to give 25 guidance, but I think you'll be in a much better position to understand how all these pieces come together.

Frank H. Laukien: Great. Thank you for all the color.

Speaker Change: Great. Thank you for all the color.

Frank H. Laukien: Okay.

Operator: Our next question comes from Doug Schenkel from Wolfe Research. Please go ahead with your question. Hi, thanks for the question. This is Colleen on behalf of Doug. I just want to know how you're framing book to bill normalizing for the bullets in China stimulus bookings.

Operator: Our next question comes from Doug Schenkel from Wolfe Research. Please go ahead with your question. Hi, thanks for the question.

Frank H. Laukien: Our next question comes from Doug Schenkel from Wolfe Research. Please go ahead with your question Hi.

Operator: Hi, Thanks for the question. This is colleen on for Doug I, just wanted to know how you're framing book to Bill normalizing for the bullish in China stimulus bookings in Q1 of last year and the timing of delay of bookings in Q1.

Gerald N. Herman: So the book to bill is for the first, the book to bill that Frank quoted of roughly one is for the first quarter of this year, right? So that bodes well.

Colleen: So the book to Bill is for the FERC. The book to Bill that Frank quoted up roughly one is for the first quarter of this year right. So that bodes well now last year in China, We had a bolus of orders in the first quarter.

Douglas Anthony Schenkel: But then we had basically an air pocket of orders in the third quarter.

Douglas Anthony Schenkel: Last year from China. So there was a lot of distortion of bookings in China last year for the full year and last year in China, We had bookings up nicely in the double digits along with revenues.

Gerald N. Herman: Now, last year in China, we had a bolus of orders in the first quarter, but then we had basically an air pocket of orders in the third quarter of last year from China. So there was a lot of distortion and bookings in China last year. For the full year in China, we had bookings up, you know, nicely in the double digits along with revenues. So as you look at 2024, there's quite a bit of distortion on the year-over-year comp in China for bookings. And for that reason, we really think it makes sense to look at kind of a full year picture for bookings. Hopefully, that will be that.

Gerald N. Herman: So as you look at 2024, there's quite a bit of distortion on the year over year comp in China for bookings.

Gerald N. Herman: And for that reason, we really think it makes sense to look at kind of full year picture from bookings hopefully that helps.

Gerald N. Herman: Helpful.

Speaker Change: Thank you and just one follow up on leverage so with the <unk> deal. We estimate your debt to EBITDA will approximate about three and a half for three.

Gerald N. Herman: Three five times is that right and if so is it fair to assume this is the limit.

Gerald N. Herman: What you'd be willing to take the balance sheet.

Gerald N. Herman: Yeah, we'll actually talk more about that actually at the mini investor day. But what I'd say is, first of all, we need to make sure we're talking about gross versus net in the calculation. And we'll talk again; I think I just defer that to our call coming up. I mean, overall, of course, we're pleased with the financing actions we've already taken. And we'll talk more about options as we march into the forward investor and sell side analyst. But, with your question, you're approximately right.

Gerald N. Herman: Yes.

Gerald N. Herman: We will talk more about that actually in the.

Gerald N. Herman: The mini Investor day, but what I'd say is first of all we need to make sure.

Gerald N. Herman: We're talking about gross versus net.

Gerald N. Herman: The calculation and.

Gerald N. Herman: We will talk again, I think I would just defer that to our coal coming up being overall of course, we're pleased with the financing actions, we've already taken and we will talk more about options as we march into the before an investor in sell side analyst discussion, but approximately with your question you're approximately right leverage.

Gerald N. Herman: But roughly, with your question, you're approximately right, you know, leverage, gross leverage of about three and a half, net leverage will be lower. And generally, that's not where we normally operate. We prefer to operate more in the two to two and a half range. And, obviously, there'll be time, and there'll be opportunities to de-lever. Very clearly, our goal will be to de-lever from that level again

Gerald N. Herman: Gross leverage of about three and a half that net leverage will be lower.

Gerald N. Herman: And generally.

Gerald N. Herman: That's not where we'd normally operate we prefer to operate more in the two to two and a half range.

Gerald N. Herman: And obviously there'll be time there'll be opportunities to.

Gerald N. Herman: To Delever very clearly our goal will be to delever from that level again.

Speaker Change: Thank you.

Speaker Change: Youre welcome.

Operator: Our next question comes from Jack Meehan from Nephron Research. Please go ahead with your question.

Gerald N. Herman: Our next question comes from Jack Meehan from Nephron Research. Please go ahead with your question.

Operator: Thank you. Good morning.

Jack Meehan: Thank you.

Jack Meehan: Good morning I.

Jack Meehan: I had a couple of.

Operator: <unk>.

Jack Meehan: Financial questions for you guys on the income statement.

Operator: <unk>.

Gerald N. Herman: I had a couple of financial questions for you guys on the income statement. Do you just explain, I guess, like below the line, other income? I was modeling like $7 million of other expense, but it was kind of the opposite. How, were there any factors that drove that in the quarter?

Jack Meehan: Could you just explain I guess like below the line other income I was modeling like $7 million of other expense, but it was kind of the opposite.

Gerald N. Herman: Were there any factors that drove that in the quarter.

Gerald N. Herman: One of the other significant items coming out of the quarter is, of course, as you likely know, we moved a series of, took a series of actions on the foreign exchange side to be able to secure the 870 million euro Allotech transaction. So that's part of what you see here. There is a substantial foreign exchange gain that came between the euro and the Swiss franc. So that's what you see. We also had, as I think I mentioned in my prepared remarks, a more favorable tax rate than we had in the prior year. Fundamentally, I'm pleased with that from a jurisdictional mixed perspective. So those are the two pieces.

Gerald N. Herman: One of them one of the other significant items coming out of the quarters of course as you likely know we.

Gerald N. Herman: Great. Okay, that makes sense.

Gerald N. Herman: We moved.

Gerald N. Herman: A series of <unk> series.

Gerald N. Herman: Series of actions on the foreign exchange side to be able to secure the $870 million Euro Alatech transaction. So.

Gerald N. Herman: That's part of what you see there there is a substantial foreign exchange gain that came between the euro and the Swiss franc.

Gerald N. Herman: So that's what you see we also had as I think I mentioned in my prepared remarks.

Gerald N. Herman: More favorable tax rate than we have.

Gerald N. Herman: In the prior year.

Gerald N. Herman: Fundamentally I'm pleased with ACH from a jurisdictional mix perspective, some of those into two pieces.

Gerald N. Herman: And then the second question was just on the Phenomex solution. Could you talk about how the integration is going, number one. Number two, I think I heard five cents of dilution. Previously, we were talking about two to three cents a quarter. Just what was the delta there?

Speaker Change: Great. Okay that makes sense and then.

Gerald N. Herman: Second question was just on the genomics solution could you talk about.

Gerald N. Herman: Just how the integrations going number one number two I think I heard five cents dilution.

Gerald N. Herman: Previously you were talking about two to three cents a quarter just.

Gerald N. Herman: What was the Delta there.

Gerald N. Herman: Phenomics, or now, as we call it, Bruker Cellular Analysis. We are estimating $0.10 to $0.12 dilution for the year 2024. If you recall, we had 14 cents of dilution in Q4. Before we could, you know, we triggered the Warren Act, so it took us, while we made the decisions right away, it took us some time to reduce headcount and costs. And you still get some of that also outside of the United States.

Speaker Change: Yes, panamax or as we call it broker cellular analysis.

Gerald N. Herman: We are estimating 10 to 12 cents dilution for the year 'twenty four.

Gerald N. Herman: If you recall we had.

Gerald N. Herman: <unk> dilution in Q4 before we could you know.

Gerald N. Herman: We triggered the warrant act so it took us while we made the decisions right away took us some time to reduce headcount and cost.

Gerald N. Herman: And you still have some of that also still.

Gerald N. Herman: Some of that cost reduction takes a little longer to have an effect. So yeah, five cents was the number correct for Phenomex, and the average this year may be two to three cents or maybe three cents on average, but it will be more front loaded. So. Good catch again, Jack.

Gerald N. Herman: Outside.

Gerald N. Herman: In the United States some of that cost reduction takes a little longer to have an effect <unk> was the number correct for panamax.

Gerald N. Herman: And the average this year, maybe two to three.

Gerald N. Herman: Three on average, but it will be more frontloaded.

Gerald N. Herman: It was higher than the average in Q1. Yeah, Jack, as you'd imagine, the dilution is going to gradually taper off Phenomics over time. What we've said is we expect it to be basically break-even by 2026, but a lot of that dilution will really taper off in the first half of this year. So that's how we're thinking about the term. Yeah.

Gerald N. Herman: Good good catch again, Jack it was it was higher than the average in Q1 Jack.

Gerald N. Herman: As you would imagine the dilution is going to gradually taper from Pheno mix over time, what we've said is we expected to be basically breakeven by 2026, but a lot of that dilution will really taper off in the first half of this year.

Gerald N. Herman: So that's how we're thinking about the time.

Gerald N. Herman: Sounds good. Thank you, guys.

Speaker Change: Sounds good thank you guys.

Speaker Change: Youre welcome.

Operator: Our next question comes from Dan Brennan from TD Cowen. Please go ahead with your question.

Gerald N. Herman: Our next question comes from Dan Brennan from TD Cowen. Please go ahead with your question.

Frank H. Laukien: Great, thank you. Thanks for taking the time to answer the question. Frank and Gerald, I know we're going to get more color on Nanostring once it closes, but is it possible to speak at all about the work that you've done on the patent situation? Just because I think that likely caught many people by surprise, the fact that they've got these cases ongoing, and they lost the Geomics case earlier this year, which obviously they're appealing, and they have the Cosmics case. I'm just wondering any color you can provide on the work you did, the comfort you got, and or any remedies you might have in place if these cases go against Nanostring.

Daniel Gregory Brennan: Great. Thank you thanks for taking the question.

Frank H. Laukien: In general I know, we're going to get more color on downstream once it closes but is it possible to speak at all to the work that you've done on the patent situation, just because I think that.

Frank H. Laukien: Likely caught many people by surprise the fact that they've got these cases ongoing and the loss of genomics case earlier, this year, which obviously theyre appealing and they have the cosmic case I'm. Just wondering any color you can provide on the work you did the comfort you got end or any remedies you might have in place. If these cases go against now shrink.

Frank H. Laukien: Yeah, that's really something we're, you know, first of all, talking about; we're not going to talk even after the closing about litigation.

Speaker Change: Yeah, that's that's really something.

Frank H. Laukien: Sure.

Frank H. Laukien: First of all talking we're not going to talk even after the closing about litigation.

Frank H. Laukien: Potential litigation outcomes or litigation strategies. [inaudible] Today, we certainly cannot talk about it because it hasn't even closed. It's obviously a key issue for the NanoString company, right? I mean, that to a significant extent drove them into Chapter 11 reorganization. Then once they were in the Chapter 11 reorganization, and I'm not telling you anything you don't know, there was a favorable... Interim ruling at the European Patent Court that lifted the cosmic, preliminary injunction, at least outside of Germany, if I have all my facts right. So there's been some positive news.

Frank H. Laukien: Potential litigation outcomes or litigation strategies.

Frank H. Laukien: Today, we certainly cannot talk about it because it hasn't even closed it's obviously a.

Frank H. Laukien: A key issue for the nano string that matters.

Frank H. Laukien: <unk>.

Frank H. Laukien: If any rise I mean, that's.

Frank H. Laukien: To a significant extent drove them into chapter 11 reorganization.

Frank H. Laukien: Once they were in the chapter 11 reorganization that not telling you anything you don't know if there was any of that.

Frank H. Laukien: The ruble.

Frank H. Laukien: Interim ruling at the European patent court that lifted the pause mix for.

Frank H. Laukien: Preliminary John Shouldnt at least outside of Germany, five all my facts right.

Frank H. Laukien: There's been some positive news.

Frank H. Laukien: $6.74 to $6.86, up 6% to 8% to 80%, separate litigation and challenges and, you know, dirty hands and anti-trust counterclaims and all of that and how that plays itself out, we can discuss a little bit more at, hopefully, we don't spend our entire video. We will not, I promise you, spend our mini-investor day on IP items, but we can give you a little bit more color to the extent we can comment on ongoing litigation, which is, you know, very limited.

Frank H. Laukien: But that's all intermediate subject to appeal subject to final ruling. So there is a lot of moving pieces and a lot of.

Frank H. Laukien: Separate litigations and challenges.

Frank H. Laukien: And you know and dirty handset antitrust counter claims and all of that and how <unk>.

Frank H. Laukien: That plays itself out we can discuss a little bit more.

Frank H. Laukien: Hopefully, we don't spend our entire many.

Frank H. Laukien: We will not I promise you, we spend all our mini Investor day.

Frank H. Laukien: On the IP items, but we will can give you a little bit more color to the extent, we can comment on.

Frank H. Laukien: Ongoing litigation switches.

Frank H. Laukien: Very limited as you might guess.

Frank H. Laukien: We are very aware; we are very aware. And maybe just one on the SEMI business, you know, you called out the AI-related positioning. Just wondering if you can help us kind of size that, like how did SEMIs do in the quarter? Any specific color on how much AI is driving your SEMI and packaging business and kind of, you know, what do you kind of assume implicit in the guidance for the year? Yeah, we tend to do that.

Frank H. Laukien: Okay.

Frank H. Laukien: Yes, yes, very aware grow very aware.

Frank H. Laukien: Okay.

Frank H. Laukien: Maybe just one on the semi business you called out the AI related positioning just wondering if you can help us kind of size that like.

Frank H. Laukien: How did <unk> do in the quarter any specific color on how much that AI is driving your semi and packaging business and kind of what are you kind of assume implicit in the guide for the year.

Frank H. Laukien: Now we tend to do that more on an annual basis because, of course, quarterly fluctuations, but I think our semiconductor metrology business, that's the total percentage of revenues, now in the high single digits and probably marching towards, you know, eventually towards 10% and higher. And so that did well in terms of revenues in Q1.

Frank H. Laukien: We tend to do that more on an annual basis because of course quarterly fluctuations, but I think our semiconductor metrology business as a total percentage of revenue is not in the high single digits.

Frank H. Laukien: And probably marching towards towards Dimensionalize or extend presented higher.

Frank H. Laukien: And.

Frank H. Laukien: Maybe them and so that's did well in terms of revenues in Q1.

Frank H. Laukien:

Frank H. Laukien: Yes.

Frank H. Laukien: The additional piece, and that's still, you know, modest and below 1% of our revenue, is that we now, via BEST and their research instrument subsidiary, participate in the semiconductor industry. Extreme UV or EUV technologies are now going into lithography, which of course is semiconductor manufacturing, for smaller and smaller feature sizes, which are needed particularly for AI, but also perhaps for other high-performance computing applications. And there are some unique technologies where we're simply in the supply chain; we don't deliver complete systems of. The largest UV lithography supply chain that is out there, anybody can guess who that might be.

Frank H. Laukien: The additional piece, that's still modest in the low 1% of our revenues that we know best and their research instrument subsidiary participate in the semi conductor late.

Frank H. Laukien: The extreme <unk> technologies are now going into lithography, which is of course this semiconductor manufacturing.

Frank H. Laukien: For smaller and smaller feature sizes, which are needed, particularly for AI, but also perhaps for other high performance computing applications.

Frank H. Laukien: And there is some unique technologies, where we're simply in the supply chain, we don't deliver complete systems of.

Frank H. Laukien: Sure.

Frank H. Laukien: The largest lithography.

Frank H. Laukien: Lithography supply chain that is out there anybody could guess some of that might be and we're very pleased we're providing some unique technologies from our research instruments business and I'm sure you've never heard of but it's not insignificant anymore, maybe its $20 million or something like that in the supply chain. These are systems, but it's a very.

Frank H. Laukien: And we're very pleased we're providing some unique technologies from our research instruments business. And I'm sure you've never heard of them, but they're not insignificant anymore, maybe it's $20 million or something like that in the supply chain. These aren't systems. But it's a very, very key and very unique technology that just adds a little bit of cherry on top of our semiconductor and advanced packaging metrology business that you're more familiar with.

Frank H. Laukien: Very key and very unique technology position that just adds a little bit of Cherry on top of our semiconductor and advanced packaging metrology business that youre all familiar with this is just.

Frank H. Laukien: Yeah, this is just a very good trend, and it's unusual for a life science or post-genomic company. But indeed, we have it in our nanotools, which to some extent are just very applicable and very unique there.

Frank H. Laukien: That's a very good trend and it's unusual for a life science or post genomic company, but indeed, we have it in our NAFTA tools to some extent are very applicable and very unique there.

Speaker Change: That's wonderful.

Speaker Change: Great. Thank you.

Frank H. Laukien: You're welcome, Dan. Our next question comes from Dan Arias from Steeple.

Speaker Change: Youre welcome to welcome Beth.

Frank H. Laukien: Our next question comes from Dan Arias from Stifel. Please go ahead with your question.

Frank H. Laukien: One of you guys, thank you. Frank, I really do apologize for asking this because you said you'd be addressing NanoString later. And so, you know, this may be an unfair question, but if I believe I'm asking you less about the details and the financials and more just about the rationale. Can you speak to whether this is a deal where you just felt like the price was right, as you had stated earlier, or one where the diligence led you to a point where you felt like you were comfortable either with the legal side of the equation or the technical side of the equation and worked That is actually leading to the legal side. Can you just talk a little bit about how comfortable you are with the deal? Because, obviously, it is a controversial one.

Daniel Anthony Arias: Good morning, guys. Thank you Frank I really do apologize for asking this because you said you'll be addressing nano string later.

Frank H. Laukien: Thanks a lot.

Frank H. Laukien: And so this may be an unfair question, but if I if I believe I just don't.

Speaker Change: Yes go ahead sorry.

Frank H. Laukien: It's less about the details in the financials and more just about the rationale.

Frank H. Laukien: Can you speak to whether this is a deal where you just felt like the prices right to your point earlier or.

Frank H. Laukien: One where the diligence led you to a point, where you felt like you were.

Frank H. Laukien: Comparable either with the legal side of the equation or the technical side of the equation of work around for some of the problems.

Frank H. Laukien: They are actually leading to the legal side can you just talk a little bit about how comfortable you got with the deal because obviously the controversial one thanks a bunch.

Frank H. Laukien: Yes, so probably the answer is no, because I don't want to talk about any of the litigation and all of these other things, but strategically, having a much bigger play in Spatial Biology with being able to acquire at a very reasonable valuation one of the two leaders in spatial transcriptomics is an unbelievable strategic opportunity. That's what completely drives this deal.

Speaker Change: Yeah. So probably the answer is no because I don't want to talk about any of the litigation and all these other things but.

Frank H. Laukien: Strategically having a much bigger play.

Frank H. Laukien: In spatial biology, with being able to acquire at a very reasonable valuation.

Frank H. Laukien: One of the two leaders in spatial transcripts all mix.

Frank H. Laukien: He is an unbelievable strategic opportunity.

Frank H. Laukien: We're very pleased with their gene expression and counter profiling business. We think that has some growth opportunities. It has good margins, wonderful.

Frank H. Laukien: But that's completely what drives this deal we're very pleased with their gene expression and counter profiling business. We think that has some growth opportunities that has good margins wonderful, but the driver was spatial transcriptome mix.

Frank H. Laukien: But the driver was spatial transcriptomics, so the GMX and COSMX and related products, you know, software, and other product lines. And that is a really big deal if you want to be a leader in, you know, spatial biology. We have a complementary but much, much smaller spatial proteomics business with canopy. They really are in adjacent markets; they don't really overlap.

Frank H. Laukien: So the <unk> cosmetics and related product software and other product lines and that is a really big deal. If you want to be a leader in <unk>.

Frank H. Laukien: <unk> biology, we have a complementary but much much smaller spatial proteomics business with canopy.

Frank H. Laukien: You really are in adjacent markets, they don't really overlap.

Frank H. Laukien: They're also, you know, what NanoString is doing is, you know, a hundred times larger. So this really puts us on the map in spatial transcriptomics. We like their plexing capability; a lot of research customers, that's really what they want. They're far ahead, and I think they're pretty fundamentally ahead in spatial transcriptomics. So, you know, they're one of the pioneers, and we want to continue to support their customers in doing their fundamental and then, very much also, their translational clinical research for these spatial single cells.

Frank H. Laukien: They are also in that.

Frank H. Laukien: Australia is doing is three.

Frank H. Laukien: Three times larger so this really puts us on the BOP and special transcriptome mix.

Frank H. Laukien: We like their flexing capability a lot of research customers Thats really what they want their their father, Ed and I think there.

Frank H. Laukien: Pretty fundamentally ahead.

Frank H. Laukien: In spatial transcriptome mix.

Frank H. Laukien: So you know, they're one of the pioneers and we want to continue to support their customers and doing their fundamental and then very much also their translational and clinical research.

Frank H. Laukien: Facial single cell.

Frank H. Laukien: Transcriptomics is a tool so, You know, needed for biomedical research and that's in addition to proteomics and structural biology, glycoproteomics, and spatial biology. The bigger field is spatial transcriptomics, and we had no presence in that. So for us, this is a huge opportunity, and we seized it.

Frank H. Laukien: Transcriptome mix our tools are so.

Frank H. Laukien: Needed for for Biomedical research and <unk>.

Frank H. Laukien: And that's in addition to proteomics and structural biology.

Frank H. Laukien: Glycoprotein mixed spatial biology, and there are bigger field is spatial transcript all makes sense.

Frank H. Laukien: Our presence in that so for US this is a huge opportunity and we seized it.

Frank H. Laukien: Okay, appreciate you indulging me on that. And then I guess just the natural next question, or one of them anyways, is, are you still on the hunt for deals? Is this, are you likely to do additional M&A from here? Thank you. I think we're going to be on a deal diet for

Speaker Change: Okay. I appreciate you indulging me on that.

Frank H. Laukien: And then I guess just the natural next question on one of them Anyways is are you still on the hunt for deals as this.

Frank H. Laukien: Are you likely to do additional M&A from here. Thanks, so much.

Frank H. Laukien: I think we're going to be on a deal diet for a little while. I mean, there's always small deals that come through, you know, sometimes, as you know, a lot of smaller deals, sometimes some of them at 5 million or 10 million in revenue. And some of them are literally addressing gaps that we had in our product line in preclinical imaging, or in Raman process analytical technology, or high-end Raman microscopy

Frank H. Laukien: I think we're going to be in the deal diet for a little while.

Frank H. Laukien: Those are things that we've been eyeing for many years, and sometimes more than a decade. And when some of the companies then became available that fit perfectly into our optics, or into our biospin preclinical imaging, we said, wow, this is great. And yeah, it all comes at the same time.

Frank H. Laukien: I mean, there's always small deals that come through sometimes as you know a lot of the smaller deals sometimes some of them at $5 million or $10 million in revenue and some of them are literally addressing gaps that we had in our product line in preclinical imaging.

Frank H. Laukien: Rabat process analytical technology, our high end drama microscopy. Those are things that we've been <unk> for many years and sometimes more than a decade and with some of the companies that became available that fit perfectly into our group of optics or into our <unk> preclinical imaging. We said Wow. This is great at all.

Frank H. Laukien: Whereas two years ago, it was very difficult with valuations then to agree on anything. And so we are value conscious, we are ROIC conscious. And so yeah, this is a, but in terms of larger deals, we obviously need to, we do wish to then deliver for a while. And that's, I think that's the answer to larger deals. I would not expect any additional larger deals until we deliver some.

Frank H. Laukien: At the same time.

Frank H. Laukien: Whereas two years ago, it was very difficult with valuations than to agree on anything.

Frank H. Laukien: We are value conscious we are conscious.

Frank H. Laukien: And so yes. This is.

Frank H. Laukien: But in terms of larger deals.

Frank H. Laukien: We obviously need to we do wish to then deliver for a while.

Frank H. Laukien: I think thats the Armstrong.

Frank H. Laukien: On larger deals.

Frank H. Laukien: Any additional larger deals until we delever some.

Speaker Change: Thank you Frank.

Speaker Change: Youre welcome.

Frank H. Laukien: Once again, if you would like to ask a question, please press star and 1. Our next question comes from Josh Waldman from Cleveland Research. Please go ahead with your question.

Frank H. Laukien: Once again, if you would like to ask a question. Please press star and one.

Frank H. Laukien: Our next question comes from Josh Waldman from Cleveland Research. Please go ahead with your question.

Operator: Hey, good morning guys. Thanks for taking my questions. I'll ask two and then hop off.

Joshua Paul Waldman: Hey, good morning, guys. Thanks for taking my questions.

Frank H. Laukien: First, Frank, can you comment on year-over-year orders in DS-IN1Q and whether the guide assumes any sequential improvement in order rates from here? I guess just more context on how you're thinking about the order cadence to support the four-year organic guide would be helpful. And then for my follow-up, Frank again wondered if you could comment or provide more context on the moving pieces within the CALID business, maybe more color on the revenue slippage.

Joshua Paul Waldman: I'll ask two and then hop off.

Frank H. Laukien: First shrank can you comment on year over year orders and DSI and once you and whether the guide assumes any sequential improvement in order rates from here I guess, just more context on how youre thinking about the order cadence to support the full year organic guide it would be helpful.

Speaker Change: And then for my follow up.

Frank H. Laukien: Frank again wondered if you could comment.

Frank H. Laukien: Provide more context on the moving pieces within the Calvin business I mean, maybe more color on the revenue slippage you mentioned tougher comps.

Frank H. Laukien: You mentioned tougher comps. I can't help but notice you didn't highlight TIMSTOFF this round. I guess in more context here, being on the order front, how you're thinking about TIMSTOFF growth and any other kind of one-off or one-time pressures the segment may have seen this quarter.

Frank H. Laukien: Hey, I can't help but notice you didn't highlight Tim staff this round.

Frank H. Laukien: I guess, just any more context here being on the order front, how youre thinking about same store growth.

Frank H. Laukien: And any other kind of one off for one time pressures in the segment may have seen this this quarter.

Frank H. Laukien: Yeah, so... trying to take as many of the questions as possible. So booking. I think we should expect the normal seasonality that we have with booking. Always weakest in Q1, strongest in Q4, and in between in Q2, Q3.

Speaker Change: Yes so.

Frank H. Laukien: Trying to take as many of the questions so bookings.

Frank H. Laukien: I think we expect the normal seasonality that we have with bookings always weakest in Q1 strongest in Q4 and in between in Q2 Q3.

Frank H. Laukien: They tend to be more comparable in terms of bookings, and that's what we expect this year as well, so normal booking seasonality to work, to your first question, I think would imply, then, a sequential step up, not only revenues and margins, which we've mentioned, but also in bookings, you know, throughout the remainder of the year. Seems to have I did mention the 40 proteomics and immunopeptidomics and glycoproteomics that's all, There was a picture of TIMSTUFF ULTRA, and it's all on the TIMSTUFF platform.

Frank H. Laukien: There tend to be more comparable.

Frank H. Laukien: In terms of bookings so that's.

Frank H. Laukien: Is.

Frank H. Laukien: So would we expect this year as well.

Frank H. Laukien: So normal booking seasonality to wear.

Frank H. Laukien: To your first question I think it would imply a sequential step up not only revenues and margins, which we've mentioned, but also in bookings.

Frank H. Laukien: <unk>.

Frank H. Laukien: Throughout the remainder of the year.

Frank H. Laukien: I'm, sorry, if I didn't mention the of course the.

Frank H. Laukien: 40, proteomics and immuno pet pseudo makes sense.

Frank H. Laukien: Glycoprotein all makes that's all.

Frank H. Laukien: It was a picture of a tip itself all trials Thats all under Tim stopped platform.

Frank H. Laukien: Very significant workflow and software and capabilities increases that we showed at the US EUPO meeting. In March, we have an ASMS around the corner, right? That's coming up in the second week of June in Anaheim.

Frank H. Laukien: Very significant workflow and software and capabilities increases that we that we showed at.

Frank H. Laukien: At the <unk> meeting.

Frank H. Laukien: So that's obviously a biggie in the mass spec world. And yeah, Tim Stubb is doing well, and the many platforms and the many new capabilities. It's just such a beautiful platform. As you peel the onion, there's not only proteomics and then maybe Plasma Proteomics or Single-Cell Proteomics, and now there's middle down, top down, there's intact, there are... These immunopeptidomics and unique PTMs and glycoproteomics. There are protein-protein interactions. It's such a rich field that

Frank H. Laukien: In March we.

Frank H. Laukien: ASML is around the corner right that's coming up in the second week of June and Anaheim.

Frank H. Laukien: That's obviously, a big D in the mass spec world.

Frank H. Laukien: And Tim it's tough as Tim stuff is doing well.

Frank H. Laukien: And the many platforms and the many new capabilities is just such a beautiful platform as.

Frank H. Laukien: As you Peel the onion, there's not only proteomics and then maybe.

Frank H. Laukien: Plasma proteomics or single cell proteomics, and now Theres middle down top down there is intact.

Frank H. Laukien: Our.

Frank H. Laukien: These immuno pet did all makes and unique PGM glycoprotein omics, there's protein protein interactions at such a rich field that.

Frank H. Laukien: One really now has to look at like a dozen subfields that all constitute proteomics and related fields, and the instrument is very, very suitable for that, and along with new wetware consumables, with new software, with new workflows, so plenty going on there.

Frank H. Laukien: One really now has to look at like a dozen some fields that all constitute <unk> related fields.

Frank H. Laukien: And the and the instrument is very very suitable for that.

Frank H. Laukien: And along with new Westway or consumables with new software with new workflows, so plenty going on there.

Frank H. Laukien: Okay.

Frank H. Laukien: Frank, I guess just on the revenue slippage. Was that Tim's talk, or is it?

Speaker Change: Frank I guess just on.

Frank H. Laukien: On the revenue slippage was that Tim soft or is it something else within collyn.

Frank H. Laukien: No, it was, it was, it was not only CALIN; it also was semiconductor metrology tools. Sometimes when one of these facilities, by one of our large semiconductor metrology tools, slips by a quarter or two, and those very large customers that you all know by name tell you, you know, I'll ship that in March, ship that in whatever, and Q2, and sometimes, you know, so some of that was that. Some of that was NMR and preclinical imaging, MRI related.

Frank H. Laukien: No. It was it was a it was also not only calling in and also with semiconductor metrology tools, sometimes when one of these facilities by one of our large semiconductor metrology tools get slips by a quarter or two and those very large customers that you. All know by name until you know help shape that in March.

Frank H. Laukien: Ship that in whatever in Q2.

Frank H. Laukien: So some of that was that some of that was animal or in.

Frank H. Laukien: Preclinical imaging MRI related.

Frank H. Laukien: So.

Frank H. Laukien: So, uh... This wasn't just, this was not just about Khaled, but Khaled had a very strong, and Q4, there was quite a bit pulled forward into Q4, including within, for example, the optics business, which is within Caled, has caused quite a distortion and is the primary driver of the lower organic growth in the first quarter.

Frank H. Laukien: This wasn't just this was not just on <unk>.

Operator: Okay, I appreciate it, guys.

Operator: <unk> had a very strong.

Operator: Comp year over year, I think one of the strongest and Q reward there was quite a bit pulled forward into Q4, including within for example, the optics business, which is within coward right. So those boats.

Operator: So it's caused quite a distortion.

Operator: The primary driver of.

Operator: The lower organic growth in the first quarter correct.

Speaker Change: Got it okay I appreciate it guys.

Justin Joseph Ward: All right, operator, I think we're all set with questions. So we want to thank everyone for joining us today on the call. Bruker's leadership team looks forward to meeting with you at an event or speaking with you directly during the second quarter. Please feel free to reach out to me to arrange any follow-ups. Have a great day.

Speaker Change: Alright, operator, I think we're.

Speaker Change: We're all set with questions. So.

Justin Joseph Ward: We want to thank everyone for joining us today on the call brokers leadership team looks forward to meeting with you at an event or speaking with you directly during the second quarter. Please feel free to reach out to me to arrange any follow ups have a great day.

Operator: Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining us. You may now disconnect your lines.

Speaker Change: Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We thank you for joining you may now disconnect your lines.