Mettler Toledo International Q4 2025 Mettler-Toledo International Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Mettler-Toledo International Inc Earnings Call
Speaker #1: Fourth quarter, 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.
Speaker #1: If you would like to ask a question during this time, simply press star, followed by the number one, or on your telephone keypad. If you would like to withdraw your question, again, press the star one.
Speaker #1: I would now like to turn the conference over to Adam Ullman, Head of Investor Relations. You may
Speaker #2: Hey, thanks, Jericho. And good morning,
Speaker #2: everyone. Thanks for joining us. On the call with me today is Patrick Kaltenbach, our Chief Executive Officer, and begin. Shawn Vadala, our Chief Financial Officer.
Speaker #2: Let me cover some administrative matters. This call is being webcast and is available for replay on our website at MT.com. A copy of the press release and the presentation that we'll refer to on today's call is also available on our website.
Speaker #2: This call will include forward-looking statements within the meaning of the US Securities Act of 1933 and the US Securities Exchange Act of 1934. These statements involve risks, uncertainties, and other factors that may cause our actual results, financial condition, performance, and achievements to be materially different from those expressed or implied by any forward-looking statements.
Speaker #2: For a discussion of these risks and uncertainties, see our recent annual report on Form 10-K and quarterly and current reports filed with the SEC.
Speaker #2: The company disclaims any obligation or undertaking to provide any updates or except as required by law. On today's call, we will use non-GAAP revisions to any forward-looking statement financial measures and a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in the 8-K and is available on our website.
Speaker #2: Let me now turn the call over to Patrick.
Speaker #3: Thank you, Adam, and good morning, everyone. We appreciate you joining our call today. Last night, we reported our fourth quarter financial results. The details of which are outlined for you on page three of our presentation.
Speaker #3: We had a great finish to the year with broad-based growth by geography and product category. Our team continues to execute very well in a challenging environment and delivered strong adjusted EPS growth for the quarter with excellent free cash flow conversion for the year.
Q4 2025 Mettler-Toledo International Inc Earnings Call
Speaker #3: I'm very proud of our organization's resilience and agility over the past year, as we successfully navigated challenges posed by global trade disputes and soft market conditions, and we remain agile in this dynamic environment.
Speaker #3: Looking ahead, we are very well positioned to drive growth with our spinnaker sales and marketing program and innovative product portfolio, while capitalizing on opportunities related to automation, digitalization, and onshoring investments around the world.
Speaker #1: METTLER TOLEDO INTERNATIONAL INC/ Q3 of our presentation. We had a great finish to the year with broad-based growth by geography and product category. Our team continues to execute very well in a challenging environment and deliver strong adjusted EPS growth for the quarter with excellent free cash year.
Speaker #3: Our strategic initiatives and strong culture of innovation and operational excellence are deeply embedded in the organization, and will help us continue to gain share and deliver strong financial performance.
Speaker #3: Let me now turn the call over to Shawn to cover the financial results and our guidance, and then I will come back with some additional commentary on the business and our outlook.
Speaker #1: I am very proud of our organization's resilience and agility over the flow conversion for the past year, as we successfully navigated challenges posed by global trade disputes and soft market conditions, and we remain agile in this dynamic environment.
Speaker #3: Shawn?
Speaker #2: Thanks, Patrick, and good morning, everyone. Sales in the quarter were 1.1 billion dollars, which represented an increase in local currency of 5% or 4% excluding previously communicated acquisitions.
Speaker #1: Looking ahead, we are very well positioned to drive growth with our spinnaker sales and marketing program and capitalizing on opportunities related to automation, digitalization, and onshoring investments around the world.
Speaker #2: On a US dollar reported basis, sales increased 8%. On slide number four, we show sales growth by region. Local currency sales increased 7% in the Americas, which included a 3% benefit from acquisitions.
Speaker #1: Our strategic operational excellence are deeply embedded in the organization, and will help us continue to gain share and deliver strong financial performance. Let me now turn the call over to Shawn to cover the financial results and our guidance, and then I will come back with some additional commentary on the business and our outlook.
Speaker #2: An increased 4% in Europe, and 4% in Asia rest of the world. Local currency sales in China increased 3% during the quarter. Slide number five shows local currency sales growth by region for the full year 2025.
Speaker #2: On slide number six, we summarize local currency sales growth by product area. For the quarter, laboratory sales increased 3%, while industrial increased 7%, and included a 3% benefit from recent acquisitions.
Speaker #1: Shawn?
Speaker #2: Thanks, Patrick, and good morning, everyone. Sales in the quarter were 1.1 billion dollars, which represented an increase in local currency of 5% or 4% excluding previously communicated acquisitions.
Speaker #2: Excluding acquisitions, core industrial grew grew 2%, and product inspection 7%. Food retail grew 19% in the quarter, lastly service revenue grew 8% in the quarter, including a 2% benefit from acquisitions.
Speaker #2: On a US dollar reported basis, sales increased 8%. On slide number four, we show sales growth by region. Local currency sales increased 7% in the Americas, which included a 3% benefit from acquisitions.
Speaker #2: An increased 4% in Europe, and 4% in Asia rest of the world. Local currency sales in China increased 3% during the quarter. Slide number five shows local currency sales growth by region for the full year 2025.
Speaker #2: Slide number seven summarizes our local currency sales growth by product area for the full year, 2025. Let me now move to the rest of the P&L, which is summarized on slide number eight.
Speaker #2: Gross margin was 59.8% in the quarter, a decrease of 140 basis points, and included unfavorable foreign currency of 70 basis points, and acquisition mix.
Speaker #2: On slide number six, we summarize local currency sales growth by product area. For the quarter, laboratory sales increased 3%, while industrial increased 7%, and included a 3% benefit from recent acquisitions.
Speaker #2: Our organic gross margin declined 20 basis points, excluding foreign currency, and was impacted by incremental gross tariff costs of 190 basis points. R&D amounted to 52.6 million dollars in the quarter, and was flat on a local currency basis over the prior period.
Speaker #2: Excluding acquisitions, core industrial grew 2%, and product inspection grew 7%. Food retail grew 19% in the quarter, lastly service revenue grew 8% in the quarter, including a 2% benefit from acquisitions.
Speaker #2: Slide number seven summarizes our local currency sales growth by product area for the full year 2025. Let me now move to the rest of the P&L, which is summarized on slide number eight.
Speaker #2: SG&A amounted to 259.8 million dollars, a 6% increase in local currency over the prior year, and includes sales and marketing investments. Adjusted operating profit amounted to 363 million dollars in the quarter, up 3% versus the prior year.
Speaker #2: Gross margin was 59.8% in the quarter, a decrease of 140 basis points, and included unfavorable foreign currency of 70 basis points, and acquisition mix.
Speaker #2: Adjusted operating margin was 32.1%, a decrease of 160 basis points versus the prior year. Unfavorable currency was a 100 basis point headwind to operating margin in the quarter.
Speaker #2: Our organic gross margin declined 20 basis points, excluding foreign currency, and was impacted by incremental gross tariff costs of 190 basis points. R&D amounted to 52.6 million dollars in the quarter, and was flat on a local currency basis over the prior period.
Speaker #2: We estimate the gross impact of tariffs reduced our operating profit by 7% and was a 190 basis point headwind to our operating margin. A couple of final comments on the P&L.
Speaker #2: Amortization amounted to 19.7 million dollars in the quarter, interest expense was 17.4 million dollars, and adjusted operating income amounted to 4.1 million dollars. Our effective tax rate was 19% in the quarter, this rate is before discrete items, and is adjusted for the timing of stock option exercises.
Speaker #2: 259.8 million dollars, a 6% increase in local SG&A amounted to currency over the prior year, and includes sales and marketing investments. Adjusted operating profit amounted to 363 million dollars in the quarter, up 3% versus the prior year.
Shawn Vadala: In local currency over the prior year and include sales and marketing investments. Adjusted operating profit amounted to $363 million in the quarter, up 3% versus the prior year. Adjusted operating margin was 32.1%, a decrease of 160 basis points versus the prior year. Unfavorable currency was a 100 basis point headwind to operating margin in the quarter. We estimate the gross impact of tariffs reduced our operating profit by 7% and was a 190 basis point headwind to our operating margin. A couple final comments on the P&L. Amortization amounted to $19.7 million in the quarter. Interest expense was $17.4 million, and adjusted operating income amounted to $4.1 million. Our effective tax rate was 19% in the quarter. This rate is before discrete items and is adjusted for the timing of stock option exercises.
Shawn Vadala: In local currency over the prior year and include sales and marketing investments. Adjusted operating profit amounted to $363 million in the quarter, up 3% versus the prior year. Adjusted operating margin was 32.1%, a decrease of 160 basis points versus the prior year. Unfavorable currency was a 100 basis point headwind to operating margin in the quarter. We estimate the gross impact of tariffs reduced our operating profit by 7% and was a 190 basis point headwind to our operating margin. A couple final comments on the P&L. Amortization amounted to $19.7 million in the quarter. Interest expense was $17.4 million, and adjusted operating income amounted to $4.1 million. Our effective tax rate was 19% in the quarter. This rate is before discrete items and is adjusted for the timing of stock option exercises.
Speaker #2: Adjusted operating margin was 32.1%, a decrease of 160 basis points versus the prior year. Unfavorable currency was a 100 basis point headwind to operating margin in the quarter.
Speaker #2: This also excludes a 19.5 million dollar discrete tax benefit related to the settlement of a tax audit. Fully diluted shares amounted to 20.4 million, which is approximately a 3% decline from the prior year.
Speaker #2: We estimate the gross impact of tariffs reduced our operating profit by 7% and was a 190 basis point headwind to our operating margin. A couple final comments on the P&L.
Speaker #2: Adjusted EPS for the quarter was 13 dollars and 36 cents, an 8% increase over the prior year. Incremental tariff costs were a gross headwind to EPS of 7%.
Speaker #2: Amortization amounted to 19.7 million dollars in the quarter, interest expense was 17.4 million dollars, and adjusted operating income amounted to 4.1 million dollars. Our effective tax rate was 19% in the quarter, this rate is before discrete items, and is adjusted for the timing of stock option exercises.
Speaker #2: On a reported basis in the quarter, EPS was 13 dollars and 98 cents, as compared to 11 dollars and 96 cents in the prior year.
Speaker #2: Reported EPS in the quarter included 28 cents of purchased intangible amortization, 18 cents of restructuring costs, a 14 cent net benefit from acquisition related items, a 1 cent tax headwind related to the timing of stock option exercises, and a 95 cent discrete tax benefit.
Speaker #2: This also excludes a 19.5 million dollar discrete tax benefit related to the settlement of a tax audit. Fully diluted shares amounts to 20.4 million, which is approximately a 3% decline from the prior year.
Shawn Vadala: This also excludes a $19.5 million discrete tax benefit related to the settlement of a tax audit. Fully diluted shares amounted to 20.4 million, which is approximately a 3% decline from the prior year. Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year. Incremental tariff costs were a gross headwind to EPS of 7%. On a reported basis in the quarter, EPS was $13.98 as compared to $11.96 in the prior year. Reported EPS in the quarter included $0.28 of purchased intangible amortization, $0.18 of restructuring costs, a $0.14 net benefit from acquisition-related items, a $0.01 tax headwind related to the timing of stock option exercises, and a $0.95 discrete tax benefit. Slide number nine summarizes our full year 2025 results. Local currency sales increased 3% for the year, adjusted operating profit declined 1%, and our operating margin contracted 140 basis points.
Shawn Vadala: This also excludes a $19.5 million discrete tax benefit related to the settlement of a tax audit. Fully diluted shares amounted to 20.4 million, which is approximately a 3% decline from the prior year. Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year. Incremental tariff costs were a gross headwind to EPS of 7%. On a reported basis in the quarter, EPS was $13.98 as compared to $11.96 in the prior year. Reported EPS in the quarter included $0.28 of purchased intangible amortization, $0.18 of restructuring costs, a $0.14 net benefit from acquisition-related items, a $0.01 tax headwind related to the timing of stock option exercises, and a $0.95 discrete tax benefit. Slide number nine summarizes our full year 2025 results. Local currency sales increased 3% for the year, adjusted operating profit declined 1%, and our operating margin contracted 140 basis points.
Speaker #2: Slide number nine summarizes our full year 2025 results. Local currency sales increased 3% for the year, adjusted operating profit declined 1%, and our operating margin contracted 140 basis points.
Speaker #2: Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year. Incremental tariff costs were a gross headwind to EPS of 7%.
Speaker #2: On a reported basis in the quarter, EPS was 13 dollars and 98 cents, as compared to 11 dollars and 96 cents in the prior year.
Speaker #2: 4%. Excluding the impact of 2023 Adjusted EPS increased shipping delays that benefited 2024 results, we estimate local currency sales grew 4% in 2025, operating margin declined 80 basis points, and adjusted EPS grew 8%.
Speaker #2: Reported EPS in the quarter included 28 cents of purchase intangible amortization, 18 cents of restructuring costs, a 14 cent net benefit from acquisition related items, a 1 cent tax headwind related to the timing of stock option exercises, and a 95 cent discrete tax benefit.
Speaker #2: Unfavorable foreign currency negative negatively impacted our operating margin by 50 basis points in 2025. Gross incremental tariff costs was a headwind to operating profit by 50 million dollars, operating margin by 130 basis points, and EPS growth by 5% in 2025.
Speaker #2: Slide number nine summarizes our full-year 2025 results. Local currency sales increased 3% for the year, adjusted operating profit declined 1%, and our operating margin contracted 140 basis points.
Speaker #2: That covers the P&L, and let me now comment on adjusted free cash flow which amounted to 878 million dollars in 2025, a conversion ratio of 99% of our adjusted net income.
Speaker #2: Adjusted EPS increased 4%. Excluding the impact of 2023 shipping delays that benefited 2024 results, we estimate local currency sales grew 4% in 2025, operating margin declined 80 basis points, and adjusted EPS grew 8%.
Shawn Vadala: Adjusted EPS increased 4%. Excluding the impact of 2023 shipping delays that benefited 2024 results, we estimate local currency sales grew 4% in 2025, operating margin declined 80 basis points, and adjusted EPS grew 8%. Unfavorable foreign currency negatively impacted our operating margin by 50 basis points in 2025. Gross incremental tariff costs was a headwind to operating profit by $50 million, operating margin by 130 basis points, and EPS growth by 5% in 2025. That covers the P&L, and let me now comment on adjusted free cash flow, which amounted to $878 million in 2025, a conversion ratio of 99% of our adjusted net income. DSO was 35 days, while ITO was 4.2 times. Let me now turn to our guidance for Q1 in the full year 2026. As you review our guidance, please keep in mind the following factors. First, our guidance assumes U.S.
Shawn Vadala: Adjusted EPS increased 4%. Excluding the impact of 2023 shipping delays that benefited 2024 results, we estimate local currency sales grew 4% in 2025, operating margin declined 80 basis points, and adjusted EPS grew 8%. Unfavorable foreign currency negatively impacted our operating margin by 50 basis points in 2025. Gross incremental tariff costs was a headwind to operating profit by $50 million, operating margin by 130 basis points, and EPS growth by 5% in 2025. That covers the P&L, and let me now comment on adjusted free cash flow, which amounted to $878 million in 2025, a conversion ratio of 99% of our adjusted net income. DSO was 35 days, while ITO was 4.2 times. Let me now turn to our guidance for Q1 in the full year 2026. As you review our guidance, please keep in mind the following factors. First, our guidance assumes U.S.
Speaker #2: DSO was 35 days, while ITO was 4.2 times. Let me now turn to our guidance for the first quarter and the full year 2026.
Speaker #2: Unfavorable foreign currency negative negatively atively impacted our operating margin by 50 basis points in 2025. Gross incremental tariff costs was a headwind to operating profit by 50 million dollars, operating margin by 130 basis points, and EPS growth by 5% in 2025.
Speaker #2: As your review our guidance, please keep in mind the following factors. First, our guidance assumes U.S. import tariffs as well as the impact of retailatory tariffs from other countries will remain in effect at current levels.
Speaker #2: Second, while we acknowledge that headlines from some end markets like life sciences have been more favorable recently, geopolitical tensions remain elevated, and we assume customers are more cautious with their investments to start the year with gradual improvements throughout the year.
Speaker #2: That covers the P&L, and let me now comment on adjusted free cash flow which amounted to 878 million dollars in 2025, a conversion ratio of 99% of our adjusted net income.
Speaker #2: However, on a full year basis, our forecast does not assume a significant improvement in market conditions in 2026 versus last year. Third, we feel very confident in our ability to exclude to execute on our growth and productivity initiatives and believe we are well positioned to gain market share regardless of the macro environment.
Speaker #2: DSO was 35 days, while ITO was 4.2 times. Let me now turn to our guidance for the first quarter and the full year 2026.
Speaker #2: As you review our guidance, please keep in mind the following factors. First, our guidance assumes U.S. import tariffs as well as the impact of retailatory tariffs from other countries will remain in effect at current levels.
Shawn Vadala: Import tariffs, as well as the impact of retaliatory tariffs from other countries, will remain in effect at current levels. Second, while we acknowledge that headlines from some end markets like life sciences have been more favorable recently, geopolitical tensions remain elevated, and we assume customers are more cautious with their investments to start the year with gradual improvements throughout the year. However, on a full-year basis, our forecast does not assume a significant improvement in market conditions in 2026 versus last year. Third, we feel very confident in our ability to execute on our growth and productivity initiatives and believe we are well-positioned to gain market share regardless of the macro environment. Now turning to our guidance. For the full year 2026, our local currency sales growth forecast is unchanged at approximately 4%, or approximately 3.5% excluding our previously announced acquisitions.
Shawn Vadala: Import tariffs, as well as the impact of retaliatory tariffs from other countries, will remain in effect at current levels. Second, while we acknowledge that headlines from some end markets like life sciences have been more favorable recently, geopolitical tensions remain elevated, and we assume customers are more cautious with their investments to start the year with gradual improvements throughout the year. However, on a full-year basis, our forecast does not assume a significant improvement in market conditions in 2026 versus last year. Third, we feel very confident in our ability to execute on our growth and productivity initiatives and believe we are well-positioned to gain market share regardless of the macro environment. Now turning to our guidance. For the full year 2026, our local currency sales growth forecast is unchanged at approximately 4%, or approximately 3.5% excluding our previously announced acquisitions.
Speaker #2: Now turning to our guidance, for the full year 2026, our local currency sales growth forecast is unchanged at approximately 4%. For approximately three and a half percent, excluding our previously announced acquisitions.
Speaker #2: Second, while we acknowledge that headlines from some end markets like life sciences have been more favorable recently, geopolitical tensions remain elevated, and we assume customers are more cautious with their investments to start the year with gradual improvements throughout the year.
Speaker #2: Our operating margin is expected to be up 60 to 70 basis points excluding the impact of currency. Which is flattish to up slightly on a reported basis.
Speaker #2: However, on a full year basis, our forecast does not assume a significant improvement in market conditions in 2026 versus last year. Third, we feel very confident in our ability to exclude to execute on our growth and productivity initiatives and believe we are well positioned to gain market share regardless of the macro environment.
Speaker #2: Adjusted EPS is forecast to be in the range of 46 dollars and 5 cents to 46 dollars and 70 cents, which represents a growth rate of 8 to 9%.
Speaker #2: rates, foreign exchange is estimated to At recent spot be a 1% benefit to sales growth and a slight headwind to EPS. For the first quarter of 2026, we expect local currency sales to grow approximately 3%.
Speaker #2: Now, turning to our guidance: for the full year 2026, our local currency sales growth forecast is unchanged at approximately 4%, or approximately three and a half percent excluding our previously announced acquisitions.
Speaker #2: Operating margin is expected to decrease approximately 100 basis points at the midpoint of our range, or flat excluding unfavorable currency. We expect adjusted EPS to be in the range of 8 dollars and 60 cents to 8 dollars and 75 cents, a growth rate of 5 to 7%.
Speaker #2: Our operating margin is expected to be up 60 to 70 basis points excluding the impact of currency. Which is flattish to up slightly on a reported basis.
Shawn Vadala: Our operating margin is expected to be up 60 to 70 basis points excluding the impact of currency, which is flattish to up slightly on a reported basis. Adjusted EPS is forecast to be in the range of $46.05 to 46.70, which represents a growth rate of 8 to 9%. At recent spot rates, foreign exchange is estimated to be a 1% benefit to sales growth and a slight headwind to EPS. For Q1 2026, we expect local currency sales to grow approximately 3%. Operating margin is expected to decrease approximately 100 basis points at the midpoint of our range, or flat excluding unfavorable currency. We expect adjusted EPS to be in the range of $8.60 to 8.75, a growth rate of 5 to 7%.
Shawn Vadala: Our operating margin is expected to be up 60 to 70 basis points excluding the impact of currency, which is flattish to up slightly on a reported basis. Adjusted EPS is forecast to be in the range of $46.05 to 46.70, which represents a growth rate of 8 to 9%. At recent spot rates, foreign exchange is estimated to be a 1% benefit to sales growth and a slight headwind to EPS. For Q1 2026, we expect local currency sales to grow approximately 3%. Operating margin is expected to decrease approximately 100 basis points at the midpoint of our range, or flat excluding unfavorable currency. We expect adjusted EPS to be in the range of $8.60 to 8.75, a growth rate of 5 to 7%.
Speaker #2: Adjusted EPS is forecast to be in the range of 46 dollars and 5 cents, to 46 dollars and 70 cents, which represents a growth rate of 8 to 9%.
Speaker #2: Currency for the quarter at recent spot rates would benefit first quarter sales by approximately 4% and would be neutral to adjusted EPS. Some further comments on our 2026 guidance.
Speaker #2: At recent spot rates, foreign exchange is estimated to be a 1% benefit to sales growth and a slight headwind to EPS. For the first quarter of 2026, we expect local currency sales to grow approximately 3%.
Speaker #2: We expect total amortization including purchased intangible amortization to be approximately 78 million dollars. Purchased intangible amortization is excluded from adjusted EPS and is estimated at 27 million dollars on a pre-tax basis or approximately 1 dollar and 4 cents.
Speaker #2: Operating margin is expected to decrease approximately 100 basis points at the midpoint of our range, or flat excluding unfavorable currency. We expect adjusted EPS to be in the range of 8 dollars and 60 cents, to 8 dollars and 75 cents, a growth rate of 5 to 7%.
Speaker #2: Interest expenses forecast at 70 million dollars for the year. Other income is estimated at approximately 19 million dollars which is up from our previous guidance and is due to updated pension accounting that is partly offset by higher pension costs that are now that are included in operating profit.
Speaker #2: Currency for the quarter at recent spot rates would benefit first-quarter sales by approximately 4% and would be neutral to adjusted EPS. Some further comments on our 2026 guidance.
Shawn Vadala: Currency for the quarter at recent spot rates would benefit Q1 sales by approximately 4% and would be neutral to adjusted EPS. Some further comments on our 2026 guidance. We expect total amortization, including purchased intangible amortization, to be approximately $78 million. Purchased intangible amortization is excluded from adjusted EPS and is estimated at $27 million on a pretax basis or approximately $1.04. Interest expenses forecast at $70 million for the year. Other income is estimated at approximately $19 million, which is up from our previous guidance and is due to updated pension accounting that is partly offset by higher pension costs that are now included in operating profit. We expect our tax rate before discrete items will remain at 19% in 2026.
Shawn Vadala: Currency for the quarter at recent spot rates would benefit Q1 sales by approximately 4% and would be neutral to adjusted EPS. Some further comments on our 2026 guidance. We expect total amortization, including purchased intangible amortization, to be approximately $78 million. Purchased intangible amortization is excluded from adjusted EPS and is estimated at $27 million on a pretax basis or approximately $1.04. Interest expenses forecast at $70 million for the year. Other income is estimated at approximately $19 million, which is up from our previous guidance and is due to updated pension accounting that is partly offset by higher pension costs that are now included in operating profit. We expect our tax rate before discrete items will remain at 19% in 2026.
Speaker #2: We expect our tax rate before discrete items will remain at 19% in 2026. Free cash flow is expected to be approximately 900 million dollars in 2026 which is an increase of 5% on a per-share basis.
Speaker #2: We expect total amortization, including purchase intangible amortization, to be approximately 78 million dollars. Purchase intangible amortization is excluded from adjusted EPS and is estimated at 27 million dollars on a pre-tax basis or approximately 1 dollar and 4 cents.
Speaker #2: With the first quarter approximately 100 million dollars which is impacted by the timing of tax payments. Share repurchases are expected to be in the range of 800 and 25 to 875 million dollars.
Speaker #2: Interest expenses are forecast at $70 million for the year. Other income is estimated at approximately $19 million, which is up from our previous guidance and is due to updated pension accounting that is partly offset by higher pension included in operating profit.
Speaker #2: That's it for my side and I'll now turn it back to Patrick. Thanks, Sean. Let me start with some comments on our operating businesses, starting with flat which had modest growth in the quarter against strong growth in the underlying organic sales growth for the full year.
Speaker #2: We expect our tax rate before discrete items will remain at 19% in 2026. Free cash flow is expected to be approximately $900 million in 2026, which is an increase of 5% on a per-share basis.
Speaker #2: results reflect robust bioprocessing growth, especially prior year and good with single-use consumables, Our which was offset in part by softer demand from biotech, academia, and the chemical sector.
Shawn Vadala: Free cash flow is expected to be approximately $900 million in 2026, which is an increase of 5% on a per-share basis, with the first quarter approximately $100 million, which is impacted by the timing of tax payments. Share repurchases are expected to be in the range of $825 to $875 million. That's it from my side, and I'll now turn it back to Patrick.
Shawn Vadala: Free cash flow is expected to be approximately $900 million in 2026, which is an increase of 5% on a per-share basis, with the first quarter approximately $100 million, which is impacted by the timing of tax payments. Share repurchases are expected to be in the range of $825 to $875 million. That's it from my side, and I'll now turn it back to Patrick.
Speaker #2: While headlines more favorable recently, we cautious with their investments to start the year. Our unique expect customers to still be go-to-market strategies will ensure that we are very well positioned to capitalize on our customers' growing needs for equipment replacement going forward.
Speaker #2: With the first quarter approximately $100 million, which is impacted by the timing of tax payments. Share repurchases are expected to be in the range of $825 to $875 million.
Speaker #2: That's it from my side, and I'll now turn it back to Patrick. Thanks, Shawn. Let me start with some comments on our operating businesses, starting with Flat, which had modest growth in the quarter.
Speaker #2: Our innovative portfolio remains an important competitive advantage and we continue to invest to further differentiate ourselves from the competition. For example, we recently launched an entirely new electronic pipette called the Vero that is lightweight and has a very compact design.
Patrick Kaltenbach: Thanks, Shawn. Let me start with some comments on our operating businesses, starting with Lab which had modest growth in the quarter against strong growth in the prior year and good underlying organic sales growth for the full year. Our results reflect robust bioprocessing growth, especially with single-use consumables, which was offset in part by softer demand from biotech, academia, and the chemical sector. While headlines for pharma and life sciences markets have been more favorable recently, we expect customers to still be cautious with their investments to start the year. Our unique go-to-market strategies will ensure that we are very well-positioned to capitalize on our customers' growing needs for equipment replacement going forward. Our innovative portfolio remains an important competitive advantage, and we continue to invest to further differentiate ourselves from the competition.
Patrick Kaltenbach: Thanks, Shawn. Let me start with some comments on our operating businesses, starting with Lab which had modest growth in the quarter against strong growth in the prior year and good underlying organic sales growth for the full year. Our results reflect robust bioprocessing growth, especially with single-use consumables, which was offset in part by softer demand from biotech, academia, and the chemical sector. While headlines for pharma and life sciences markets have been more favorable recently, we expect customers to still be cautious with their investments to start the year. Our unique go-to-market strategies will ensure that we are very well-positioned to capitalize on our customers' growing needs for equipment replacement going forward. Our innovative portfolio remains an important competitive advantage, and we continue to invest to further differentiate ourselves from the competition.
Speaker #2: Again, strong growth in the prior year, and good underlying organic sales growth for the full year. Our results reflect robust bioprocessing growth, especially with single-use consumables, which was offset in part by softer demand from biotech, academia, and the chemical sector.
Speaker #2: It has an exceptionally long battery life and can complete 2,800 pipetting cycles on a single charge. It is also helpful when working with delicate adjust flow rates which is very example.
Speaker #2: While headlines for pharma and life sciences markets have been more favorable recently, we expect customers to still be cautious with their investments to start the year.
Speaker #2: Our cells or nucleic acids for brought to market in recent years and we many exciting lab innovations we've have a deep pipeline for the future.
Speaker #2: Our unique go-to-market strategies will ensure that we are very well positioned to capitalize on our customers' growing needs for equipment replacement going forward. Our innovative portfolio remains an important competitive differentiator that helps differentiate ourselves from the competition.
Speaker #2: Turning to our to industrial we have modest growth in our core unique in that it allows scientists to industrial business this quarter including strong growth in China against easy comparisons.
Speaker #2: For example, we recently launched an entirely new electronic pipette called Avero, that is lightweight and has a very compact design. It has an exceptionally long battery life and can complete 2,800 pipetting cycles on a single charge.
Patrick Kaltenbach: For example, we recently launched an entirely new electronic pipette called the Vero that is lightweight and has a very compact design. It has an exceptionally long battery life and can complete 2,800 pipetting cycles on a single charge. It is also unique in that it allows scientists to adjust flow rates, which is very helpful when working with delicate cells or nucleic acids, for example. Our Vero introduction complements the many exciting lab innovations we've brought to market in recent years, and we have a deep pipeline for the future. Turning to our industrial, we had modest growth in our core industrial business this quarter, including strong growth in China against easy comparisons. Given the soft market conditions over the past year, we are pleased with the good sales growth core industrial delivered in 2025.
Patrick Kaltenbach: For example, we recently launched an entirely new electronic pipette called the Vero that is lightweight and has a very compact design. It has an exceptionally long battery life and can complete 2,800 pipetting cycles on a single charge. It is also unique in that it allows scientists to adjust flow rates, which is very helpful when working with delicate cells or nucleic acids, for example. Our Vero introduction complements the many exciting lab innovations we've brought to market in recent years, and we have a deep pipeline for the future. Turning to our industrial, we had modest growth in our core industrial business this quarter, including strong growth in China against easy comparisons. Given the soft market conditions over the past year, we are pleased with the good sales growth core industrial delivered in 2025.
Speaker #2: Given the soft market conditions over the past year, we are growth core industrial delivered in pleased with the good sales 2025. However, market demand in most geographies remains subdued and we have maintained our full year forecast for modest identifying new growth opportunities and we believe we are well positioned to capitalize on investments in automation, digitalization, replacement demand, and onshoring in the future.
Speaker #2: It is also unique in that it allows scientists to adjust flow rates which is very helpful when working with delicate cells or nucleic acids, for example.
Speaker #2: Our Avero introduction complements the many exciting lab innovations we've brought to market in recent years, and we have a deep pipeline for the future.
Speaker #2: Our industrial portfolio is in excellent shape. And to support growth. Our teams remain active in growing demand for automation applications, we recently introduced new high-speed data communication features and protocols across our smart automation weighing indicators that ensure the compatibility of our devices with our customers' IT and OT ecosystems.
Speaker #2: Turning to our to industrial, we have modest growth in our core industrial business this quarter, including strong growth in China against easy comparisons. Given the soft market conditions over the past year, we are pleased with the good sales growth core industrial delivered in 2025.
Speaker #2: We have partnered with leading MES providers to enable seamless integration of our intelligent weighing devices through standardized interfaces into factory automation systems. Our solutions assure GMP-compliant batch records and enable intuitive operator applications, helping customers increase efficiency and reduce errors as IT and OT environments continue to converge.
Speaker #2: However, market demand in most geographies remains subdued, and we have maintained our full-year forecast for modest growth. Our teams remain active in identifying new growth opportunities, and we believe we are well positioned to capitalize on investments in automation, digitalization, replacement demand, and onshoring in the future.
Patrick Kaltenbach: However, market demand in most geographies remains subdued, and we have maintained our full-year forecast for modest growth. Our teams remain active in identifying new growth opportunities, and we believe we are well-positioned to capitalize on investments in automation, digitalization, replacement demand, and onshoring in the future. Our industrial portfolio is in excellent shape, and to support growing demand for automation applications, we recently introduced new high-speed data communication features and protocols across our smart automation weighing indicators that ensure the compatibility of our devices with our customers' IT and OT ecosystems. We have partnered with leading MES providers to enable seamless integration of our intelligent weighing devices through standardized interfaces into factory automation systems. Our solutions assure GMP-compliant batch records and enable intuitive operator applications, helping customers increase efficiency and reduce errors as IT and OT environments continue to converge.
Patrick Kaltenbach: However, market demand in most geographies remains subdued, and we have maintained our full-year forecast for modest growth. Our teams remain active in identifying new growth opportunities, and we believe we are well-positioned to capitalize on investments in automation, digitalization, replacement demand, and onshoring in the future. Our industrial portfolio is in excellent shape, and to support growing demand for automation applications, we recently introduced new high-speed data communication features and protocols across our smart automation weighing indicators that ensure the compatibility of our devices with our customers' IT and OT ecosystems. We have partnered with leading MES providers to enable seamless integration of our intelligent weighing devices through standardized interfaces into factory automation systems. Our solutions assure GMP-compliant batch records and enable intuitive operator applications, helping customers increase efficiency and reduce errors as IT and OT environments continue to converge.
Speaker #2: Turning to product inspection, sales as we have capitalized on our excellent portfolio and we believe our organic sales growth in 2025 was well ahead of market growth.
Speaker #2: Our industrial portfolio is in excellent shape. And to support growing demand for automation applications, we recently introduced new high-speed data communication features and protocols across our smart automation weighing indicators, that ensure the compatibility of our devices with our customers' IT and OT ecosystems.
Speaker #2: We continue to enhance our portfolio and recently introduced our new X3 series of X-ray solutions for end-of-line inspections of loose products like prescription tablets and pills or food like nuts, fruits, and grains.
Speaker #2: We continue to enhance our portfolio and recently introduced our new X3 series of X-ray solutions for end-of-line inspections of loose products like prescription tablets and pills or food like nuts, fruits, and growth in the fourth quarter was very strong items or food items both single and dual energy The capabilities and is very differentiated in the market.
Speaker #2: We have partnered with leading MES providers to enable seamless integration of our intelligent weighing devices through standardized interfaces into factory automation systems. Our solutions assure GMP-compliant batch records and enable intuitive operator applications, helping customers increase efficiency and reduce errors as IT and OT environments continue to converge.
Speaker #2: sales grew strongly against easy year-go Lastly, food retail comparisons. While our food retail business tends to be lumpy, we were very happy with its growth in 2025.
Speaker #2: Turning to product inspection, sales growth in the fourth quarter was very strong as we have capitalized on, believe our organic sales growth in 2025 was well ahead of market growth.
Patrick Kaltenbach: Turning to product inspection, sales growth in the Q4 was very strong as we have capitalized on our excellent portfolio, and we believe our organic sales growth in 2025 was well ahead of market growth. We continue to enhance our portfolio and recently introduced our new X3 series of X-ray solutions for end-of-line inspections of loose products like prescription tablets and pills or food items like nuts, fruits, and grains. The X3 series offers both single and dual energy capabilities and is very differentiated in the market. Lastly, food retail sales grew strongly against easy year-ago comparisons. While our food retail business tends to be lumpy, we were very happy with its growth in 2025. Now let me make some additional comments by geography, starting in the Americas, which had good growth across most of the portfolio, especially with our industrial and retail solutions.
Patrick Kaltenbach: Turning to product inspection, sales growth in the Q4 was very strong as we have capitalized on our excellent portfolio, and we believe our organic sales growth in 2025 was well ahead of market growth. We continue to enhance our portfolio and recently introduced our new X3 series of X-ray solutions for end-of-line inspections of loose products like prescription tablets and pills or food items like nuts, fruits, and grains. The X3 series offers both single and dual energy capabilities and is very differentiated in the market. Lastly, food retail sales grew strongly against easy year-ago comparisons. While our food retail business tends to be lumpy, we were very happy with its growth in 2025. Now let me make some additional comments by geography, starting in the Americas, which had good growth across most of the portfolio, especially with our industrial and retail solutions.
Speaker #2: Now let me make some additional comments by geography starting in good growth across most of the portfolio, especially with our industrial and retail solutions.
Speaker #2: the Americas which had bioprocessing growth. Turning to Europe, our fourth quarter results were better than expected due to very strong performance from our product inspection business.
Speaker #2: We continue to enhance our portfolio and recently introduced our new X3 series of X-ray solutions for end-of-line inspections of loose products like prescription tablets and pills, or food items such as nuts, fruits, and grains.
Speaker #2: The X3 series offers both single and dual-energy capabilities and is very differentiated in the market. Lastly, food retail sales grew strongly against easy year-go comparisons.
Speaker #2: For the year, our European market organizations delivered good results despite soft economic conditions in some Western European countries as we continue to benefit from our spinnaker sales and marketing initiatives and innovative portfolio.
Speaker #2: However, economic conditions in Europe are mixed and we do not expect in significant improvement in market demand 2026. Finally, Asia and the rest of the world had good growth in the fourth quarter and was largely largely in line with our expectations.
Speaker #2: While our food retail business tends to be lumpy, we were very happy with its growth in 2025. Now let me make some additional comments by geography, starting in the Americas which had good growth across most of the portfolio, especially with our industrial and retail solutions.
Speaker #2: Growth in our laboratory business was good and included very strong bioprocessing growth. Turning to Europe, our fourth quarter results were better than expected due to very strong performance from our product inspection business.
Patrick Kaltenbach: Growth in our laboratory business was good and included very strong bioprocessing growth. Turning to Europe, our fourth quarter results were better than expected due to very strong performance from our product inspection business. For the year, our European market organizations delivered good results despite soft economic conditions in some Western European countries as we continue to benefit from our Spinnaker sales and marketing initiatives and innovative portfolio. However, economic conditions in Europe are mixed, and we do not expect significant improvement in market demand in 2026. Finally, Asia and the rest of the world had good growth in the fourth quarter and was largely in line with our expectations. Our business in China grew 3%, led by good demand for industrial products from biopharma customers.
Patrick Kaltenbach: Growth in our laboratory business was good and included very strong bioprocessing growth. Turning to Europe, our fourth quarter results were better than expected due to very strong performance from our product inspection business. For the year, our European market organizations delivered good results despite soft economic conditions in some Western European countries as we continue to benefit from our Spinnaker sales and marketing initiatives and innovative portfolio. However, economic conditions in Europe are mixed, and we do not expect significant improvement in market demand in 2026. Finally, Asia and the rest of the world had good growth in the fourth quarter and was largely in line with our expectations. Our business in China grew 3%, led by good demand for industrial products from biopharma customers.
Speaker #2: For the year, our European market organizations delivered good results despite soft economic conditions in some Western European countries, as we continue to benefit from our spinnaker sales and marketing initiatives and innovative portfolio.
Speaker #2: more steady but as we know, from the past, things can change quickly. In markets outside of China, we had very good growth against difficult comparisons in the fourth quarter.
Speaker #2: However, economic conditions in Europe are mixed, and we do not expect significant improvement in market demand in 2026. Finally, Asia and the rest of the world had good growth in the fourth quarter and was largely in line with our expectations.
Speaker #2: outside of China were Emerging markets 2025 and grew above 18% of our sales in our company average due to our dedicated resources and growth initiatives for these countries.
Speaker #2: Our business in China grew 3%, led by good demand for industrial products from biopharma customers. Lab products were flattish and our team remains very engaged with helping customers to help them address new China pharmacopeia regulations including stricter minimum weighing standards and quality quality monitoring of out-of-pure water among others.
Speaker #2: Emerging markets are an important component of our growth strategy and we expect above-average sales growth over the coming years. In summary, we delivered another year of solid growth despite ongoing market headwinds as our team leveraged our sophisticated go-to-market strategies and strong product and service offering.
Patrick Kaltenbach: Lab products were flattish, and our team remains very engaged with helping customers to help them address new China Pharmacopoeia regulations, including stricter minimum weighing standards and quality monitoring of also pure water, among others. Market conditions in China have recently been more steady, but as we know from the past, things can change quickly. In markets outside of China, we had very good growth against difficult comparisons in the fourth quarter. Emerging markets outside of China were 18% of our sales in 2025 and grew above our company average due to our dedicated resources and growth initiatives in these countries. Emerging markets are an important component of our growth strategy, and we expect above-average sales growth over the coming years. In summary, we delivered another year of solid growth despite ongoing market headwinds as our team leveraged our sophisticated go-to-market strategies and strong product and service offering.
Patrick Kaltenbach: Lab products were flattish, and our team remains very engaged with helping customers to help them address new China Pharmacopoeia regulations, including stricter minimum weighing standards and quality monitoring of also pure water, among others. Market conditions in China have recently been more steady, but as we know from the past, things can change quickly. In markets outside of China, we had very good growth against difficult comparisons in the fourth quarter. Emerging markets outside of China were 18% of our sales in 2025 and grew above our company average due to our dedicated resources and growth initiatives in these countries. Emerging markets are an important component of our growth strategy, and we expect above-average sales growth over the coming years. In summary, we delivered another year of solid growth despite ongoing market headwinds as our team leveraged our sophisticated go-to-market strategies and strong product and service offering.
Speaker #2: Market conditions in China have recently been more steady, but as we know, from the past things can change quickly. In markets outside of China, we had very good growth against difficult comparisons in the fourth quarter.
Speaker #2: Our team's resilience and agility and our pricing supply chain productivity and cost-saving initiatives were pivotal in navigating tariff challenges and government policy uncertainties throughout 2025.
Speaker #2: We ask fairly focused on driving growth in 2026. We will continue to benefit from our strong global leadership positions diversified customer base significant installed innovative product offering and base.
Speaker #2: Emerging markets outside of China were 18% of our sales in 2025 and grew above our company average due to our dedicated resources and growth initiatives in these countries.
Speaker #2: Emerging markets are an important component of our growth strategy, and we expect above-average sales growth over the coming years. In summary, we delivered another year of solid growth despite ongoing market headwinds, as our team leveraged our sophisticated go-to-market strategies and strong product and service offering.
Speaker #2: Service and faster growing emerging markets will remain tail tailwinds and we have accelerated our digital capabilities to identify and pursue growth opportunities increasing the effectiveness of our global sales increasing the effectiveness of our global organization.
Speaker #2: Our market-leading solutions and innovative portfolio uniquely sales positions us to meet increasing customer customer demand for automation and digitalization solutions as well as faster growing segments.
Speaker #2: Our team's resilience and agility and our pricing supply chain productivity and cost-saving initiatives were pivotal in navigating tariff challenges and government policy uncertainties throughout 2025.
Patrick Kaltenbach: Our team's resilience and agility in our pricing, supply chain, productivity, and cost-saving initiatives were pivotal in navigating tariff challenges and government policy uncertainties throughout 2025. We are squarely focused on driving growth in 2026. We will continue to benefit from our strong global leadership positions, diversified customer base, innovative product offering, and significant installed base. Service and faster-growing emerging markets will remain tailwinds, and we have accelerated our digital capabilities to identify and pursue growth opportunities, increasing the effectiveness of our global sales organization. Our market-leading solutions and innovative portfolio uniquely positions us to meet increasing customer demand for automation and digitalization solutions as well as faster-growing segments. We also look forward to capitalizing on future growth opportunities with customer replacement cycles and investments in on- and nearshoring activities over the coming years. Now this concludes our prepared remarks.
Patrick Kaltenbach: Our team's resilience and agility in our pricing, supply chain, productivity, and cost-saving initiatives were pivotal in navigating tariff challenges and government policy uncertainties throughout 2025. We are squarely focused on driving growth in 2026. We will continue to benefit from our strong global leadership positions, diversified customer base, innovative product offering, and significant installed base. Service and faster-growing emerging markets will remain tailwinds, and we have accelerated our digital capabilities to identify and pursue growth opportunities, increasing the effectiveness of our global sales organization. Our market-leading solutions and innovative portfolio uniquely positions us to meet increasing customer demand for automation and digitalization solutions as well as faster-growing segments. We also look forward to capitalizing on future growth opportunities with customer replacement cycles and investments in on- and nearshoring activities over the coming years. Now this concludes our prepared remarks.
Speaker #2: We also look forward to capitalizing on future growth opportunities with customer replacement cycles and investments in on and near-shoring activities over the coming years.
Speaker #2: We are fairly focused on driving growth in 2026. We will continue to benefit from our strong global leadership positions, diversified customer base, innovative product offering, and significant installed base.
Speaker #2: Now this concludes our prepared open the line of questions.
Speaker #2: remarks. Operator, I'd like to
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Speaker #2: Service and faster growing emerging markets will remain tail tailwinds and we have accelerated our digital capabilities to identify and pursue growth opportunities increasing the effectiveness of our global sales increasing the effectiveness of our global sales organization.
Speaker #1: If you would like speakerphone on your device, please pick up your handset to ensure that your phone is not on mute. When asking your question, we do request for today's session that you please limit
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Speaker #2: Our market-leading solutions and innovative portfolio uniquely position us to meet increasing customer demand for automation and digitalization solutions, as well as faster-growing segments.
Speaker #1: follow-up. Our first question comes from Patrick Donnelly from City. Please go ahead.
Speaker #2: We also look forward to capitalizing on future growth opportunities with customer replacement cycles and investments in on- and near-shoring activities over the coming years.
Speaker #2: Hey, guys. Thank you for taking the questions. Maybe on on the one two commentary Patrick, you talked about, you know, baking in that customers in spite of some positive headlines to your point on pharma and life sky customers you're baking in a
Speaker #2: Now this concludes our prepared remarks. Operator, I'd like to open the line now for questions. Thank you. We will now begin the question and answer session.
Patrick Kaltenbach: Operator, I'd like to open the line now for questions.
Patrick Kaltenbach: Operator, I'd like to open the line now for questions.
Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask a question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and one follow-up. Our first question comes from Patrick Donnelly from Citi. Please go ahead.
Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask a question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and one follow-up. Our first question comes from Patrick Donnelly from Citi. Please go ahead.
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Speaker #2: little more cautious to start the year. Is that something you're hearing, you know, through the first to one question and one month and change here or is it just obviously there's the typical network conservatism?
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Speaker #2: picking up in the market or more just, "Hey, we don't want to bake in any Just wondering if that's something you're improvement just yet.
Speaker #2: Let's let's see how it plays out." So would it be helpful to just talk through that one two
Speaker #2: Question: We do request, when asking you for today's session, that you please limit to one question and one follow-up. Our first question comes from Patrick Donnelly from Citi.
Speaker #2: guide? Yeah.
Speaker #3: Hey, thanks Patrick. And I'll let Sean comment on this as well, but maybe to my comment on the headlines again, headlines have been still pretty volatile while they have been better on the pharma and life sciences side.
Speaker #3: We all appreciate there's still more uncertainty in the market out there. And this also across the broader portfolio and the broader markets we serve, still leads to longer deal cycles etc.
Speaker #2: Please go
Speaker #2: Ahead. Hey guys, thank you for taking the—
Patrick Donnelly: Hey guys. Thank you for taking the questions. Maybe on the Q1 commentary, Patrick, you talked about baking in that customers, in spite of some positive headlines to your point on pharma and lifestyle, customers are baking in a little more cautiously to start the year. Is that something you're hearing through the first month and change here, or is it just obviously, there's the typical network conservatism? Just wondering if that's something you're picking up in the market or more just, "Hey, we don't want to bake in any improvement just yet. Let's see how it plays out." So it would be helpful to just talk through that Q1 guide.
Patrick Donnelly: Hey guys. Thank you for taking the questions. Maybe on the Q1 commentary, Patrick, you talked about baking in that customers, in spite of some positive headlines to your point on pharma and lifestyle, customers are baking in a little more cautiously to start the year. Is that something you're hearing through the first month and change here, or is it just obviously, there's the typical network conservatism? Just wondering if that's something you're picking up in the market or more just, "Hey, we don't want to bake in any improvement just yet. Let's see how it plays out." So it would be helpful to just talk through that Q1 guide.
Speaker #3: Maybe on the one cue commentary, Patrick, you talked about, you know, baking in that customer's—in spite of some positive headlines, to your point on pharma and life sci customers, you're baking in a little more cautious to start the year.
Speaker #3: So we as we said, also through in our Q3 call and also at the JP Morgan conference, we think our customers and we feel that we'll start the year a bit more cautious and we have really built that into our guidance for Q1 and for the full year.
Speaker #3: Is that something you're hearing, you know, through the first month and change here or is it just obviously there's the typical Netflix conservatism? Just wondering if that's, you know, something you're picking up in the market or or more just, hey, we don't want to bake in any improvement just yet.
Speaker #2: Yeah. And hey, just to echo what Patrick said, you know, hey, we of course stepping back, we're of course very pleased with the fourth quarter came in better than what we expected.
Speaker #2: Some, you know, good broad-based growth throughout the portfolio. We can kind of dig into that maybe in a minute. And we're also very pleased with our full year guide carrying forward that be into the into 2026 full year maintaining the the organic local currency guide for 4% or not the for the full year on sales.
Speaker #3: Let's let's see how it plays out. So would would be helpful to just talk through that one cue guide.
Speaker #4: Yeah, hey, thanks Patrick. And I'll let Shawn come into this as well, but maybe to my comment on the headlines, again, headlines have been still pretty volatile while they have been better on the pharma and life sciences side.
Patrick Kaltenbach: Yeah. Hey, thanks, Patrick. And I'll let Shawn comment on this as well, but maybe to my comment on the headlines, again, headlines have been still pretty volatile while they have been better on the pharma and life sciences side. We all appreciate there's still more uncertainty in the market out there. And this also across the broader portfolio and the broader markets we serve still leads to longer deal cycles, etc. So as we said also in our Q3 call and also at the JPMorgan conference, we think of our customers and we feel that we'll start the year a bit more cautious and we have really built that into our guidance for Q1 and for the full year.
Patrick Kaltenbach: Yeah. Hey, thanks, Patrick. And I'll let Shawn comment on this as well, but maybe to my comment on the headlines, again, headlines have been still pretty volatile while they have been better on the pharma and life sciences side. We all appreciate there's still more uncertainty in the market out there. And this also across the broader portfolio and the broader markets we serve still leads to longer deal cycles, etc. So as we said also in our Q3 call and also at the JPMorgan conference, we think of our customers and we feel that we'll start the year a bit more cautious and we have really built that into our guidance for Q1 and for the full year.
Speaker #4: We all appreciate there's still more uncertainty in the market out there. And this, also across the broader portfolio and the broader markets we serve, still leads to longer deal cycles, etc.
Speaker #2: But like Patrick said, as we previously mentioned, we we do kind of tend to think that customers will likely start the year a little bit more cautious in Q1.
Speaker #4: So as we said in our Q3 call and also at the JP Morgan conference, we think our customers—and we feel as well—will start the year a bit more cautiously, and we have really built that into our guidance for Q1 and for the year.
Speaker #4: So we as we said, also to in our Q3 call and also at the JP Morgan conference, we think our customers and we feel that we'll start a year a bit more cautious and we have really built that into our guidance for Q1 and for the full year.
Speaker #2: It's always difficult to have visibility into Q1. You know, every time you're starting a year, it's a new year. You know, you you almost have to get through the whole quarter and get through March to really get a feeling for how things are feels like, you know, a prudent approach for us progressing.
Speaker #5: Yeah, and hey, just to echo what Patrick said, you know, hey, we of course stepping back, we're of course very pleased with the fourth quarter.
Shawn Vadala: Yeah. And hey, just to echo what Patrick said, hey, we're of course stepping back. We're of course very pleased with Q4. Came in better than what we expected. Some good broad-based growth throughout the portfolio. We can kind of dig into that maybe in a minute. And we're also very pleased with our full-year guide carrying forward that beat into the 2026 full year, maintaining the 4% non-organic local currency guide for the full year on sales. But like Patrick said, as we previously mentioned, we do kind of tend to think that customers will likely start the year a little bit more cautious in Q1. It's always difficult to have visibility into Q1. Every time you're starting a year, it's a new year. You almost have to get through the whole quarter and get through March to really get a feeling for how things are progressing.
Shawn Vadala: Yeah. And hey, just to echo what Patrick said, hey, we're of course stepping back. We're of course very pleased with Q4. Came in better than what we expected. Some good broad-based growth throughout the portfolio. We can kind of dig into that maybe in a minute. And we're also very pleased with our full-year guide carrying forward that beat into the 2026 full year, maintaining the 4% non-organic local currency guide for the full year on sales. But like Patrick said, as we previously mentioned, we do kind of tend to think that customers will likely start the year a little bit more cautious in Q1. It's always difficult to have visibility into Q1. Every time you're starting a year, it's a new year. You almost have to get through the whole quarter and get through March to really get a feeling for how things are progressing.
Speaker #2: to take. In terms of how we're looking at the first quarter and and as he But just sitting here today, it says, we we do expect things to kind of gradually get better throughout the
Speaker #5: You know, came in better than what we expected. Some, you know, good broad-based growth throughout the portfolio. We can kind of dig into that maybe in a minute.
Speaker #2: year. Okay.
Speaker #5: And we're also very pleased with our full year guide carrying forward that beat into the into 2026 full year maintaining the the 4% organ non-organic local currency guide for the for the full year on sales.
Speaker #4: That's helpful. And then Sean, maybe one for you just in terms of the components of the guide. You know, we'd love if you could break out how you're thinking about pricing versus volume both on the revenue side and then if you could give a bit of a margin build with pricing FX guys.
Speaker #5: But like Patrick said, as we previously mentioned, we do kind of tend to think that customers will likely start the year a little bit more cautious in Q1.
Speaker #4: would would be very helpful. Thank you
Speaker #2: Yeah. So
Speaker #2: hey, we we you know, we we continue to feel etc.
Speaker #2: really good about our pricing program. Of course, one of the things that I like about pricing the most is that it really highlights the value proposition in the company.
Speaker #5: It's always Q1, you know, every time you're starting a year, it's a new year. You know, you almost have to get through the whole quarter and get through March to really get a feeling for how things are progressing.
Speaker #2: You know, we we've been really investing a lot in innovation over the last few years. And you know, and when you create value, you can realize pricing.
Speaker #5: But just sitting here today, it feels like, you know, a prudent approach for us to take. In terms of how we're looking at the first quarter and and as he says, we we do expect things to kind of gradually get better throughout the year.
Speaker #5: But just sitting here today, it feels like, you know, a prudent approach for us to take. In terms of how we're looking at the first quarter and and as he says, we we do expect things to kind of gradually get better throughout the year.
Shawn Vadala: But just sitting here today, it feels like a prudent approach for us to take in terms of how we're looking at Q1. And as he says, we do expect things to kind of gradually get better throughout the year.
Shawn Vadala: But just sitting here today, it feels like a prudent approach for us to take in terms of how we're looking at Q1. And as he says, we do expect things to kind of gradually get better throughout the year.
Speaker #2: So if you kind of like look at our pricing, you know, we're going to start the year off a little bit stronger because of the benefit of mid-year pricing actions from last year.
Speaker #2: So I'm kind of would expect Q1 to be in the three and a half percent or so kind of of a range. And then for the full year, we're kind of maintaining that that two and a half percent for for the full year.
Speaker #3: Okay, that's helpful. And then, Shawn, maybe one for you—just in terms of the components of the guide. We'd love it if you could break out how you're thinking about pricing versus volume, both on the revenue side, and then if you could give a bit of a margin build with pricing, FX, etc.
Patrick Donnelly: Okay. That's helpful. And then Shawn, maybe one for you just in terms of the components of the guide. We'd love if you could break out how you're thinking about pricing versus volume, both on the revenue side and then if you could give a bit of a margin build with pricing, FX, etc., would be very helpful. Thank you, guys.
Patrick Donnelly: Okay. That's helpful. And then Shawn, maybe one for you just in terms of the components of the guide. We'd love if you could break out how you're thinking about pricing versus volume, both on the revenue side and then if you could give a bit of a margin build with pricing, FX, etc., would be very helpful. Thank you, guys.
Speaker #2: You know, from an from an acquisition perspective, you know, we would we would expect to benefit about 1% during the first half of the year from acquisitions, which would be about a half a point for the full year.
Speaker #3: That would be very helpful. Thank you, guys.
Speaker #5: Yeah, so, hey, we, you know, we continue to be really good about our pricing program. Of course, one of the things that I like about pricing the most is that it really highlights the value proposition and the company.
Shawn Vadala: Yeah. So hey, we continue to feel really good about our pricing program. Of course, one of the things that I like about pricing the most is that it really highlights the value proposition in the company. We've been really investing a lot in innovation over the last few years. And when you create value, you can realize pricing. So if you kind of look at our pricing, we're going to start the year off a little bit stronger because of the benefit of mid-year pricing actions from last year. So I'm kind of would expect Q1 to be in the 3.5% or so kind of of a range. And then for the full year, we're kind of maintaining that 2.5% for the full year.
Shawn Vadala: Yeah. So hey, we continue to feel really good about our pricing program. Of course, one of the things that I like about pricing the most is that it really highlights the value proposition in the company. We've been really investing a lot in innovation over the last few years. And when you create value, you can realize pricing. So if you kind of look at our pricing, we're going to start the year off a little bit stronger because of the benefit of mid-year pricing actions from last year. So I'm kind of would expect Q1 to be in the 3.5% or so kind of of a range. And then for the full year, we're kind of maintaining that 2.5% for the full year.
Speaker #2: And then that would kind of translate into organic volume for the full year of 1%, but it would be down by about one and a half percent for Q1.
Speaker #5: You know, we we've been really investing a lot in innovation over the last few years. And you know, and when you create value, you can you kind of like look at our pricing, you know, we're going to start the year off a little mid-year pricing actions from last year.
Speaker #2: And this kind of just gets back to that same comment about, you know, just being a little bit more cautious and frankly just not surprised if customers start the year a little bit more cautious with how they spend just given the volatility that we experience or they experienced last year and just some of the uncertainty in the market.
Speaker #5: So I'm kind of would expect Q1 to be in the three and a half percent or so kind of of a range. And then for the full year, we're kind of maintaining that that two and a half percent for for the full year.
Speaker #2: But hey, we also recognize headlines have been getting better and hopefully we'll start to see things that translate into business as we go through the year.
Speaker #5: You know, from an from an acquisition perspective, you know, we would we would expect to benefit about 1% during the first half of the year from acquisitions, which would be about a half a point of the full year.
Shawn Vadala: From an acquisition perspective, we would expect to benefit about 1% during the first half of the year from acquisitions, which would be about a half a point of the full year. And then that would kind of translate into organic volume for the full year of 1%, but it would be down by about 1.5% for Q1. And this kind of just gets back to that same comment about just being a little bit more cautious and frankly, just not surprised if customers start the year a little bit more cautious with how they spend, just given the volatility that we experienced, or they experienced, last year, and just some of the uncertainty in the market. But hey, we also recognize headlines have been getting better, and hopefully, we'll start to see things that translate into business as we go through the year.
Shawn Vadala: From an acquisition perspective, we would expect to benefit about 1% during the first half of the year from acquisitions, which would be about a half a point of the full year. And then that would kind of translate into organic volume for the full year of 1%, but it would be down by about 1.5% for Q1. And this kind of just gets back to that same comment about just being a little bit more cautious and frankly, just not surprised if customers start the year a little bit more cautious with how they spend, just given the volatility that we experienced, or they experienced, last year, and just some of the uncertainty in the market. But hey, we also recognize headlines have been getting better, and hopefully, we'll start to see things that translate into business as we go through the year.
Speaker #2: You know, in terms of margins, you know, you know, we there's a there's a few things, you know, in terms of affecting our margins.
Speaker #2: So, you know, maybe we'll start with operating margins. So on a reported basis, well, maybe maybe one comment first, like currency has a pretty significant effect on our margins.
Speaker #5: And then that would kind of translate into organic volume for the full year of 1%, but it would be down by about one and a half percent for Q1.
Speaker #2: half of the year. If you remember, we were talking about this last quarter, and it's not a It did in the second significant effect on like profit, but it is on sales.
Speaker #5: And this kind of just gets back to that same comment about, you know, just being a little bit more cautious and frankly just not surprised if customers start the year a little bit more cautious with how they spend, just given the volatility that we experience or they experienced last year and just some of the uncertainty in the market.
Speaker #2: And so just the math turn, you know, when you start, you know, calculating operating profit as a percentage of sales, of course, it's going to have an optically look like a headwind.
Speaker #2: So that headwind is about 100 basis points for the first quarter. And it's about 50 basis points for the full year of 2026. So excluding that, we would expect our operating margin to be up slightly in Q1.
Speaker #5: But hey, we also recognize headlines have been getting better and hopefully we'll start to see things that translate into business as we go through the year.
Speaker #5: You know, in terms of margins, you know, you know, we there's a there's a few things, you know, in terms of affecting our margins.
Shawn Vadala: In terms of margins, there's a few things in terms of affecting our margins. So maybe we'll start with operating margins. So on a reported basis, well, maybe one comment first. Currency has a pretty significant effect on our margins. It did in the second half of the year. If you remember, we were talking about this last quarter. And it's not a significant effect on profit, but it is on sales. And so just the math, when you start calculating operating profit as a percentage of sales, of course, it's going to optically look like a headwind. So that headwind is about 100 basis points for Q1, and it's about 50 basis points for the full year of 2026.
Shawn Vadala: In terms of margins, there's a few things in terms of affecting our margins. So maybe we'll start with operating margins. So on a reported basis, well, maybe one comment first. Currency has a pretty significant effect on our margins. It did in the second half of the year. If you remember, we were talking about this last quarter. And it's not a significant effect on profit, but it is on sales. And so just the math, when you start calculating operating profit as a percentage of sales, of course, it's going to optically look like a headwind. So that headwind is about 100 basis points for Q1, and it's about 50 basis points for the full year of 2026.
Speaker #2: And we would expect it to be up by about 60 to 70 basis points for the full year. But but then of course on a reported basis, it's going to be different.
Speaker #5: So, you know, maybe we'll start with operating margins. So on a reported basis, well, maybe a maybe one comment first, like currency has a pretty significant effect on our margins.
Speaker #2: You know, on a on a reported basis, Q1 will be down, you know, probably in the 100 basis point kind of range maybe 90 basis points.
Speaker #5: It did in the second half of the year. If you remember, we were talking about this last quarter. And it's not as significant an effect on like profit but it is on sales.
Speaker #2: And then for the full year, it would be up slightly.
Speaker #5: And so just the math turn, you know, when you start, you know, calculating operating profit as a percentage of sales, of course, it's going to have an optically look like a headwind.
Speaker #5: Vijay Kumar from Evercore Our next question comes from ISI. Please go
Speaker #5: ahead. Hey guys, congrats on a nice spring
Speaker #5: headwind is about 100 So that basis points for the first quarter. And it's about 50 basis points for the full year of 2026. So excluding that, we would expect our operating margin to be up slightly in Q1.
Speaker #2: question. Just back on this Q1 guidance, Sean and Patrick, you guys did a 4% organic in Q4. I think your Q1 is implying 2% organic What causes that 4 to 2% step markets when you say down?
Shawn Vadala: So excluding that, we would expect our operating margin to be up slightly in Q1, and we would expect it to be up by about 60 to 70 basis points for the full year. But then, of course, on a reported basis, it's going to be different. On a reported basis, Q1 will be down probably in the 100 basis point kind of range, maybe 90 basis points. And then for the full year, it would be up slightly.
Shawn Vadala: So excluding that, we would expect our operating margin to be up slightly in Q1, and we would expect it to be up by about 60 to 70 basis points for the full year. But then, of course, on a reported basis, it's going to be different. On a reported basis, Q1 will be down probably in the 100 basis point kind of range, maybe 90 basis points. And then for the full year, it would be up slightly.
Speaker #5: And we would to 70 basis points for the full year. But but then, of course, on a reported basis, it's going to be different.
Speaker #2: cautiousness? Can you can you walk And what do you assume for end us through on the different assumptions you're having industrial versus labs and pharma?
Speaker #5: You know, on a reported basis, Q1 will be down, you know, probably in the 100 basis point kind of range, maybe 90 basis points.
Speaker #3: Yeah. Yeah. Sure. So hey, maybe I'll I can walk through maybe Vijay kind of like the assumptions for Q1 full year, but also Q4.
Speaker #5: And then for the full year, it would be up slightly.
Speaker #6: Our next question comes from PJ Kumar from EVERCORE
Speaker #6: Our next question comes from PJ Kumar from Evercore. Hey guys, congrats on a nice spring and
Speaker #3: But but as you as I kind of do it, you'll see that, you know, you know, when we look at the beat, you know, there was a very good beat on the industrial side, especially process analytics.
Operator: Our next question comes from Vijay Kumar from Evercore ISI. Please go ahead.
Operator: Our next question comes from Vijay Kumar from Evercore ISI. Please go ahead.
Vijay Kumar: Hey guys. Congrats on the nice spring in that. Thank you for taking my question. Just back on this Q1 guidance, Shawn and Patrick, you guys did 4% organic in Q4. I think your Q1 is implying 2% organic. Correct me if I'm wrong. What causes that 4 to 2% step down, and what are you assuming for end markets? When you say cautiousness, can you walk us through the different assumptions you're having, industrial versus labs, and pharma?
Vijay Kumar: Hey guys. Congrats on the nice spring in that. Thank you for taking my question. Just back on this Q1 guidance, Shawn and Patrick, you guys did 4% organic in Q4. I think your Q1 is implying 2% organic. Correct me if I'm wrong. What causes that 4 to 2% step down, and what are you assuming for end markets? When you say cautiousness, can you walk us through the different assumptions you're having, industrial versus labs, and pharma?
Speaker #7: thank you for taking my question. Just back on this Q1 guidance, Shawn and Patrick, you guys did a 4% organic in Q4. I think your Q1 is implying 2% organic, correct me if I'm wrong.
Speaker #3: I mean, I'm sorry, not process analytics, product inspection. And then when you look at the geographies, you'll see Europe came in better than expected.
Speaker #3: Also to a certain degree in the Americas. And as we were kind of entering the quarter, we, you know, we were a little bit more concerned about Europe, but but our product inspection business in Europe did particularly well.
Speaker #7: What causes that 4 to 2% step down and what do you assume for end markets? When you say cautiousness, can you can you walk us through on the different assumptions you're having industrial versus
Speaker #3: And then when we go through it, you'll also see that, you know, kind of what steps down a little bit from Q4 to Q1 in just in terms of growth that, you know, you'll see a little bit on the industrial side.
Speaker #7: labs and pharma? Yeah,
Speaker #5: yeah, sure. So hey, maybe I'll I can walk through maybe VJ kind of like the assumptions for Q1 full year, but also Q4. But but as you as I kind of do it, you'll see that, you know, you know, when we look at the beat, you know, there was a very good beat on the industrial side, especially process analytics.
Shawn Vadala: Yeah. Yeah, sure. So hey, maybe I can walk through maybe Vijay kind of the assumptions for Q1 full year, but also Q4. But as I kind of do it, you'll see that when we look at the beat, there was a very good beat on the industrial side, especially process analytics. I mean, I'm sorry, not process analytics, product inspection. And then when you look at the geographies, you'll see Europe came in better than expected, also to a certain degree in the Americas. And as we were kind of entering the quarter, we were a little bit more concerned about Europe, but our product inspection business in Europe did particularly well. And then when we go through it, you'll also see that kind of what steps down a little bit from Q4 to Q1 just in terms of growth rates.
Shawn Vadala: Yeah. Yeah, sure. So hey, maybe I can walk through maybe Vijay kind of the assumptions for Q1 full year, but also Q4. But as I kind of do it, you'll see that when we look at the beat, there was a very good beat on the industrial side, especially process analytics. I mean, I'm sorry, not process analytics, product inspection. And then when you look at the geographies, you'll see Europe came in better than expected, also to a certain degree in the Americas. And as we were kind of entering the quarter, we were a little bit more concerned about Europe, but our product inspection business in Europe did particularly well. And then when we go through it, you'll also see that kind of what steps down a little bit from Q4 to Q1 just in terms of growth rates.
Speaker #3: You'll also see a little bit on the retail side. And then and also maybe this cautiousness in in in the Americas as well as to a certain degree in Europe.
Speaker #3: So in terms of the fourth quarter, I think this might be out there, but I'll just kind of go through it quickly. grew 3%.
Speaker #5: I mean, I'm sorry, not process analytics, product inspection. And then when you look at the geographies, you'll see Europe came in better than expected. to a certain degree in the Americas.
Speaker #5: I mean, I'm sorry, not process analytics, product inspection. And then when you look at the geographies, you'll see Europe came in better than expected.
Speaker #3: Our our our guide for Q1 is up low single digit. And our guide for the full year single digit. Core industrial grew 4%. And our guide for Q1 is flattish.
Speaker #5: And as we were kind of entering the Also quarter, we, you know, we were a little bit more concerned about Europe, but but our product inspection business in Europe did particularly well.
Speaker #5: And then when we go through it, you'll also see that, you know, kind of what steps down a little bit from Q4 to Q1 and just in terms of growth rates.
Speaker #3: And our guide for the full year is up low to mid single So Q4 lab digit. Product inspection grew 11% in Q4. Of course, that was 7% organic.
Speaker #5: You'll see that, you know, you'll see a little bit on the industrial side. You'll also see a little bit on the retail side. And then and also maybe this cautiousness in in in the Americas as well as to a certain degree in Europe.
Shawn Vadala: You'll see a little bit on the industrial side. You'll also see a little bit on the retail side. Then also maybe this cautiousness in the Americas as well as to a certain degree in Europe. So in terms of the fourth quarter, I think this might be out there, but I'll just kind of go through it quickly. So Q4, lab grew 3%. Our guide for Q1 is up low single digit. And our guide for the full year is growing low to mid-single digit. Core industrial grew 4%. And our guide for Q1 is flattish. And our guide for the full year is up low to mid-single digit. Product inspection grew 11% in Q4. Of course, that was 7% organic. And then the industrial, by the way, was 2% organic, core industrial.
Shawn Vadala: You'll see a little bit on the industrial side. You'll also see a little bit on the retail side. Then also maybe this cautiousness in the Americas as well as to a certain degree in Europe. So in terms of the fourth quarter, I think this might be out there, but I'll just kind of go through it quickly. So Q4, lab grew 3%. Our guide for Q1 is up low single digit. And our guide for the full year is growing low to mid-single digit. Core industrial grew 4%. And our guide for Q1 is flattish. And our guide for the full year is up low to mid-single digit. Product inspection grew 11% in Q4. Of course, that was 7% organic. And then the industrial, by the way, was 2% organic, core industrial.
Speaker #3: And then 2% organic. Core industrial. the industrial, by the way, was And then our Q1 guidance for product inspection is up mid to high single digit.
Speaker #3: And our full year guidance is up low to mid single digit. And then retail grew 19% in Q4. And our guidance for Q1 is up high single digit.
Speaker #5: So in terms of the fourth quarter, I think this might be out there, but I'll just kind of go through it quickly. So Q4, lab grew 3%.
Speaker #3: And then our guidance for the full year is flattish. And then if we kind of like look at the at the regions, Americas was up Q1, we're guiding up low single digit.
Speaker #5: Our our our guide for Q1 is up low single digit. And our guide for the full year is growing low to mid single digit.
Speaker #3: organic. And if you look at guiding for the full year And we're up mid single digit. And then Europe was up 4% in Q4.
Speaker #5: Core our guide for Q1 is flattish. And our guide for the full year is up low to mid single digit. Product inspection grew 11% in Q4.
Speaker #5: Of course, that was 7% organic. And then the industrial, by the way, was 2% organic. Core industrial. And then our Q1 guidance for product inspection is up mid to high single digit.
Speaker #3: Q1, we're guiding up And then for low single digit. And then for the full year also low single digit. And then China was up Q4.
Shawn Vadala: Our Q1 guidance for product inspection is up mid- to high-single-digit. Our full-year guidance is up low- to mid-single-digit. Retail grew 19% in Q4. Our guidance for Q1 is up high-single-digit. Our guidance for the full year is flattish. If we kind of look at the regions, Americas was up 7%, which was 4% organic. If you look at Q1, we're guiding up low-single-digit. We're guiding for the full year up mid-single-digit. Europe was up 4% in Q4. For Q1, we're guiding up low-single-digit. For the full year, also low-single-digit. China was up 3% in Q4. For Q1, we're guiding up low-single-digit. For the full year, up low-single-digit.
Shawn Vadala: Our Q1 guidance for product inspection is up mid- to high-single-digit. Our full-year guidance is up low- to mid-single-digit. Retail grew 19% in Q4. Our guidance for Q1 is up high-single-digit. Our guidance for the full year is flattish. If we kind of look at the regions, Americas was up 7%, which was 4% organic. If you look at Q1, we're guiding up low-single-digit. We're guiding for the full year up mid-single-digit. Europe was up 4% in Q4. For Q1, we're guiding up low-single-digit. For the full year, also low-single-digit. China was up 3% in Q4. For Q1, we're guiding up low-single-digit. For the full year, up low-single-digit.
Speaker #3: And then for Q1, we're guiding also up low single digit. And for the full year, up 3% in low single
Speaker #5: And our full year guidance is up low to mid single digit. And then retail grew 19% in Q4. And our guidance for Q1 is up high single digit.
Speaker #3: digit. Hey,
Speaker #2: that's very helpful, Sean. One on that, just on on on your EPS for these composition, I think my math looks like maybe half to be came from below the line, right, between intersections and higher pension income.
Speaker #5: And then our guidance for the full year is flattish. And then if we kind of like look at the at the regions, Americas was up 7%, which was 4% organic.
Speaker #5: And if you look at Q1, we're guiding up low single digits. And we're guiding for the full year up mid single digits. And then Europe was up 4% in Q4.
Speaker #2: What's the other I guess 30 cents or so raise coming from? Because it looks like top line didn't change.
Speaker #3: For the you're talking
Speaker #5: And then for Q1, we're guiding up low single digits. And then for the full year, also low single digits. And then China was up 3% in Q4.
Speaker #2: Yes.
Speaker #2: Yes. Vijay?
Speaker #3: Yeah. Yeah. No. No.
Speaker #3: clarify, we you know, so No. No. I think just to our our beat you know, the beat in Q4 was related to sales. I think some of the below OP stuff might be a little confusing, but we excluded that some of those benefits from our from our adjusted EPS, like so for example, the one-time tax benefit.
Speaker #5: And then for Q1, we're guiding also up low single digit. And for the full year, up low single digit.
Speaker #7: Hey, that's very helpful, Shawn. One on that, just on on on your EPS for these composition, I think my math looks like maybe half the beat came from below the line and higher pension income.
Vijay Kumar: That's very helpful, Shawn. One on just on your EPS base composition, I think my math looks like maybe half the beat came from below the line, right, between intersections and higher pension income. What's the other, I guess, $0.30 or so raise coming from? Because it looks like top line didn't change.
Vijay Kumar: That's very helpful, Shawn. One on just on your EPS base composition, I think my math looks like maybe half the beat came from below the line, right, between intersections and higher pension income. What's the other, I guess, $0.30 or so raise coming from? Because it looks like top line didn't change.
Speaker #3: When you look at our guidance, we we kind of carried 2026 EPS forward the beat, the EPS beat from 2025. We also increased our EPS for the benefit from Swiss tax rates.
Speaker #7: What's the other I guess 30 cents or so raise coming from? Because it looks like top line didn't change.
Speaker #3: So I mean, tariff rates. So you might remember the Swiss tariff rate decreased from 39% to 15%. That had a benefit of just under 1% of EPS.
Speaker #5: For the you're talking the full year 2026,
Shawn Vadala: You're talking the full year 2026, Vijay?
Shawn Vadala: You're talking the full year 2026, Vijay?
Speaker #5: VJ? Yeah, yeah.
Vijay Kumar: Yes. Yes.
Vijay Kumar: Yes. Yes.
Speaker #5: No, no, no, yes. no. I think just to clarify, we you know, so our our beat you know, the beat in Q4 was related to sales.
Shawn Vadala: Yeah, yeah. No, no, no, no. I think just to clarify, we so our beat the beat in Q4 was related to sales. I think some of the below OP stuff might be a little confusing, but we excluded some of those benefits from our adjusted EPS. So for example, the one-time tax benefit. When you look at our 2026 EPS guidance, we kind of carried forward the beat, the EPS beat from 2025. We also increased our EPS for the benefit from Swiss tax rates. So I mean, tariff rates. So you might remember the Swiss tariff rate decreased from 39% to 15%. That had a benefit of just under 1% of EPS. And then aside from that, there was a little bit of noise. We had foreign currency, which was a slight headwind. And we updated for that.
Shawn Vadala: Yeah, yeah. No, no, no, no. I think just to clarify, we so our beat the beat in Q4 was related to sales. I think some of the below OP stuff might be a little confusing, but we excluded some of those benefits from our adjusted EPS. So for example, the one-time tax benefit. When you look at our 2026 EPS guidance, we kind of carried forward the beat, the EPS beat from 2025. We also increased our EPS for the benefit from Swiss tax rates. So I mean, tariff rates. So you might remember the Swiss tariff rate decreased from 39% to 15%. That had a benefit of just under 1% of EPS. And then aside from that, there was a little bit of noise. We had foreign currency, which was a slight headwind. And we updated for that.
Speaker #3: And then you know, aside from that, there had foreign currency which was a little bit of noise. You know, we was a slight headwind.
Speaker #5: I think some of the below OP stuff might be a little confusing, but we excluded that some of those benefits. From our from our adjusted EPS, like so for example, the one-time tax benefit.
Speaker #3: little bit of noise with And we updated for that. And then we had a better pension income that's going to help out a little bit below OP.
Speaker #3: But that's also you know, that's based on like how you do your actuarial accounting at the end of the year. But there's also maybe an offset in some of the pension stuff above OP and just some basic fine-tuning at the end of the
Speaker #5: When you look at our 2026 EPS guidance, we we kind of carried forward the beat, the EPS beat from 2025. We also increased our EPS for the benefit from Swiss tax rate.
Speaker #3: year. But you know. Stepping back, Thank you, guys. you know, we're we're we're very pleased with raising EPS by 70 cents for the full year, which is about 2%, and maintaining our 8 to 9 percent EPS growth.
Speaker #5: So I mean, tariff rate. So you might remember the Swiss tariff rate decreased from 39% to 15%. That had a benefit of just under 1% of EPS.
Speaker #2: Excellent. Thanks, Sean.
Speaker #5: And then you know, aside from that, there was a little bit of noise. You know, we had foreign currency which was a slight headwind.
Speaker #3: Yep. Our next
Speaker #1: Dan Arias from Stifel. question comes from Please go ahead.
Speaker #5: And we updated for that. And then we had a little bit of noise with better pension income that's going to help out a little bit below OP.
Shawn Vadala: And then we had a little bit of noise with better pension income that's going to help out a little bit below OP. But that's also that's based on how you do your actuarial accounting at the end of the year. But there's also maybe an offset in some of the pension stuff above OP and just some basic fine-tuning at the end of the year. But stepping back, we're very pleased with raising EPS by $0.70 for the full year, which is about 2%, and maintaining our 8% to 9% EPS growth.
Shawn Vadala: And then we had a little bit of noise with better pension income that's going to help out a little bit below OP. But that's also that's based on how you do your actuarial accounting at the end of the year. But there's also maybe an offset in some of the pension stuff above OP and just some basic fine-tuning at the end of the year. But stepping back, we're very pleased with raising EPS by $0.70 for the full year, which is about 2%, and maintaining our 8% to 9% EPS growth.
Speaker #4: questions. Sean Food Retail was pretty strong Hey, good morning, guys. Thanks for the here. Something picking up, or is that just sort of the inherent lumpiness of that business?
Speaker #5: But that's also you know, that's based on like how you do your actuarial accounting at the end of the year. But there's also maybe an upset in some of the pension stuff above OP and just some basic fine-tuning at the end of the year.
Speaker #4: The outlook, I think, for for the year is flat. So I'm not sure if spending improvement makes that easier or if the Big Four Q just kind of creates a tougher comp, which makes that harder to reach.
Speaker #5: Hey, Dan, this is Patrick. Look, I mean, if retail, of course, we are very happy with the performance we have seen from retail in Q4 and also in 2025 as as it was growing.
Speaker #5: But
Speaker #5: you know. Stepping back, you know, we're we're we're very pleased with raising EPS by 70 cents for the full year, which is about 2%.
Speaker #7: Thank you, guys.
Speaker #5: But I also we want to remind you that that retail business is a pretty lumpy business. A lot of project business. And as we as we still guide the retail for Q1 for high single digit, I think fiscal year '26, we'll see a tough compare with that.
Speaker #5: And maintaining our 8 to 9% EPS
Speaker #5: growth. Helpful.
Speaker #7: Thanks, Shawn.
Vijay Kumar: That's helpful. Thanks, Shawn.
Vijay Kumar: That's helpful. Thanks, Shawn.
Speaker #5: Yep. Our next
Shawn Vadala: Yep.
Shawn Vadala: Yep.
Speaker #1: Question comes from Dan Arias from Stifel. Please go ahead.
Operator: Our next question comes from Dan Arias from Stifel. Please go ahead.
Operator: Our next question comes from Dan Arias from Stifel. Please go ahead.
Speaker #5: We also guided to the flattish growth in 2026. Again, it's a lot of ups and downs, big project business there. We compete really well.
Speaker #4: Hey, good morning, guys. Thanks for the questions. Shawn, food retail is pretty strong here. Is something picking up or is that just sort of the inherent lumpiness of that business, the outlook I think for for the year is flat.
Multiple Analysts: Hey, good morning, guys. Thanks for the questions. Shawn, food retail is pretty strong here. Is something picking up, or is that just sort of the inherent lumpiness of that business? The outlook, I think, for the year is flat. So I'm not sure if spending improvement makes that easier or if the big Q4 just kind of creates a tougher comp, which makes that harder to reach.
Dan Arias: Hey, good morning, guys. Thanks for the questions. Shawn, food retail is pretty strong here. Is something picking up, or is that just sort of the inherent lumpiness of that business? The outlook, I think, for the year is flat. So I'm not sure if spending improvement makes that easier or if the big Q4 just kind of creates a tougher comp, which makes that harder to reach.
Speaker #5: We actually spend quite some amount of innovation and brought out a lot of good products, new products, over the last two years. And then we compete extremely well.
Speaker #4: So, I'm not sure if spending improvement makes that easier, or if the Big Four Q just kind of creates a tougher comp, which makes that harder to—
Speaker #5: But again, it's it's more lumpy and it was as probably as we are after 2025 growth. We see the full fiscal year '26 given the top of compares rather flat.
Speaker #4: reach. Hey, Dan,
Patrick Kaltenbach: Hey, Dan. This is Patrick. Look, I mean, with retail, of course, we are very happy with the performance we have seen from retail in Q4 and also in 2025 as it was growing. But I also want to remind you that the retail business is a pretty lumpy business, a lot of project business. And as we still guide retail for Q1 for high single digit, I think fiscal year 2026 will see a tough compare under that. We also guided to flattish growth in 2026. Again, it's a lot of ups and downs, big project business there. We compete really well. We actually spend quite some amount of innovation and brought out a lot of good products, new products over the last two years. And then we compete extremely well. But again, it's more lumpy.
Patrick Kaltenbach: Hey, Dan. This is Patrick. Look, I mean, with retail, of course, we are very happy with the performance we have seen from retail in Q4 and also in 2025 as it was growing. But I also want to remind you that the retail business is a pretty lumpy business, a lot of project business. And as we still guide retail for Q1 for high single digit, I think fiscal year 2026 will see a tough compare under that. We also guided to flattish growth in 2026. Again, it's a lot of ups and downs, big project business there. We compete really well. We actually spend quite some amount of innovation and brought out a lot of good products, new products over the last two years. And then we compete extremely well. But again, it's more lumpy.
Speaker #3: retail, of course, we are very happy with the performance we this is Patrick. Look, I mean, the have seen from retail in Q4 and also in 2025 as we're going.
Speaker #4: mean, I know know one thing changes the growth picture for you guys, but how would you characterize the pharma copia opportunity over there that you talked about a little bit last quarter just in terms of what might be tangible when it comes to demand and then when you think that purchasing might ramp up if, in fact, it does?
Speaker #3: But I also we're want to remind you that that retail business is a pretty lumpy business. A lot of project business. And as we as we still guide the retail for Q1 for high single digit, I think fiscal year '26, we'll see a tough compare under that.
Speaker #3: We also guide it to the flattish growth in 2026. Again, it's a lot business there. We compete really well. We actually spend quite some amount of innovation and brought out a lot of good products, new products, over the last two years.
Speaker #5: Yeah. That's a good question, Dan. Look, I mean, in in China, again, we are really well positioned with our team there. We have an outstanding portfolio in pharmacopia as one of the some really good customer engagement also in Q3 and Q4 of last year.
Speaker #5: We have we have seen know, things like minimum wage requirements, et cetera. So I think it's a supporting our ongoing growth in China and the lab business in in 2026.
Speaker #3: And then we compete extremely well. But again, it's it's more lumpy. And it was as proud as we are after 2025 growth. We see the full fiscal year '26 given the top compares rather flat.
Speaker #5: We expect this to continue, but it's not like a a step change, right? This is continued upgrade of existing existing balances and customers of customers' labs as they want to comply with, you opportunities.
Patrick Kaltenbach: As powerful as we are after 2025 growth, we see the full fiscal year 2026, given the top of compares, rather flat.
Patrick Kaltenbach: As powerful as we are after 2025 growth, we see the full fiscal year 2026, given the top of compares, rather flat.
Speaker #4: Okay. And then maybe on China, I mean, I know no one thing changes the growth picture for you guys, but how would you characterize the pharma copia opportunity over there that you talked of what might be tangible when it comes to demand and then when you think that about a little bit last quarter just in terms purchasing might ramp up if, in fact, it does?
Multiple Analysts: Okay. And then maybe on China, I mean, I know no one thing changes the growth picture for you guys, but how would you characterize the pharma COPIA opportunity over there that you talked about a little bit last quarter just in terms of what might be tangible when it comes to demand, and then when you think that purchasing might ramp up if, in fact, it does?
Dan Arias: Okay. And then maybe on China, I mean, I know no one thing changes the growth picture for you guys, but how would you characterize the pharma COPIA opportunity over there that you talked about a little bit last quarter just in terms of what might be tangible when it comes to demand, and then when you think that purchasing might ramp up if, in fact, it does?
Speaker #5: But it's not a huge step change that comes all at
Speaker #5: once. Yeah.
Speaker #4: Makes sense. Okay. Thank you.
Speaker #1: Our next question comes from Michael Ryskin from Bank of America. Please go ahead.
Speaker #3: Yeah, that's a good question, Dan. Look, I mean, in in China, again, we are really well positioned with our team there. We have an outstanding portfolio in pharmacopia as one of the opportunities.
Patrick Kaltenbach: Yeah, that's a good question, Dan. Look, I mean, in China, again, we are really well positioned with our team there where we have an outstanding portfolio. And China Pharmacopoeia is one of the opportunities. We have seen some really good customer engagement also in Q3 and Q4 last year. We expect this to continue, but it's not like a step change, right? This is continued upgrade of existing balances and customers' labs as they want to comply with things like minimum wage requirements, etc. So I think it's supporting our ongoing growth in China and the lab business in 2026. But it's not a huge step change. That comes all at once.
Patrick Kaltenbach: Yeah, that's a good question, Dan. Look, I mean, in China, again, we are really well positioned with our team there where we have an outstanding portfolio. And China Pharmacopoeia is one of the opportunities. We have seen some really good customer engagement also in Q3 and Q4 last year. We expect this to continue, but it's not like a step change, right? This is continued upgrade of existing balances and customers' labs as they want to comply with things like minimum wage requirements, etc. So I think it's supporting our ongoing growth in China and the lab business in 2026. But it's not a huge step change. That comes all at once.
Speaker #6: Right. Thanks for taking the question. And congrats on the quarter and the guidance. First, I want to touch on you know, you've talked about the reshoring or onshoring capa opportunity a number of times in the past, and you flagged it again today.
Speaker #3: We have we have seen some really good customer engagement also in Q3 and Q4 of last year. We expect this to continue, but it's not like a a step change, right?
Speaker #6: Just curious, you know, if you could give us an update on that, any change in conversations or in tone? I know it's still really early, but just sort of what you sense around timing on when you might start seeing at least the beginning of the stories of the late '26 or still more of the '27, '28 dynamic.
Speaker #3: This is continued existing balances and customers of customers' labs as they want to comply with, you know, things like minimum wage requirements, et cetera.
Speaker #3: So I think it's supporting our ongoing growth in China and the lab business in in 2026. But it's not a huge step change that comes all at
Speaker #5: Yeah. Thanks, Mike. Look, I mean, yes, there's a lot of of good news and I would say out there, but think about our product portfolio.
Speaker #3: once. Yeah,
Speaker #4: makes sense. Okay. Thank
Speaker #5: I mean, a lot of percent of our portfolio is actually for significant part of our portfolio, over 50 manufacturing. Then you have another 25 or 20 to 25 percent.
Speaker #4: you. Our next question comes
Multiple Analysts: Yep. Makes sense. Okay. Thank you.
Dan Arias: Yep. Makes sense. Okay. Thank you.
Speaker #1: from Michael Reisgen from Bank of America. Please go
Operator: Our next question comes from Michael Ryskin from Bank of America. Please go ahead.
Operator: Our next question comes from Michael Ryskin from Bank of America. Please go ahead.
Speaker #5: So for QA, QC, so it's if you think specifically for pharma, I mean, these factories to still have to be built, about this reshoring, home shoring, right?
Speaker #1: ahead. Right.
Speaker #6: Thanks for taking the question, and congrats on the quote on the guide. First, I want to touch on—you talked about the reshoring or onshoring opportunity a number of times in the past.
Shawn Vadala: Great. Thanks for taking the question. Congrats on the quarter on the guide. First, I want to touch on you talked about the reshoring onshoring opportunity a number of times in the past, and you flagged it again today. Just curious if you could give us an update on that, any change in conversations or in tone. I know it's still really early, but just sort of what your sense is on timing on when you might start seeing at least the beginning of reshorings of late 2026 or still more of the 2027, 2028 dynamic.
Michael Ryskin: Great. Thanks for taking the question. Congrats on the quarter on the guide. First, I want to touch on you talked about the reshoring onshoring opportunity a number of times in the past, and you flagged it again today. Just curious if you could give us an update on that, any change in conversations or in tone. I know it's still really early, but just sort of what your sense is on timing on when you might start seeing at least the beginning of reshorings of late 2026 or still more of the 2027, 2028 dynamic.
Speaker #5: And then then then we come into play with our portfolio as they build it out. So we see this more as a 2027 and and beyond opportunity.
Speaker #6: And you cited it again today. Just curious, you know, if you could give us an update on that, any change in conversations or in tone?
Speaker #5: For us, of course, it's important that that we are out there in discussion with our existing customers, we help our existing customers a lot with our portfolio and make sure that they are well aware as they they they plan then of building out a potential additional facilities in the US.
Speaker #6: I know it's still really early, but just sort of what's your sense around timing on when you might start seeing at least the beginning of this quarter's late '26 or still more of a '27, '28
Speaker #6: dynamic? Yeah, thanks, Mike.
Speaker #3: Look, I mean, yes, there's a lot of of good news and I would say out there, but think about our product portfolio. I mean, a lot of significant part of our portfolio, over 50 percent of our portfolio is actually for manufacturing.
Speaker #5: To make sure that we are their preferred supplier for for for these opportunities. And it's it's pharma, but it's also other areas. If you think about, you know, the for example, the battery segment and others.
Patrick Kaltenbach: Yep. Thanks, Mike. Look, I mean, yes, there's a lot of good news, I would say, out there. But think about our product portfolio. I mean, a significant part of our portfolio, over 50% of our portfolio, is actually for manufacturing. Then you have another 20% to 25% or so for QAQC. So if you think about this reshoring, homeshoring, specifically for pharma, I mean, these factories still have to be built, right? And then they come into play with our portfolio as you build it out. So we see this more as a 2027 and beyond opportunity for us. So of course, it's important that we are out there in discussion with our existing customers.
Patrick Kaltenbach: Yep. Thanks, Mike. Look, I mean, yes, there's a lot of good news, I would say, out there. But think about our product portfolio. I mean, a significant part of our portfolio, over 50% of our portfolio, is actually for manufacturing. Then you have another 20% to 25% or so for QAQC. So if you think about this reshoring, homeshoring, specifically for pharma, I mean, these factories still have to be built, right? And then they come into play with our portfolio as you build it out. So we see this more as a 2027 and beyond opportunity for us. So of course, it's important that we are out there in discussion with our existing customers.
Speaker #5: So they're around the world. They're I would say in the coming years, a lot of good opportunities when it comes to reshoring where customers build redundant setups to make sure that they also de-risk their setup that they had in the past and I see this for the let's say coming years as a good opportunity.
Speaker #3: Then we have another 25 or 20 to 25 percent. So for Q8, we see so as if you think about this reshoring, homeshoring, specifically for pharma, I mean, these factories still have to be built, right?
Speaker #3: And then then then we come into play with our portfolio as they build it out. So we see this more as a 2027 and and beyond opportunity.
Speaker #5: But we have not factored it in as a big growth opportunity for 2026. I think we are still very early innings.
Speaker #3: For us, of course, it's important that that we are out there in discussion with our existing customers, we help our existing customers a lot with our aware as they they they plan then of building out a potential additional facilities in the US.
Speaker #4: Okay. All right. That's helpful. And then I want to touch a little bit on Europe. Feels that that's been doing a little bit better than expected.
Patrick Kaltenbach: We help our existing customers a lot with our portfolio and make sure that they are well aware as they plan then of building out potential additional facilities in the US to make sure that we are their preferred supplier for these opportunities. It's pharma, but it's also other areas if you think about, for example, the battery segment and others. So they're around the world. I would say in the coming years, a lot of good opportunities when it comes to reshoring where customers build redundant setups to make sure that they also de-risk the setup that they had in the past. I see this for the coming years as a good opportunity, but we have not factored it in as a big growth opportunity for 2026. I think it's still very early innings.
Patrick Kaltenbach: We help our existing customers a lot with our portfolio and make sure that they are well aware as they plan then of building out potential additional facilities in the US to make sure that we are their preferred supplier for these opportunities. It's pharma, but it's also other areas if you think about, for example, the battery segment and others. So they're around the world. I would say in the coming years, a lot of good opportunities when it comes to reshoring where customers build redundant setups to make sure that they also de-risk the setup that they had in the past. I see this for the coming years as a good opportunity, but we have not factored it in as a big growth opportunity for 2026. I think it's still very early innings.
Speaker #4: I think it stands out a little bit more for us the last couple of quarters despite tough comps. You just talk about, you know, what you see driving that on the ground there and, you know, how sustainable that is.
Speaker #3: To make sure that we are their preferred supplier for for for these opportunities. And it's it's pharma, but it's also other areas. If you think about, you know, the for example, the battery segment and others.
Speaker #4: Going forward. Thanks.
Speaker #3: Yeah. Hey, Mike. Mike, maybe I'll take that one. So as I kind of was alluding to before, you know, kind of coming into the quarter, we were a little bit more cautious on Europe.
Speaker #3: So, they're around the world. There are, I would say, in the coming years, a lot of good opportunities when it comes to reshoring, where customers build redundant setups to make sure that they also de-risk their setup that they had in the past.
Speaker #3: We've been extremely proud of our European organization over the years. If you just look at the the economy in Europe, it's, you know, it's the softer economy in the world, you know, in more recent times.
Speaker #3: And I see this for the coming years as a good opportunity. But we have not factored it in as a big growth opportunity for 2026.
Speaker #3: You know, PMI is kind of in the low 40s at at times, and we've continued to, I think, do extremely well. You know, with that kind of a backdrop, I think a lot of it we we benefit from, of course, a strong organization, but also you know, our spinnaker program really allowed, you know, with the combination of us going most direct in Europe, you know, I think allows us to to also be a little bit more precise in terms of the that ability to gain a little bit of market share each year.
Speaker #3: I think we are still in very early innings.
Speaker #4: Okay. All right. That's helpful. And then I want to touch a little bit on Europe. It feels that that's been doing a little bit better than expected.
Shawn Vadala: Okay. All right. That's helpful. And then I want to touch a little bit on Europe. It feels like that's been doing a little bit better than expected. I think it stands out a little bit more for us last couple of quarters despite tough comps. Just talk about what you see driving that on the ground there and how sustainable that is going forward. Thanks.
Michael Ryskin: Okay. All right. That's helpful. And then I want to touch a little bit on Europe. It feels like that's been doing a little bit better than expected. I think it stands out a little bit more for us last couple of quarters despite tough comps. Just talk about what you see driving that on the ground there and how sustainable that is going forward. Thanks.
Speaker #4: I think it stands out a little bit more for us the last couple of quarters, despite tough comps. Can you just talk about what you see driving that on the ground there, and how sustainable that is?
Speaker #4: Going forward. Thanks.
Speaker #3: If we just kind of, like, look at the fourth quarter, though, you know, one thing that I mentioned before that really stood out was our product inspection business.
Speaker #6: Yeah. Hey, Mike. Mike, maybe I'll take that one. So, as I kind of was alluding to before, you know, kind of coming into the quarter, we were a little bit more cautious on Europe.
Shawn Vadala: Yeah. Hey, Mike, maybe I'll take that one. So as I kind of was alluding to before, kind of coming into the quarter, we were a little bit more cautious on Europe. We've been extremely proud of our European organization over the years. If you just look at the economy in Europe, it's the softer economy in the world in more recent times. PMI is kind of in the low 40s at times. And we've continued to, I think, do extremely well with that kind of a backdrop. I think a lot of it, we benefit from, of course, a strong organization, but also our Spinnaker program really allowed with the combination of us going most direct in Europe, I think, allows us to also be a little bit more precise in terms of that ability to gain a little bit of market share each year.
Shawn Vadala: Yeah. Hey, Mike, maybe I'll take that one. So as I kind of was alluding to before, kind of coming into the quarter, we were a little bit more cautious on Europe. We've been extremely proud of our European organization over the years. If you just look at the economy in Europe, it's the softer economy in the world in more recent times. PMI is kind of in the low 40s at times. And we've continued to, I think, do extremely well with that kind of a backdrop. I think a lot of it, we benefit from, of course, a strong organization, but also our Spinnaker program really allowed with the combination of us going most direct in Europe, I think, allows us to also be a little bit more precise in terms of that ability to gain a little bit of market share each year.
Speaker #3: You know, we just had really strong growth in that business, and I think it's a a theme we've seen in other regions throughout the year, which is, you know, some of the innovation that we've introduced to the market and and, you know, received.
Speaker #6: We've been extremely proud of our European organization over the years. If you just look at the the economy in Europe, it, you know, is the softer economy in the world, you know, in more recent times.
Speaker #6: You know, PMI is kind of in the low 40s at times, and we've continued to, I think, do extremely well with that kind of a backdrop.
Speaker #3: And, you know, and a lot of that innovation is really trying to go more specifically at the mid mid-market segment and and we're doing quite well there.
Speaker #6: I think a lot of it we we benefit from, of course, a strong organization, but also our spinnaker program really allowed, you know, with the combination of us going most direct in Europe, you know, I think allows us to to also be a little bit more precise in terms of that ability to gain a little bit of market share each year.
Speaker #3: Otherwise, I'd say we're we're competing well in the other product categories in general, but, you know, with a I'd say a a more challenging backdrop than some of the other regions.
Speaker #6: If we just kind of, like, look at the fourth quarter, though, you know, one thing that I mentioned before that really stood out was our product inspection business.
Speaker #1: question comes from Catherine Our next Schulte from Beer. Please go
Shawn Vadala: If we just kind of look at the Q4, though, one thing that I mentioned before that really stood out was our product inspection business. We just had really strong growth in that business. I think it's a theme we've seen in other regions throughout the year, which is some of the innovation that we've introduced to the market recently has been just very well received. A lot of that innovation is really trying to go more specifically at the mid-market segment. We're doing quite well there. Otherwise, I'd say we're competing well in the other product categories in general, but with, I'd say, a more challenging backdrop than some of the other regions.
Shawn Vadala: If we just kind of look at the Q4, though, one thing that I mentioned before that really stood out was our product inspection business. We just had really strong growth in that business. I think it's a theme we've seen in other regions throughout the year, which is some of the innovation that we've introduced to the market recently has been just very well received. A lot of that innovation is really trying to go more specifically at the mid-market segment. We're doing quite well there. Otherwise, I'd say we're competing well in the other product categories in general, but with, I'd say, a more challenging backdrop than some of the other regions.
Speaker #1: ahead. Hey, guys.
Speaker #6: You know, we just had really strong growth in that business. And I think it's a a theme we've seen in other regions throughout the year, which is, you know, some of the innovation that we've introduced to the market and and, you know, recently has been just very well received.
Speaker #7: Thanks for the questions. Maybe just on service. I think you said up 8 percent in the quarter, 6 percent organic. You know, what's the outlook for that side of the business in '26, both including and excluding acquisitions?
Speaker #6: Yeah. Do you want me to take it? So yeah. So yeah, you're correct. Catherine, so we we grew 8 percent, like, looking at my notes to make sure I got it right.
Speaker #6: And, you know, a lot of that innovation is really trying to go more specifically at the mid-market segment, and we're doing quite well there.
Speaker #6: Otherwise, I'd say we're we're competing well in the other product categories in general. But, you know, with a, I'd say, a more challenging backdrop than some of the other regions.
Speaker #6: We grew 8 percent in the quarter, 6 percent organic as we kind of think of about next year. We're thinking about about mid to high single-digit growth overall for the business for the first quarter in the full you know, when you look at the the year.
Speaker #6: And and, first quarter, there's some acquisition growth in that. So Q1 would be more mid-single-digit. I think the full year probably still rounds to to mid to high single-digit.
Speaker #1: Our next question comes from Katherine Shootle from Baird. Please go ahead.
Operator: Our next question comes from Catherine Schulte from Baird. Please go ahead.
Operator: Our next question comes from Catherine Schulte from Baird. Please go ahead.
Speaker #1: ahead. Hey, guys.
Speaker #7: Thanks for the questions. Maybe just on Service. I think you said up 8 percent in the quarter, 6 percent organic. What's the outlook for that side of the business in '26, both including and excluding acquisitions?
Catherine Schulte: Hey, guys. Thanks for the questions. Maybe just on service, I think you said up 8% in the quarter, 6% organic. What's the outlook for that side of the business in 2026, both including and excluding acquisitions?
Catherine Schulte: Hey, guys. Thanks for the questions. Maybe just on service, I think you said up 8% in the quarter, 6% organic. What's the outlook for that side of the business in 2026, both including and excluding acquisitions?
Speaker #6: And, you know, as we've talked about in the past, we just continue to see service as a great opportunity. The team kind of recently celebrated the fact that they achieved $1 billion in sales for the first time and and it's that was a nice milestone.
Speaker #6: Yeah. Do you want me to take it? So yeah. So yeah, you're correct. Katherine, so we we grew 8 percent, like, looking at my notes to make sure I got it right.
Shawn Vadala: Yeah. Do you want me to take it? So yeah, so yeah, you're correct, Catherine. So we grew 8%. I'm just looking at my notes to make sure I got it right. We grew 8% in the quarter, 6% organic. As we kind of think about next year, we're thinking about mid- to high-single-digit growth overall for the business for the first quarter in the full year. And when you look at the first quarter, there's some acquisition growth in that. So Q1 would be more mid-single-digit. I think the full year probably still rounds to mid- to high-single-digit. And as we've talked about in the past, we just continue to see service as a great opportunity. The team kind of recently celebrated the fact that they achieved $1 billion in sales for the first time. And that was a nice milestone.
Shawn Vadala: Yeah. Do you want me to take it? So yeah, so yeah, you're correct, Catherine. So we grew 8%. I'm just looking at my notes to make sure I got it right. We grew 8% in the quarter, 6% organic. As we kind of think about next year, we're thinking about mid- to high-single-digit growth overall for the business for the first quarter in the full year. And when you look at the first quarter, there's some acquisition growth in that. So Q1 would be more mid-single-digit. I think the full year probably still rounds to mid- to high-single-digit. And as we've talked about in the past, we just continue to see service as a great opportunity. The team kind of recently celebrated the fact that they achieved $1 billion in sales for the first time. And that was a nice milestone.
Speaker #6: It's a business that we've been really focusing on in terms of trying to penetrate at the I think you're familiar, like, if you look at the serviceable eye base that we have available to us as an opportunity, it's about $3 billion.
Speaker #6: We grew 8 percent in the quarter, 6 percent organic as we kind of think of about next year. We're thinking about about mid to high single-digit growth overall for the business for the first quarter.
Speaker #6: So so we've we've penetrated about one-third, and we we continue to see opportunities to go after that. And and as we do that, we you know, we have been putting additional resources into that business, and we continue to be you know, optimistic kind of going forward for the medium to long term
Speaker #6: In the full year, and and, you know, when you look at the the first quarter, there's some acquisition growth in that. So Q1 would be more mid-single-digit.
Speaker #6: here. Okay.
Speaker #6: I think the full year probably still rounds to to mid to high single-digit. And, you know, as we've talked about in the past, we just continue to see services a great opportunity.
Speaker #7: Great. And then for China, another quarter of modest growth there in the fourth quarter. Sounds like maybe some easy comps and core industrial and lab about flat.
Speaker #6: The team kind of recently celebrated the fact that they achieved $1 billion in sales for the first time and and so that was a nice milestone.
Speaker #7: Can you just unpack a bit more what you're for lab versus industrial in the low seeing in that market and the outlook single guide for the year?
Speaker #6: It's a business that we've been really focusing on in terms of trying to penetrate I think you're familiar, like, if you look at the serviceable eye base that we have available to us as an opportunity, it's about $3 billion.
Shawn Vadala: It's a business that we've been really focusing on in terms of trying to penetrate. I think you're familiar. If you look at the serviceable eye base that we have available to us as an opportunity, it's about $3 billion. So we've penetrated about 1/3. And we continue to see opportunities to go after that. And as we do that, we have been putting additional resources into that business. And we continue to be optimistic kind of going forward for the medium to long term here.
Shawn Vadala: It's a business that we've been really focusing on in terms of trying to penetrate. I think you're familiar. If you look at the serviceable eye base that we have available to us as an opportunity, it's about $3 billion. So we've penetrated about 1/3. And we continue to see opportunities to go after that. And as we do that, we have been putting additional resources into that business. And we continue to be optimistic kind of going forward for the medium to long term here.
Speaker #6: Yeah. So yeah. So China overall came in as expected. You know, you know, we're we're pleased with that. You know, yeah, we recognize that industrial had an easier comparison, but, you know, we'll we'll still take it.
Speaker #6: So so we've we've penetrated about one-third, and we we continue to see opportunities to go after that. And and as we do that, we, you know, we have been putting additional resources into that business, and we continue to be optimistic kind of going forward for the medium to long term here.
Speaker #6: You know, they actually had quite strong growth in the quarter. You know, when we kind of came out of the budget tour last year, kind of we were in China in September, and, you know, one of the takeaways for me that there was a lot more positive energy coming out of our industrial was you could just feel the team.
Speaker #7: Okay. Great. And then for China, another quarter of modest growth there in the fourth quarter. Sounds like maybe some easy comps in core industrial and lab about flat.
Speaker #6: So it's really kind of cool to actually see it translating into results here. there at the moment. And and that's that's So so I think they're they're doing very well good in in the context of an economy that's still, you know, has some challenges.
Catherine Schulte: Okay. Great. And then for China, another quarter of modest growth there in the fourth quarter. Sounds like maybe some easy comps in core industrial and lab about flat. Can you just unpack a bit more what you're seeing in that market and the outlook for lab versus industrial in the low single guide for the year?
Catherine Schulte: Okay. Great. And then for China, another quarter of modest growth there in the fourth quarter. Sounds like maybe some easy comps in core industrial and lab about flat. Can you just unpack a bit more what you're seeing in that market and the outlook for lab versus industrial in the low single guide for the year?
Speaker #7: Can you just unpack a bit more what you're seeing in that market and the outlook for lab versus industrial in the low single guide for the
Speaker #6: And when you kind of cut through and look at the markets, you know, one of the markets that really is doing better there is the is the pharmaceutical end market.
Speaker #6: Yeah. So
Speaker #6: yeah. So China overall came in as year? expected. You know, you know, we're we're pleased with that. know, yeah, we recognize You that industrial had an easier comparison.
Shawn Vadala: Yeah. So yeah, so China overall came in as expected. We're pleased with that. Yeah, we recognize that industrial had an easier comparison, but we'll still take it. They actually had quite strong growth in the quarter. When we kind of came out of the budget tour last year, kind of we were in China in September. And one of the takeaways for me was you could just feel that there was a lot more positive energy coming out of our industrial team. So it's really kind of cool to actually see it translating into results here. So I think they're doing very well there at the moment. And that's good in the context of an economy that still has some challenges. And when you kind of cut through and look at the markets, one of the markets that really is doing better there is the pharmaceutical end market.
Shawn Vadala: Yeah. So yeah, so China overall came in as expected. We're pleased with that. Yeah, we recognize that industrial had an easier comparison, but we'll still take it. They actually had quite strong growth in the quarter. When we kind of came out of the budget tour last year, kind of we were in China in September. And one of the takeaways for me was you could just feel that there was a lot more positive energy coming out of our industrial team. So it's really kind of cool to actually see it translating into results here. So I think they're doing very well there at the moment. And that's good in the context of an economy that still has some challenges. And when you kind of cut through and look at the markets, one of the markets that really is doing better there is the pharmaceutical end market.
Speaker #6: You know, we see that in in both sides of the business. You know, maybe the one the one area that is more challenging is on the on the chemical side.
Speaker #6: And for specialty chem. But but the moment. But, you know, when we look forward to to to China for this year, we're still looking to guide in that low single-digit range for for Q1, for the full year.
Speaker #6: But, you know, we'll we'll still take it. You know, they actually had quite strong growth in the quarter. You know, when we kind of came out of the budget tour last year, kind of we were in China in in September, and, you know, one of the takeaways for me was you could just feel the that there was a lot more positive energy coming out of our industrial team.
Speaker #6: You know, right now, I'd probably think, you know, lab and industrial will probably both be in that kind of a range. You know, maybe some quarters better than others, depending on how things play out here a little bit.
Speaker #6: So it's really kind of cool to actually see it translating into results here. So so I think they're they're doing very well there at the moment.
Speaker #6: And and that's that's good in in the context of an economy that's still, you know, has some challenges. And when you kind of cut through and look at the markets, you know, one of the is the is the pharmaceutical end market.
Speaker #6: But but, you know, big picture, I think, you know, we've we've had at least a year of of of things have moderated there. We've had some modest hopefully to now grow on.
Speaker #6: markets that really is doing better there You know, we see that in in both sides of the business. You know, maybe the one the one area that is more challenging is on the on the chemical side.
Speaker #6: We're not building anything too significant to get over our skis. As we know, things in China can can change quickly in us, chemical means mostly either direction, but but hopefully we'll start to see things pick up at some point.
Shawn Vadala: We see that in both sides of the business. Maybe the one area that is more challenging is on the chemical side. And for us, chemical means mostly specialty chem, but that's a more challenging end market at the moment. But when we look forward to China for this year, we're still looking to guide in that low single digit range for Q1, for the full year. Right now, I'd probably think lab and industrial will probably both be in that kind of a range. Maybe some quarters better than others, depending on how things play out here a little bit. But big picture, I think we've had at least a year of things have moderated there. We've had some modest growth. I think it's a good base, hopefully, to now grow on. We're not building anything too significant to get over our skis.
Shawn Vadala: We see that in both sides of the business. Maybe the one area that is more challenging is on the chemical side. And for us, chemical means mostly specialty chem, but that's a more challenging end market at the moment. But when we look forward to China for this year, we're still looking to guide in that low single digit range for Q1, for the full year. Right now, I'd probably think lab and industrial will probably both be in that kind of a range. Maybe some quarters better than others, depending on how things play out here a little bit. But big picture, I think we've had at least a year of things have moderated there. We've had some modest growth. I think it's a good base, hopefully, to now grow on. We're not building anything too significant to get over our skis.
Speaker #6: In in for us, chemical means mostly specialty chem. But but that's a more more challenging end market at the moment. But, you know, when we look forward to to to China for this year, we're still looking to guide in that low single-digit range for for Q1, for the full year.
Speaker #6: And and I think longer term, we still feel very optimistic. I think, you know, when you look at, like, the five-year plan and you look at all the investments going into to to the pharmaceutical industry and life science industry in China, it's it's very encouraging.
Speaker #6: And then you look at some of these trends about GLP-1s and the number of companies in China that are investing in that, it's it's also a good opportunity just just as an example.
Speaker #6: think, you know, lab and industrial will You know, right now, I'd probably probably both be in that kind of a range. You know, maybe some quarters better than others, depending on how things play out here a little bit.
Speaker #6: So I think our team is well positioned for that. As you know, we have a really great China for China story, you know, with us making most of our products in China for China.
Speaker #6: But but, you know, big picture, I think, you know, we've we've had at least a year of of of things have moderated there. We've had some modest growth.
Speaker #6: And and selling mostly to Chinese private companies, I think that's just a a good setup for us. And we we've always performed well there relative to the market.
Speaker #6: You know, I think it's a good base hopefully to now grow on. We're not building anything too significant to get over our skis. As we know, things in China can can change quickly in either direction.
Shawn Vadala: As we know, things in China can change quickly in either direction. But hopefully, we'll start to see things pick up at some point. And I think longer term, we still feel very optimistic. I think when you look at the five-year plan and you look at all the investments going into the pharmaceutical industry and life science industry in China, it's very encouraging. And then you look at some of these trends about GLP-1s and the number of companies in China that are investing in that; it's also a good opportunity just as an example. So I think our team is well positioned for that. As you know, we have a really great China for China story with us making most of our products in China for China and selling mostly to Chinese private companies. I think that's just a good setup for us.
Shawn Vadala: As we know, things in China can change quickly in either direction. But hopefully, we'll start to see things pick up at some point. And I think longer term, we still feel very optimistic. I think when you look at the five-year plan and you look at all the investments going into the pharmaceutical industry and life science industry in China, it's very encouraging. And then you look at some of these trends about GLP-1s and the number of companies in China that are investing in that; it's also a good opportunity just as an example. So I think our team is well positioned for that. As you know, we have a really great China for China story with us making most of our products in China for China and selling mostly to Chinese private companies. I think that's just a good setup for us.
Speaker #7: Great. Thank you.
Speaker #6: But but hopefully we'll start to see things pick up at some point. And and I think longer term, we still feel very optimistic. I think, you know, when you look at, like, the five-year plan and you look at all the investments going into to to the pharmaceutical industry and life science industry in China, it's it's very encouraging.
Speaker #1: Our next question comes from Luke Sergo from Barclays. Please go
Speaker #1: ahead. Right.
Speaker #8: Thanks for the question, guys. I just wanted to kind of touch on some of the more of that pharma side and and also the the A&G weakness that you talked about.
Speaker #6: And then you look at some of these trends about GLP-1s and the number of companies in China that are investing in that, it's also a good opportunity, just as an example.
Speaker #8: And also, I I guess part of that in 4Q is the biotech weakness as well. So you know, we're we're starting to see some green shoots in biotech.
Speaker #6: So I think our team is well positioned for that. As you know, we have a really great China for China story, you know, with us making most of our products in China for China.
Speaker #8: You I know that it's probably going to track a know, pharma's doing a lot more M&A. And different cycle than, obviously, the clinical research.
Speaker #8: But, you know, how are you guys thinking about when that funding starts coming back? And, you know, where in that cycle would you guys start to see some of the pickup?
Speaker #6: And and selling mostly to Chinese private companies, I think that's just a a good setup for us. And we we've always performed well there relative to the
Shawn Vadala: We've always performed well there relative to the market.
Shawn Vadala: We've always performed well there relative to the market.
Speaker #6: market. Great.
Speaker #8: Or if this you're seeing weakness now is more just associated with kind of the academic funding environment?
Speaker #7: Thank
Speaker #7: you. Our next
Catherine Schulte: Great. Thank you.
Catherine Schulte: Great. Thank you.
Speaker #1: Question comes from Luke Sergo from Barclays. Please go ahead.
Speaker #6: Yeah. Maybe I take that, Luke.
Operator: Our next question comes from Luke Sergott from Barclays. Please go ahead.
Operator: Our next question comes from Luke Sergott from Barclays. Please go ahead.
Speaker #6: Luke, I think quite excited biotech or, like, the early-stage pharma where about the whole biopharma specifically, biopharma processing made a comment here on GLP-1 and others.
Speaker #8: Right. Thanks for the question, guys. I just wanted to kind of touch on some more of that pharma side and also the ANG weakness that you talked about.
Multiple Analysts: Great. Thanks for the question, guys. I just wanted to kind of touch on some of the more of that pharma side and also the ANG weakness that you talked about. And also, I guess, part of that in Q4 is a biotech weakness as well. So we're starting to see some green shoots in biotech. Firms are doing a lot more M&A. And I know that it's probably going to track a different cycle than, obviously, the clinical research. But how are you guys thinking about when that funding starts coming back? And where in that cycle would you guys start to see some of the pickup? Or if this biotech or the early-stage pharma where you're seeing weakness now is more just associated with kind of the academic funding environment?
Luke Sergott: Great. Thanks for the question, guys. I just wanted to kind of touch on some of the more of that pharma side and also the ANG weakness that you talked about. And also, I guess, part of that in Q4 is a biotech weakness as well. So we're starting to see some green shoots in biotech. Firms are doing a lot more M&A. And I know that it's probably going to track a different cycle than, obviously, the clinical research. But how are you guys thinking about when that funding starts coming back? And where in that cycle would you guys start to see some of the pickup? Or if this biotech or the early-stage pharma where you're seeing weakness now is more just associated with kind of the academic funding environment?
Speaker #6: And Sean made a driver for us as well. When you mentioned academia and government and biotech, that actually pretty small exposure in that area is mainly the area of liquid handling and, you know, the pipette business, et cetera.
Speaker #6: I think that that's actually where we see good momentum in the market. Almost around the world. So we have that's that's what I would say is a a growth activities that are going on.
Speaker #8: And also, I guess part of that in Q4 is the biotech weakness as well. So, you know, we're starting to see some green shoots in biotech.
Speaker #8: You know, pharma's doing a lot more M&A. And I know that it's probably going to track a different cycle than, But, you know, how are you guys thinking about when that funding starts coming back?
Speaker #6: Otherwise, we we are not really segment. And it's hard to say when when we really would would see a pickup there. Of prominent in that in that good funding that's should come back into the biotech and academia area.
Speaker #8: And, you know, where in that cycle would you guys start to see some of the pickup? Or if this biotech or, like, the early-stage pharma where you're seeing weakness now is more just associated with kind of the academic funding environment?
Speaker #6: Yeah, maybe I’ll take that, Luke. Luke, I think we're quite excited about the whole biopharma, specifically biopharma processing activities that are going on. And Shawn made a comment here on GLP-1 and others.
Speaker #6: Again, it we would first see that on on the pipette business. If that is picking up again and and right now, we saw that business in Q4 still a little bit under pressure.
Patrick Kaltenbach: Yeah. Maybe I'll take that, Luke. I think quite excited about the whole biopharma, specifically bioprocessing activities that are going on. And Shawn made a comment here on GLP-1 and others. I think that that's actually where we see good momentum in the market almost around the world. So that's what I would say is a growth driver for us as well. When you mentioned academia and government and biotech, they have actually pretty small exposure in that area, mainly in the area of liquid handling and pipette business, etc. Otherwise, we are not really prominent in that segment. And it's hard to say when we really would see a pickup there. Of course, it depends on some real good funding that should come back into the biotech and academia area. Again, we would first see that on the pipette business if that is picking up again.
Patrick Kaltenbach: Yeah. Maybe I'll take that, Luke. I think quite excited about the whole biopharma, specifically bioprocessing activities that are going on. And Shawn made a comment here on GLP-1 and others. I think that that's actually where we see good momentum in the market almost around the world. So that's what I would say is a growth driver for us as well. When you mentioned academia and government and biotech, they have actually pretty small exposure in that area, mainly in the area of liquid handling and pipette business, etc. Otherwise, we are not really prominent in that segment. And it's hard to say when we really would see a pickup there. Of course, it depends on some real good funding that should come back into the biotech and academia area. Again, we would first see that on the pipette business if that is picking up again.
Speaker #6: I think it was as low as slightly declining in in Q4. And we have to two agencies again. But when the funding is really coming back and when we see more more momentum.
Speaker #6: I think that that's actually where we see good momentum in the market. Almost around the world. So we have that's that's what I would say is a a growth driver for us as well.
Speaker #6: But that's I would be more on the on the pipette business. say that the indicator there for us would But as a reminder, it's a smaller part of our overall
Speaker #6: When you mentioned academia and government and biotech, that actually—pretty small exposure in that area is mainly in the area of liquid handling and, you know, pipette business, et cetera.
Speaker #6: business. Got you.
Speaker #8: And then one for Sean. On the GMs, and I understand this is a completely fluid tariff environment for you guys, but more generally, we've kind of seen this kind of tick down in gross margins across the space.
Speaker #6: Otherwise, we we are not really prominent in that in that segment. And it's hard to say when when we really would would see a pickup there.
Speaker #6: Of course, depends on on some real good funding that's should come back into the biotech and academia area. Again, it we would first see that on on the pipette business.
Speaker #8: And, you know, is there a dynamic going on with you guys where your tariff mitigation efforts outside of pricing, you know, those are ongoing, and then you're starting to get some pressure here from your suppliers?
Speaker #6: If that is picking up again and and right now, we saw that business in Q4 still a little bit under pressure. I think it was a slow a slightly declining in in Q4.
Speaker #8: And there's just going to be a mismatch between timing of when you can pass that on to your customers? Is that, you know, just trying to figure out where this kind of ultimately shakes out or for you guys just being forced right now to kind of eat it until things
Speaker #8: And there's just going to be a mismatch between timing of when you can pass that on to your customers? Is that, you know, just trying to figure out where this kind of ultimately shakes out or for you guys just being forced right now to kind of eat it until things normalize?
Patrick Kaltenbach: Right now, we saw that business in Q4 still a little bit under pressure. I think it was slightly declining in Q4. We have to wait and see again when the funding is really coming back, and when we see more momentum. But I think I would say that the indicator there for us would be more on the pipette business. As a reminder, it's a smaller part of our overall business.
Patrick Kaltenbach: Right now, we saw that business in Q4 still a little bit under pressure. I think it was slightly declining in Q4. We have to wait and see again when the funding is really coming back, and when we see more momentum. But I think I would say that the indicator there for us would be more on the pipette business. As a reminder, it's a smaller part of our overall business.
Speaker #6: And we have the two agencies again. But when the funding is really coming back, and when we see more and more momentum—but that's, I would say, that the indicator there for us would be more on the pipette business.
Speaker #6: No, actually, we're doing quite well in terms of managing the input costs. I think the stern drive program is really been helping us out.
Speaker #6: But as a reminder, it's a smaller part of our overall
Speaker #6: business. Got it.
Speaker #8: Yeah. And then one for Shawn. On the GMs—and I understand this is a completely fluid tariff environment for you guys—but more generally, we've kind of seen this tick down in gross margins across the space.
Speaker #6: You know, that program has a lot of sophistication, like a lot of our programs when it comes to, like, digital capabilities and our ability to, like, really look at what should something cost.
Multiple Analysts: Got you. And then one for Shawn on the GMs. And I understand it's a completely fluid tariff environment for you guys. But more generally, we've kind of seen this kind of tick down in gross margins across the space. And is there a dynamic going on with you guys where your tariff mitigation efforts outside of pricing, those are ongoing, and then you're starting to get some pressure here from your suppliers? And there's just going to be a mismatch between timing of when you can pass that on to your customers? Is it just trying to figure out where this kind of ultimately shakes out, or for you guys just being forced right now to kind of eat it until things normalize?
Luke Sergott: Got you. And then one for Shawn on the GMs. And I understand it's a completely fluid tariff environment for you guys. But more generally, we've kind of seen this kind of tick down in gross margins across the space. And is there a dynamic going on with you guys where your tariff mitigation efforts outside of pricing, those are ongoing, and then you're starting to get some pressure here from your suppliers? And there's just going to be a mismatch between timing of when you can pass that on to your customers? Is it just trying to figure out where this kind of ultimately shakes out, or for you guys just being forced right now to kind of eat it until things normalize?
Speaker #8: And, you know, is there a dynamic going on with you guys where your tariff mitigation efforts outside of pricing, you know, those are ongoing, and then you're starting to get some pressure here from your suppliers?
Speaker #6: So it's called should costing. And and we can look really diagnose opportunities that we can leverage as we as we look at our our cost structure.
Speaker #6: I I think what's making a you know, what was already a confusing year with tariffs more confusing is that currencies have changed, you know, quite a lot more here in the second half of the year.
Speaker #8: And there's just going to be a mismatch between timing of when you can pass that on to your customers? Is that, you know, just trying to figure out where this kind of ultimately shakes out or for you guys just being forced right now to kind of eat it until things normalize?
Speaker #6: And I was trying to explain that earlier in the call, but but I I wouldn't dismiss that, right? Like, it's like a 70 basis point headwind to gross margin in Q4.
Speaker #6: No, actually, we're doing quite well in terms of managing the input costs. I think the stern drive program has really been helping us out.
Speaker #6: And, you know, as I mentioned before, we're going to see that kind of carry forward to the to the first half of next year.
Shawn Vadala: No, actually, we're doing quite well in terms of managing the input costs. I think the SternDrive program has really been helping us out. That program has a lot of sophistication, like a lot of our programs when it comes to digital capabilities and our ability to really look at what should something cost. So it's called should cost. And we can really diagnose opportunities that we can leverage as we look at our cost structure. I think what's making what was already a confusing year with tariffs more confusing is that currencies have changed quite a lot more here in the second half of the year. And I was trying to explain that earlier in the call, but I wouldn't dismiss that, right? It's like a 70 basis point headwind to gross margin in Q4.
Shawn Vadala: No, actually, we're doing quite well in terms of managing the input costs. I think the SternDrive program has really been helping us out. That program has a lot of sophistication, like a lot of our programs when it comes to digital capabilities and our ability to really look at what should something cost. So it's called should cost. And we can really diagnose opportunities that we can leverage as we look at our cost structure. I think what's making what was already a confusing year with tariffs more confusing is that currencies have changed quite a lot more here in the second half of the year. And I was trying to explain that earlier in the call, but I wouldn't dismiss that, right? It's like a 70 basis point headwind to gross margin in Q4.
Speaker #6: And then some of these recent OP basis, they're fine. Just when you start to look at some mixed effects, we start to get a little bit of of unfavorable mix in terms of gross margins, kind of like the way you think about the service business, right?
Speaker #6: You know, that program has a lot of sophistication, like a lot of our programs when it comes to, like, digital capabilities and our ability to, like, really look at what should something cost.
Speaker #6: So it's called should costing. And and we can, like, really diagnose opportunities that we can leverage as we as we look at our our cost structure.
Speaker #6: It's like good when it comes to OP, but in terms of of of gross margin, it might be a little acquisitions, while on an bit dilutive.
Speaker #6: I I think what's making a, you know, what it was already a confusing year with tariffs more confusing is that currencies have changed, you know, quite a lot more here in the second half of the year.
Speaker #6: And that's because a lot of these recent acquisitions were distributors which were largely service businesses. And then any incremental product sales is going to be smaller just by the virtue of the fact that they were a a distribution partner.
Speaker #6: And I was trying to explain that earlier in the call, but I wouldn't dismiss that, right? Like, it's a 70 basis point headwind to gross margin in Q4.
Speaker #6: But when you kind of cut through all that, you know, like I was trying to say, I don't know if we got into this before or not, but, like, if you cut through FX and you cut through the the organic the the acquisition side, the organic gross margin was was down 20 basis points for the quarter and for the full year.
Speaker #6: And, you know, as I mentioned before, we're going to see that kind of carry forward to the first half of next year.
Shawn Vadala: And as I mentioned before, we're going to see that kind of carry forward to the first half of next year. And then some of these recent acquisitions, while on an OP basis, they're fine. Just when you start to look at some mix effects, we start to get a little bit of unfavorable mix in terms of gross margin. It's kind of like the way you think about the service business, right? It's good when it comes to OP, but in terms of gross margin, it might be a little bit dilutive. And that's because a lot of these recent acquisitions were distributors, which were largely service businesses. And then any incremental product sales is going to be smaller just by the virtue of the fact that they were a distribution partner.
Shawn Vadala: And as I mentioned before, we're going to see that kind of carry forward to the first half of next year. And then some of these recent acquisitions, while on an OP basis, they're fine. Just when you start to look at some mix effects, we start to get a little bit of unfavorable mix in terms of gross margin. It's kind of like the way you think about the service business, right? It's good when it comes to OP, but in terms of gross margin, it might be a little bit dilutive. And that's because a lot of these recent acquisitions were distributors, which were largely service businesses. And then any incremental product sales is going to be smaller just by the virtue of the fact that they were a distribution partner.
Speaker #6: And then some of these recent acquisitions, while on an OP basis, they're fine. Just when you start to look at some mix effects, we start to get a little bit of unfavorable mix in terms of gross margins, kind of like the way you think about the service business, right?
Speaker #6: And that's, you know, that's despite a very significant headwind, gross headwind on on tariffs, right? It was like the quarter. And if you think about it, you know, while we were mitigating things throughout the year, you know, we did have this topic of the Swiss tariffs that kicked in at 39 percent.
Speaker #6: It's like good when it comes to OP, but in terms of of of gross margin, it might be a little bit dilutive. And that's because a lot of these recent acquisitions were distributors, which were largely service businesses.
Speaker #6: we're going to have we're having to absorb that during And then we were, you know, we're 190 bips in the fourth quarter. So the step down to 15 percent tariff rate in in in Swiss tariffs, that's something that will that benefit will happen more in in 2026, not not in Q4.
Speaker #6: incremental product sales is going to be And then any smaller just by the virtue of the fact that they were a a distribution partner.
Speaker #6: But when you kind of cut through all that, you know, like I was trying to say, I don't know if we got into this before or not, but, like, if you cut through FX and you cut through the the organic the the acquisition side, the organic gross margin was was down 20 basis points for the quarter.
Speaker #6: And I think there's even maybe a little bit of bleeding into the first part of of Q1 just given stuff that was maybe in inventory already.
Shawn Vadala: But when you kind of cut through all that, like I was trying to say, I don't know if we got into this before or not, but if you cut through FX and you cut through the acquisition side, the organic gross margin was down 20 basis points for the quarter and for the full year. And that's despite a very significant gross headwind on tariffs, right? It was like 190 bps in the quarter. And if you think about it, while we were mitigating things throughout the year, we did have this topic of the Swiss tariffs that kicked in at 39%. And then we were going to have we were having to absorb that during the fourth quarter. So the step down to 15% tariff rate in Swiss tariffs, that's something that benefit will happen more in 2026, not in Q4.
Shawn Vadala: But when you kind of cut through all that, like I was trying to say, I don't know if we got into this before or not, but if you cut through FX and you cut through the acquisition side, the organic gross margin was down 20 basis points for the quarter and for the full year. And that's despite a very significant gross headwind on tariffs, right? It was like 190 bps in the quarter. And if you think about it, while we were mitigating things throughout the year, we did have this topic of the Swiss tariffs that kicked in at 39%. And then we were going to have we were having to absorb that during the fourth quarter. So the step down to 15% tariff rate in Swiss tariffs, that's something that benefit will happen more in 2026, not in Q4.
Speaker #6: So hope that helps a little bit.
Speaker #6: Yeah. Oh, that does.
Speaker #8: Thank you.
Speaker #6: Yep. Thanks.
Speaker #6: And for the full year. And that's you know, that's despite a very significant headwind, gross headwind on on tariffs, right? It was like 190 bips in the quarter.
Speaker #8: Our next question comes from Tycho Peterson from Jefferies. Please go ahead.
Speaker #6: And if you think about it, you know, while we were mitigating things throughout the year, you know, we did have this topic of the Swiss tariffs that kicked in at 39 percent.
Speaker #7: Hey, thanks. Wanted to dive in a little more on inspection. Sean, I appreciate your comments that, you know, some of this is new product intros and and opening up the mid-tier market.
Speaker #6: And then we were, you know, we we were going to have we're having to absorb that during the fourth quarter. So the step down to 15 percent tariff rate in in in Swiss tariffs, that's something that will that benefit will happen more in in 2026, not not in Q4.
Speaker #7: Is there any way to kind of delineate how much of this is kind of broader market, you know, recovery versus actually, you know, opening up new markets?
Speaker #7: And then I know in the past you've talked about replacement cycle here in particular, you know, the industrial portfolio well positioned. Is, you know, that that business benefiting at all from replacement cycle at this
Speaker #6: And I think there's even maybe a little bit of bleeding into the first part of Q1, just given stuff that was maybe in inventory already.
Shawn Vadala: I think there's even maybe a little bit of bleeding into the first part of Q1 just given stuff that was maybe in inventory already. Hope that helps a little bit. Yeah.
Shawn Vadala: I think there's even maybe a little bit of bleeding into the first part of Q1 just given stuff that was maybe in inventory already. Hope that helps a little bit. Yeah.
Speaker #6: I'll take
Speaker #6: that, Tycho. I point? think it the the growth you're seeing, you know, our product inspection business, we cannot point here to any underlying market recovery or market strength.
Speaker #6: So hope that helps a little
Speaker #6: bit. Yeah. Oh, that
Speaker #8: does. Thank you.
Speaker #6: Yep.
Speaker #6: Actually, we think the market is still under considerable pressure. The the food market, but we are really so I would say very well positioned with our portfolio and all the innovations we have pushed across the portfolio, whether it was in X-ray detection, in inject weighing, and there's more to come.
Multiple Analysts: Oh, it does. Thank you.
Luke Sergott: Oh, it does. Thank you.
Shawn Vadala: Yep. Thanks.
Shawn Vadala: Yep. Thanks.
Speaker #8: Our next question comes from Tycho Petersen from Jefferies. Please go
Speaker #8: Our next question comes from Tycho Petersen from Jefferies. Please go ahead. Hey, thanks.
Operator: Our next question comes from Tycho Peterson from Jefferies. Please go ahead.
Operator: Our next question comes from Tycho Peterson from Jefferies. Please go ahead.
Speaker #7: Wanted to dive in a little more on the industrial strength, you know, product inspection. Sean, I appreciate your comments that, you know, some of this is new product intros and and opening up the mid-tier market.
Tycho Peterson: Hey, thanks. Wanted to dive in a little more on the industrial strengths, product inspection. Shawn, I appreciate your comments that some of this is new product intros and opening up the mid-tier market. Is there any way to kind of delineate how much of this is kind of broader market recovery versus actually opening up new markets? And then I know in the past, you've talked about replacement cycle here, in particular, the industrial portfolio well positioned. Is that business benefiting at all from replacement cycle at this point?
Tycho Peterson: Hey, thanks. Wanted to dive in a little more on the industrial strengths, product inspection. Shawn, I appreciate your comments that some of this is new product intros and opening up the mid-tier market. Is there any way to kind of delineate how much of this is kind of broader market recovery versus actually opening up new markets? And then I know in the past, you've talked about replacement cycle here, in particular, the industrial portfolio well positioned. Is that business benefiting at all from replacement cycle at this point?
Speaker #6: Again, we we had a clear dedicated plan to not only dominate the high end, but also attack the mid-range market at strategies playing out really well.
Speaker #7: Is there any way to kind of delineate how much of this is kind of broader market, you know, recovery versus actually, you know, opening up new markets?
Speaker #6: So innovation our the the growth that you see there. And when it comes to the the the installed base and replacement market, what we are seeing yeah, I would say it's it's mostly across the board, across the portfolio, and that inspection businesses, yeah, we see a little bit of aging of is not only true for the product installed base.
Speaker #7: And then I know in the past you've talked about replacement cycle here, in particular, you know, the industrial portfolio well positioned. Is, you know, that that business benefiting at all from replacement cycle at this point?
Speaker #6: I'll I'll take that, Tycho. I think it the the growth you're seeing in our product inspection business, we cannot point here to any underlying market recovery or market strength.
Patrick Kaltenbach: I'll take that, Taiko. I think the growth you're seeing in our product inspection business; we cannot point here to any underlying market recovery or market strength. Actually, we think the market is still under considerable pressure, the food market, but we are really, I would say, very well positioned with our portfolio and all the innovations we have pushed across the portfolio, whether it was in X-ray detection and in check weighing. And there's more to come. Again, we have a clear dedicated plan to not only dominate the high-end, but also attack the mid-range market. That strategy is playing out really well. So yeah, I would say it's mostly innovation, the growth that you see there.
Patrick Kaltenbach: I'll take that, Taiko. I think the growth you're seeing in our product inspection business; we cannot point here to any underlying market recovery or market strength. Actually, we think the market is still under considerable pressure, the food market, but we are really, I would say, very well positioned with our portfolio and all the innovations we have pushed across the portfolio, whether it was in X-ray detection and in check weighing. And there's more to come. Again, we have a clear dedicated plan to not only dominate the high-end, but also attack the mid-range market. That strategy is playing out really well. So yeah, I would say it's mostly innovation, the growth that you see there.
Speaker #6: think the market is still under considerable Actually, we pressure. The the food market, but we are really I would say very well positioned with our portfolio and all the innovations we have pushed across the portfolio, whether it was in X-ray detection and in check weighing and the there's more to come.
Speaker #6: I think we have now seen probably two years of subdued replacement and what it needs really to for that to pick up is what I mentioned in the beginning, is more certainty in the market, more confidence of customers that they can invest I mean, they of course cannot hold off forever, but I think once the market gets a bit more stable and there's more certainty in in the market and less noise, we will see a gradual pickup again in the replacement business But it will not be again a step change; this also a bit more.
Speaker #6: Again, we we have a clear dedicated plan to not only dominate the high end, but also attack the mid-range market at strategies playing out really well.
Speaker #6: So yeah, I would say it's it's mostly innovation our the the growth that you see there. And when it comes to the the the installed base and replacement market, what we are seeing across the board, across the portfolio, and that is not only true for the product inspection businesses, yeah, we see a little bit of aging of installed base.
Speaker #6: to more normal levels and probably will be a gradual phasing in of then the the replacement business again.
Patrick Kaltenbach: And when it comes to the installed base and replacement market, what we are seeing across the board, across the portfolio, and that is not only true for the product inspection businesses, yeah, we see a little bit of aging of installed base. I think we have now seen probably 2 years of subdued replacement. And what it needs really for that to pick up is what I mentioned at the beginning, is more certainty in the market, more confidence of customers that they can invest. I mean, they, of course, cannot hold off forever, but I think once the market gets a bit more stable and there's more certainty in the market and less noise, we will see a gradual pickup again in the replacement business to more normal levels and probably also a bit more. But it will not be, again, a step change.
Patrick Kaltenbach: And when it comes to the installed base and replacement market, what we are seeing across the board, across the portfolio, and that is not only true for the product inspection businesses, yeah, we see a little bit of aging of installed base. I think we have now seen probably 2 years of subdued replacement. And what it needs really for that to pick up is what I mentioned at the beginning, is more certainty in the market, more confidence of customers that they can invest. I mean, they, of course, cannot hold off forever, but I think once the market gets a bit more stable and there's more certainty in the market and less noise, we will see a gradual pickup again in the replacement business to more normal levels and probably also a bit more. But it will not be, again, a step change.
Speaker #7: Okay. That's helpful. And then following up, you know, on the on the farmer, you know, onshoring, reshoring comments earlier, I appreciate that's more of a, you know, 27 and beyond story.
Speaker #7: Fair fair to assume lab will see that later, but maybe, you know, you'll see it on the industrial side earlier, weighing and dimensioning for transport, logistics, things things like
Speaker #6: I think we have now seen probably two years of subdued replacement and what it needs really to for that to pick up is what I mentioned in the beginning, is more certainty in the market, more confidence of customers that they can invest I mean, they of course cannot hold off forever, but I think once the market gets a bit more stable and there's more certainty in in the market and less noise, we will see a gradual pickup again in the replacement business to more normal levels and probably also a bit more.
Speaker #6: Yeah. Yeah. That's a that's a good way to think about it. As you know, for these onshoring and reshoring, of course, also we
Speaker #6: work with industrial partners with automation solution providers that are that use our equipment. And I think they that? prepare for the manufacturing. Solutions there, the automation lines and everything that is needed and also our own products for for for production and then lab including the QAQC products that we deliver for these markets will be probably a bit
Speaker #6: But it will not be again a step change; this will be a gradual phasing in of then the the replacement business
Patrick Kaltenbach: This will be a gradual phasing in of the replacement business again.
Patrick Kaltenbach: This will be a gradual phasing in of the replacement business again.
Speaker #6: again. Okay.
Speaker #7: That's helpful. And then, following up on the farmer, you know, onshoring, reshoring comments earlier, I appreciate that's more of a, you know, '27 and beyond story.
Speaker #6: later. Okay.
Tycho Peterson: Okay. That's helpful. And then following up on the pharma onshoring, reshoring comments earlier, I appreciate that's more of a 27 and beyond story. Fair to assume lab will see that later, but maybe you'll see it on the industrial side earlier, weighing and dimensioning for transport, logistics, things like that.
Tycho Peterson: Okay. That's helpful. And then following up on the pharma onshoring, reshoring comments earlier, I appreciate that's more of a 27 and beyond story. Fair to assume lab will see that later, but maybe you'll see it on the industrial side earlier, weighing and dimensioning for transport, logistics, things like that.
Speaker #7: And then maybe just one last one business. You know, maybe just touch on on bioprocess. I know it's a smaller part of the what you're seeing there.
Speaker #7: Fair fair to assume lab will see that later, but maybe, you know, you'll see it on the industrial side earlier, weighing and dimensioning for transport, logistics, things things like that.
Speaker #7: How does volumes look and what are you baking in this
Speaker #6: I'm sorry,
Speaker #6: Tycho. Can you repeat the question? year?
Speaker #7: Yeah. Just bioprocessing, you know, and and and consumable single-use. Can you just talk a little bit about, you know, volumes and and what you're baking in on on the bioprocessing side this year?
Speaker #6: Yeah, yeah. That's a good way to think about it. As you know, for these onshoring and reshoring efforts, of course, we also work with industrial partners, with automation solution providers, et cetera, that use our equipment.
Patrick Kaltenbach: Yeah. Yeah. That's a good way to think about it. As you know, for these onshoring and reshoring, of course, also we work with industrial partners, with automation solution providers, etc., that use our equipment. I think they will pick up for us. They prepare for the manufacturing solutions there, the automation lines, and everything that is needed, and also our own products for production. Then lab, including the QAQC products that we deliver for these markets, will be probably a bit later.
Patrick Kaltenbach: Yeah. Yeah. That's a good way to think about it. As you know, for these onshoring and reshoring, of course, also we work with industrial partners, with automation solution providers, etc., that use our equipment. I think they will pick up for us. They prepare for the manufacturing solutions there, the automation lines, and everything that is needed, and also our own products for production. Then lab, including the QAQC products that we deliver for these markets, will be probably a bit later.
Speaker #6: Yeah. Hey, so we didn't bake in specific guidance for it, but certainly on the bioprocessing side, we had a very strong fourth quarter especially when we, you know, geographically we look at the Americas, the US bioprocessing did especially well.
Speaker #6: And I think they will pick up force as they prepare for the manufacturing solutions there, the automation lines, and everything that is needed, and also our own products for production and then lab, including the QA/QC products that we deliver for these markets, will be probably a bit later.
Speaker #6: Single-use out of, you know, also did particularly particularly well on that market as well too. You know, I I we we kind of look at that as an business and, you know, certainly of carrying into into you know, in and through
Speaker #7: Okay, and then maybe just one last one on bioprocess. I know it's a smaller part of the business. Maybe just touch on what you're seeing there—how do volumes look, and what are you baking in this year?
Tycho Peterson: Okay. And then maybe just one last one on bioprocess. I know it's a smaller part of the business. Maybe just touch on what you're seeing there. How do volumes look? And what are you baking in this year?
Tycho Peterson: Okay. And then maybe just one last one on bioprocess. I know it's a smaller part of the business. Maybe just touch on what you're seeing there. How do volumes look? And what are you baking in this year?
Speaker #6: I'm sorry, Tycho. Can you repeat the question?
Speaker #6: 2026. Our
Shawn Vadala: I'm sorry, Tycho. Can you repeat the question?
Shawn Vadala: I'm sorry, Tycho. Can you repeat the question?
Speaker #7: Yeah. Just bioprocessing, you know, and and and consumable single-use. Can you just talk a little bit about, you know, volumes and and what you're baking in on on the bioprocessing side this year?
Tycho Peterson: Yeah. Just bioprocessing and consumable single-use. Can you just talk a little bit about volumes and what you're baking in on the bioprocessing side this year?
Tycho Peterson: Yeah. Just bioprocessing and consumable single-use. Can you just talk a little bit about volumes and what you're baking in on the bioprocessing side this year?
Speaker #8: from Doug Kenkel from next question comes Bull Research. Please go ahead.
Speaker #6: Yeah. Hey, so we didn't bake in specific guidance for it, but certainly on the bioprocessing side, we had a very strong fourth quarter especially when we, you know, geographically we look at the Americas, the US bioprocessing did especially well.
Shawn Vadala: Yeah. Hey, so we didn't bake in specific guidance for it, but certainly on the bioprocessing side, we had a very strong fourth quarter, especially when, geographically, we look at the Americas. The US bioprocessing did especially well. Single-use also did particularly well in that market as well, too. We kind of look at that as an above-average growth driver in the lab business and certainly feel good about the momentum they're kind of carrying into in and through 2026.
Shawn Vadala: Yeah. Hey, so we didn't bake in specific guidance for it, but certainly on the bioprocessing side, we had a very strong fourth quarter, especially when, geographically, we look at the Americas. The US bioprocessing did especially well. Single-use also did particularly well in that market as well, too. We kind of look at that as an above-average growth driver in the lab business and certainly feel good about the momentum they're kind of carrying into in and through 2026.
Speaker #2: guys. Thank you for taking the questions. Hey, So I guess another question on lab. I I think in Tycho's last bioprocessing. Component there. But, you know, again, Q4 results came in pretty well ahead of estimates.
Speaker #6: Single-use, out of, you know, also did particularly well in that market as well, too. You know, I, I, we, we kind of look at that as an above-average growth driver in the lab business and, you know, certainly feel good about the momentum there kind of carrying into, into, you know, in and through—
Speaker #2: You grew solid mid-single digits on a really tough comp. And you accelerated on a two-year stack basis. What what would you call out as driving the underlying improvement?
Speaker #2: You know, so not not just in process analytics and bioprocessing, but more broadly. What's driving underlying improvement? Did you see any signs of budget flush?
Speaker #6: 2026. Our next
Speaker #8: question comes from Doug Kenkel from Bull Research. Please go ahead.
Operator: Our next question comes from Doug Schenkel from Wolfe Research. Please go ahead.
Operator: Our next question comes from Doug Schenkel from Wolfe Research. Please go ahead.
Speaker #2: And then I'm just, you know, kind of underlying in there. Was there anything that you would call out in terms of just a change in trend and key end markets?
Speaker #2: Thank
Speaker #2: Hey, guys. Thank you for taking the questions. So I guess another question on lab. I I think in Tycho's last question, he he got at the bioprocessing component there.
Speaker #2: you. Yeah.
Doug Schenkel: Hey, guys. Thank you for taking the questions. So I guess another question on lab. I think in Tycho's last question, he got at the bioprocessing component there. But again, Q4 results came in pretty well ahead of estimates. You grew solid mid-single digits on a really tough comp, and you accelerated on a two-year stack basis. What would you call out as driving the underlying improvement? So not just in process analytics and bioprocessing, but more broadly, what's driving underlying improvement? Did you see any signs of budget flush? And then I'm just kind of lurking in there. Was there anything that you would call out in terms of just a change in trend in key end markets? Thank you.
Doug Schenkel: Hey, guys. Thank you for taking the questions. So I guess another question on lab. I think in Tycho's last question, he got at the bioprocessing component there. But again, Q4 results came in pretty well ahead of estimates. You grew solid mid-single digits on a really tough comp, and you accelerated on a two-year stack basis. What would you call out as driving the underlying improvement? So not just in process analytics and bioprocessing, but more broadly, what's driving underlying improvement? Did you see any signs of budget flush? And then I'm just kind of lurking in there. Was there anything that you would call out in terms of just a change in trend in key end markets? Thank you.
Speaker #6: I think, Doug, in terms of the farmer biopharma market overall, it's it's a lot of it is biopharma processing, which is more the process analytics piece.
Speaker #6: And then we to your question regarding the budget flush, yeah, we have seen, I would say, some budget flush is always hard for us to clearly assess how much is budget flush, but we have seen some better momentum towards the the very end of the the quarter, which points to the budget flush.
Speaker #2: But, you know, again, Q4 results came in pretty well ahead of estimates. You grew solid mid-single digits on a really tough comp, and you accelerated on a two-year stack basis.
Speaker #2: What what would you call out as driving the underlying improvement? You know, so not not just in process analytics and bioprocessing, but more broadly, what's driving underlying improvement?
Speaker #6: And also affecting the lab portfolio. So we saw some some flush coming there as well. I mean, if if you think about lab and and where we play and how we play, a lot of it is also linked to our strong software solution that we have there with with LabX, which really that was helps us to connect a broader portfolio of our products in either R&D labs or to also automate more workflows.
Speaker #2: Did you see any signs of budget flush? And then I'm just, you know, kind of underlying in there, was there anything that you would call out in terms of just a change in trend in key end markets?
Speaker #2: Thank
Speaker #2: you. Yeah.
Speaker #6: I think, Doug, in terms of the pharma/biopharma market overall, a lot of it is biopharma processing, which is more the process analytics piece.
Patrick Kaltenbach: Yeah. I think, Doug, in terms of the pharma, biopharma market overall, it's a lot of it is biopharma processing, which is more the process analytics piece. And then to your question regarding the budget flush, yeah, we have seen, I would say, some budget flush. It's always hard for us to clearly assess how much is budget flush, but we have seen some better momentum towards the very end of the quarter, which points to a budget flush. And that was also affecting the lab portfolios. So we saw some flush coming there as well. I mean, if you think about lab and where we play and how we play, a lot of it is also linked to our strong software solution that we have there with LabX, which really helps us to connect a broader portfolio of our products in either R&D labs or QAQC labs.
Patrick Kaltenbach: Yeah. I think, Doug, in terms of the pharma, biopharma market overall, it's a lot of it is biopharma processing, which is more the process analytics piece. And then to your question regarding the budget flush, yeah, we have seen, I would say, some budget flush. It's always hard for us to clearly assess how much is budget flush, but we have seen some better momentum towards the very end of the quarter, which points to a budget flush. And that was also affecting the lab portfolios. So we saw some flush coming there as well. I mean, if you think about lab and where we play and how we play, a lot of it is also linked to our strong software solution that we have there with LabX, which really helps us to connect a broader portfolio of our products in either R&D labs or QAQC labs.
Speaker #6: And see overall that helps us to compete very QAQC labs. It helps our customers I think that that's kind of the trend that we effectively and drives momentum also forward.
Speaker #6: And then, to your question regarding the budget flush—yeah, we have seen, I would say, some budget flush, and it's always hard for us to clearly assess how much is budget flush, but we have seen some better momentum towards the very end of the quarter, which points to a budget flush.
Speaker #6: That's that's something where where we have really a stronghold where we invest a lot to not only drive automation in the in the industrial piece, but also on of the the the things that also helps us to pick up more momentum in the
Speaker #6: on the lab side. And I think that that's probably one
Speaker #6: And that was also affecting the lab portfolio. So we saw some flush coming there as well. I mean, if you think about lab and where we play and how we play, a lot of it is also linked to our strong software solution that we have there with LabX, which really helps us to connect a broader portfolio of our products in either R&D labs or QA/QC labs.
Speaker #6: market. Our next question comes
Speaker #8: from Dan Leonard from UBS. Please go
Speaker #3: Thank you very much. Hi, Patrick. Hi, Sean. I want to revisit
Speaker #3: Patrick's comments you made on your emerging ahead. market view. You commented that you have an expectation for above-market sales growth from emerging markets. And I want to clarify does that comment include China or were you speaking to emerging markets outside of China?
Speaker #6: It helps our customers to also automate more workflows. And I think that that's kind of the trend that we see overall that helps us to compete very effectively and drives momentum also forward.
Patrick Kaltenbach: It helps our customers to also automate more workflows. I think that's kind of the trend that we see overall, that helps us to compete very effectively and drives momentum also forward. That's something where we have really a stronghold where we invest a lot to not only drive automation in the industrial piece, but also on the lab side. I think that's probably one of the things that also helps us to pick up more momentum in the market.
Patrick Kaltenbach: It helps our customers to also automate more workflows. I think that's kind of the trend that we see overall, that helps us to compete very effectively and drives momentum also forward. That's something where we have really a stronghold where we invest a lot to not only drive automation in the industrial piece, but also on the lab side. I think that's probably one of the things that also helps us to pick up more momentum in the market.
Speaker #6: That's that's something where where we have really a stronghold where we invest a lot to not only drive automation in the in the industrial piece, but also on on the lab side.
Speaker #6: Yeah. Very good question, Dan. And yeah, and thanks for for for that question. I think it's an important one. We really speak about outside of China.
Speaker #6: And I think that that's probably one of the the the things that also helps us to pick up more momentum in the
Speaker #6: So we we expect for the emerging markets, which we also said is in the meantime made a make about 18% of our like 15 or 16 percent of total revenues versus China is more above-average growth and our total revenues.
Speaker #6: market. Our next
Speaker #8: question comes from Dan Leonard from UBS. Please go ahead.
Speaker #6: But the above corporate growth the emerging markets,
Operator: Our next question comes from Dan Leonard from UBS. Please go ahead.
Operator: Our next question comes from Dan Leonard from UBS. Please go ahead.
Speaker #9: Thank you very much. Hi, Patrick. Hi, Shawn. I want to revisit Patrick's comments you made on your emerging market view. You commented that you have an expectation for above-market sales growth from emerging markets.
Multiple Analysts: Thank you very much. Hi, Patrick. Hi, Shawn. I want to revisit, Patrick, the comments you made on your emerging market view. You commented that you have an expectation for above-market sales growth from emerging markets. And I want to clarify, does that comment include China, or were you speaking to emerging markets outside of China?
Dan Leonard: Thank you very much. Hi, Patrick. Hi, Shawn. I want to revisit, Patrick, the comments you made on your emerging market view. You commented that you have an expectation for above-market sales growth from emerging markets. And I want to clarify, does that comment include China, or were you speaking to emerging markets outside of China?
Speaker #6: ex-China.
Speaker #3: Appreciate that clarification then. In
Speaker #3: the in then what is your updated view on growth in China over the medium term? Is that fleet accretive or fleet neutral?
Speaker #9: And I want to clarify, does that comment include China or were you speaking to emerging markets outside of China?
Speaker #6: So hey, we're not you know, we're not Yeah. necessarily formally updating guidance on on China. You know, I think we are very optimistic still about the medium to long term.
Speaker #6: Yeah. Very good question, Dan. And yeah, and thanks for for for that question. I think it's an important one. You really speak about outside of China.
Patrick Kaltenbach: Yeah. Very good question, Dan. And yeah, and thanks for that question. I think it's important. When you really speak about outside of China, so we expect for the emerging markets, which we also said in the meantime make about 18% of our total revenues versus China is more like 15% or 16% of total revenues. But above-average growth and above corporate growth rate is specifically pointing towards the emerging markets ex-China.
Patrick Kaltenbach: Yeah. Very good question, Dan. And yeah, and thanks for that question. I think it's important. When you really speak about outside of China, so we expect for the emerging markets, which we also said in the meantime make about 18% of our total revenues versus China is more like 15% or 16% of total revenues. But above-average growth and above corporate growth rate is specifically pointing towards the emerging markets ex-China.
Speaker #6: we clearly acknowledge that, you know, it doesn't need to grow at the rates that it grew, you know, in the pre-COVID We our our algorithm for single digits for China.
Speaker #6: So we expect for the emerging markets, which we also said in the meantime make up about 18 percent of our total revenues, versus China, which is more like 15 or 16 percent of our total revenues.
Speaker #6: But, you know, sitting here growth, we we were kind of looking at high today, we'd be very comfortable if it was mid-single digit with our ability to still hit our growth algorithm.
Speaker #6: But the above-average growth and above corporate growth rate is specifically pointing towards the emerging markets,
Speaker #6: ex-China. Appreciate that
Speaker #6: as one example, the the And and, you know, just emerging markets outside of China are now bigger than China and and we kind of see a lot of growth opportunity there.
Speaker #9: Clarification then. In the, in, then what is your updated view on growth in China over the medium term? Is that fleet accretive or fleet neutral?
Multiple Analysts: Appreciate that clarification, then. Then what is your updated view on growth in China over the medium term? Is that fleet accretive or fleet neutral?
Dan Leonard: Appreciate that clarification, then. Then what is your updated view on growth in China over the medium term? Is that fleet accretive or fleet neutral?
Speaker #6: But but there's also a lot of other things going on inside the company that we we feel good 6%-plus long-term sales about, so.
Speaker #6: Yeah. So hey, we're not you know, we're not necessarily formally updating guidance on on China. You know, I think we are very optimistic still about the medium to long term.
Shawn Vadala: Yeah. So hey, we're not necessarily formally updating guidance on China. I think we are very optimistic still about the medium to long term. We clearly acknowledge that it doesn't need to grow at the rates that it grew in the pre-COVID era. The last time we updated our algorithm for growth, we were kind of looking at high single digits for China. But sitting here today, we'd be very comfortable if it was mid-single digit with our ability to still hit our 6%+ long-term sales growth algorithm. And just as one example, the emerging markets outside of China are now bigger than China, and we kind of see a lot of growth opportunity there. But there's also a lot of other things going on inside the company that we feel good about, so.
Shawn Vadala: Yeah. So hey, we're not necessarily formally updating guidance on China. I think we are very optimistic still about the medium to long term. We clearly acknowledge that it doesn't need to grow at the rates that it grew in the pre-COVID era. The last time we updated our algorithm for growth, we were kind of looking at high single digits for China. But sitting here today, we'd be very comfortable if it was mid-single digit with our ability to still hit our 6%+ long-term sales growth algorithm. And just as one example, the emerging markets outside of China are now bigger than China, and we kind of see a lot of growth opportunity there. But there's also a lot of other things going on inside the company that we feel good about, so.
Speaker #8: Our next question comes from Jack Meehan from Nephron Research. Please go
Speaker #8: ahead. Thank you.
Speaker #6: We we clearly acknowledge that, you know, it doesn't need to grow at the rates that it grew, you know, in the pre-COVID era. The last time we updated our our algorithm for growth, we we were kind of looking at high single digits for China.
Speaker #3: Hi, everyone. I had a couple of questions on core is called out, you know, seeing industrial. The first some signs of life on the PMI side.
Speaker #6: But, you know, sitting here today would be very comfortable if it was mid-single digit with our ability to still hit our, you know, 6 percent-plus long-term sales growth algorithm.
Speaker #3: context, can you unpack the first quarter guide? I think you're assuming flat growth. Is there some timing dynamics going on or just piece those together for
Speaker #6: And, you know, just as one example, the emerging markets outside of China are now bigger than China, and we kind of see a lot of growth opportunity there.
Speaker #6: Yeah. So yeah, you're right. I mean, it's
Speaker #6: it's definitely a a little bit of a step down here from, you know, what we did in the me? second half of of 2020.
Speaker #6: But but there's also a lot of other things going on inside the company that we we feel good about,
Speaker #6: I think as we kind of look at it, it is a little out
Speaker #6: of all of our businesses. It's it has a I was just curious in that little bit more sensitivity to the economy. Some of the recent PMIs are nice to see the direction, you know, certainly there's a lag in terms of when we would see that in our business.
Speaker #8: Our next question comes from Jack Nguyen from NEFRON Research. Please go ahead.
Operator: Our next question comes from Jack Meehan from Nephron Research. Please go ahead.
Operator: Our next question comes from Jack Meehan from Nephron Research. Please go ahead.
Speaker #9: Thank you. Hi, everyone. I had a couple of questions on core industrial. The first is, as you called out, seeing some signs of life on the PMI side.
Speaker #6: You know, kind of as a reminder about 60% of core industrial is sold into a combination of of, you know, pharma biopharma, food manufacturing, and chemical.
Multiple Analysts: Thank you. Hi, everyone. I had a couple of questions on core industrial. The first is called out, seeing some signs of life on the PMI side. I was just curious in that context, can you unpack the Q1 guide? I think you're assuming flat growth. Is there some timing dynamics going on, or just piece those together for me?
Jack Meehan: Thank you. Hi, everyone. I had a couple of questions on core industrial. The first is called out, seeing some signs of life on the PMI side. I was just curious in that context, can you unpack the Q1 guide? I think you're assuming flat growth. Is there some timing dynamics going on, or just piece those together for me?
Speaker #9: I was just curious in that context, can you unpack the first quarter guide? I think you're assuming flat growth. Is there some timing dynamics going on or just piece those together for me?
Speaker #9: I was just curious in that context, can you unpack the first quarter guide? I think you're assuming flat growth. Is there some timing dynamics going on or just piece those together for me?
Speaker #6: And and out of those three sectors, you know, the chemical sector, you know, has been under more pressure this year, probably expected to continue to be under pressure in in Q1.
Speaker #6: And, you know, we're just assuming to be, you know, a little bit more start the year they're just going cautious with how they you know, release funds.
Speaker #6: Yeah. So yeah, you're right. I mean, it's it's definitely a a little bit of a step down here from what you know, what we did in the second half of of 2020.
Shawn Vadala: Yeah. So yeah, you're right. I mean, it's definitely a little bit of a step down here from what we did in the second half of 2025. I think as we kind of look at it, it is a little out of all of our businesses. It has a little bit more sensitivity to the economy. Some of the recent PMIs, nice to see the direction. Certainly, there's a lag in terms of when we would see that in our business. Kind of as a reminder, about 60% of core industrial is sold into a combination of pharma, biopharma, food manufacturing, and chemical. And out of those three sectors, the chemical sector has been under more pressure this year, probably expected to continue to be under pressure in Q1.
Shawn Vadala: Yeah. So yeah, you're right. I mean, it's definitely a little bit of a step down here from what we did in the second half of 2025. I think as we kind of look at it, it is a little out of all of our businesses. It has a little bit more sensitivity to the economy. Some of the recent PMIs, nice to see the direction. Certainly, there's a lag in terms of when we would see that in our business. Kind of as a reminder, about 60% of core industrial is sold into a combination of pharma, biopharma, food manufacturing, and chemical. And out of those three sectors, the chemical sector has been under more pressure this year, probably expected to continue to be under pressure in Q1.
Speaker #6: And, you know, we'll see how it plays out as you know. We only we only sit on, you know, one and a half months of as as the typical companies backlog typically at any point in time.
Speaker #6: I think as we kind of look at it, it is a little out of all of our businesses. It's it has a little bit more sensitivity to the economy.
Speaker #6: Some of the recent PMIs are nice to see the direction, you know, certainly there's a lag in terms of when we would see that in our business.
Speaker #6: So but that's just kind of how we're how we were thinking about it when we guided it, you know, last quarter for this year.
Speaker #6: You know, we've tried to, you know, try to communicate on that that we wouldn't be surprised if things start off a little bit slower this year and and certainly, that that's how we feel at, you know, sitting here today, so.
Speaker #6: You know, kind of as a reminder, about 60 percent of core industrial is sold into a combination of, you know, pharma, biopharma, food manufacturing, and chemical.
Speaker #6: And and out of those three sectors, you know, the chemical sector, you know, has been under more pressure this year, probably expected to continue to be under pressure in in Q1.
Speaker #3: Got it. Okay. And, you know, let's say there's a scenario where continue to see, you know, positive trends on the PMI front. Can you talk about just remind us, like, what the drop-through is?
Speaker #6: And, you know, we're just assuming as a typical company starts the year, they're just going to be, you know, a little bit more cautious with how they, you know, release funds.
Speaker #3: Like, if if we did see incremental organic growth, what the flow-through would be on the margin
Shawn Vadala: And we're just assuming as a typical company starts the year, they're just going to be a little bit more cautious with how they release funds. And we'll see how it plays out. As you know, we only sit on one and a half months of backlog typically at any point in time. But that's just kind of how we were thinking about it when we guided last quarter for this year. We've tried to communicate on that, that we wouldn't be surprised if things start off a little bit slower this year. And certainly, that's how we feel sitting here today, so.
Shawn Vadala: And we're just assuming as a typical company starts the year, they're just going to be a little bit more cautious with how they release funds. And we'll see how it plays out. As you know, we only sit on one and a half months of backlog typically at any point in time. But that's just kind of how we were thinking about it when we guided last quarter for this year. We've tried to communicate on that, that we wouldn't be surprised if things start off a little bit slower this year. And certainly, that's how we feel sitting here today, so.
Speaker #6: You know, I think I think on the core industrial side, it's going to be, you know, right around corporate average. You know, it depends, of course, what part of the portfolio you're in.
Speaker #6: And, you know, we'll see how it plays out, as you know. We only we only sit on, you know, one and a half months of backlog.
Speaker #6: Typically, at any point in time. So but that's just kind of how we're how we were thinking about it when we guided it, you know, last quarter for this year.
Speaker #6: into the part of the portfolio that's really But, like, if you're, you know, if you're servicing, you know, serving the the the opportunities regarding automation and digitalization, which is the faster-growing sector, you know, that's above corporate average.
Speaker #6: You know, we've tried to, you know, try to communicate on that that we wouldn't be surprised if things start off a little bit slower this year.
Speaker #6: And and certainly, that that's how we feel at, you know, sitting here today, so.
Speaker #6: But, you know, some of the the stuff that's a little bit more cyclical tends to be, you know, below corporate
Speaker #9: Got it. Okay. And, you know, let's say there's a scenario where we continue to see, you know, positive trends on the PMI front. Can you just remind us, like, what the drop-through is?
Multiple Analysts: Got it. Okay. Let's say there's a scenario where we continue to see positive trends on the PMI front. Can you talk about? Just remind us what the drop-through is. If we did see incremental organic growth, what the flow-through would be on the margin line?
Jack Meehan: Got it. Okay. Let's say there's a scenario where we continue to see positive trends on the PMI front. Can you talk about? Just remind us what the drop-through is. If we did see incremental organic growth, what the flow-through would be on the margin line?
Speaker #6: average. Our next
Speaker #8: question comes from Josh Waldman from Cleveland Research. Please go ahead.
Speaker #9: Like, if we did see incremental organic growth, what the flow-through would be on the margin.
Speaker #9: Hey, good morning. Thanks for fitting me in. One for Sean and then one for Patrick, I think. Sean, can you talk through how you're thinking about the organic growth progression through the latter three quarters of the year?
Speaker #9: line? You know, I think I
Speaker #6: I think on the core industrial side, it's going to be, you know, right around corporate average. You know, it depends, of course, what part of the portfolio you're in.
Shawn Vadala: I think on the core industrial side, it's going to be right around corporate average. It depends, of course, what part of the portfolio you're in. But if you're into the part of the portfolio that's really servicing the opportunities regarding automation and digitalization, which is the faster-growing sector, that's above corporate average. But some of the stuff that's a little bit more cyclical tends to be below corporate average.
Shawn Vadala: I think on the core industrial side, it's going to be right around corporate average. It depends, of course, what part of the portfolio you're in. But if you're into the part of the portfolio that's really servicing the opportunities regarding automation and digitalization, which is the faster-growing sector, that's above corporate average. But some of the stuff that's a little bit more cyclical tends to be below corporate average.
Speaker #9: I I guess are you factoring in a larger than normal ramp off of the the Q1 to get to the full year? And then on the embedded caution to start the year, I guess are are you seeing this in the order book when you consider normal kind of order seasonality for
Speaker #6: But, like, if you're, you know, if you're into the part of the portfolio that's really servicing, you know, serving the the the opportunities regarding automation and digitalization, which is the faster-growing sector, you know, that's above corporate average.
Speaker #9: January? Yeah.
Speaker #6: But, you know, some of the the stuff that's a little bit more cyclical tends to be you know, below corporate
Speaker #6: But, you know, some of the stuff that's a little bit more cyclical tends to be, you know, below corporate average. Our
Speaker #6: So hey, maybe I'll take the first part of the question. You know, first, so so I think if you look at our ramp-up, it's it's not like a significant ramp.
Speaker #6: You know, like, you know, yes, we're going to be down a little bit organic volume in in Q1 per our guidance. But if you like look at the second half of the year, you know, probably implies something in the 2% kind of a range in terms of organic growth.
Speaker #8: next question comes from Josh Waldman from Cleveland Research. Please go
Operator: Our next question comes from Josh Waldman from Cleveland Research. Please go ahead.
Operator: Our next question comes from Josh Waldman from Cleveland Research. Please go ahead.
Speaker #8: ahead. Hey, good morning.
Speaker #10: me in. Thanks for fitting One for Shawn and then one for Patrick, I think. Shawn, can you talk through how you're thinking about the organic growth progression through the latter three quarters of the year?
Josh Waldman: Hey, good morning. Thanks for fitting me in. One for Shawn, and then one for Patrick, I think. Shawn, can you talk through how you're thinking about the organic growth progression through the latter three quarters of the year? I guess, are you factoring in a larger than normal ramp off of the Q1 to get to the full year? And then on the embedded caution to start the year, I guess, are you seeing this in the order book when you consider normal kind of order seasonality for January?
Josh Waldman: Hey, good morning. Thanks for fitting me in. One for Shawn, and then one for Patrick, I think. Shawn, can you talk through how you're thinking about the organic growth progression through the latter three quarters of the year? I guess, are you factoring in a larger than normal ramp off of the Q1 to get to the full year? And then on the embedded caution to start the year, I guess, are you seeing this in the order book when you consider normal kind of order seasonality for January?
Speaker #6: Now, in the second half of the year, you know, we'll have a little bit less pricing and a little bit less acquisition benefit. So so that that number, you know, might not be as high as, you know, just simply adding the the the the increment of of organic volume.
Speaker #10: I I guess, are you factoring in a larger than normal ramp off of the the Q1 to get to the full year? And then on the embedded caution to start the year, I guess, are are you seeing this in the order book when you consider normal kind of order seasonality for January?
Speaker #6: But but that's kind of like how I would probably sit it see it sitting here today. But certainly wouldn't want to get into specific quarters.
Speaker #6: I I think, you know, every year is the same. And and this year is, you know, no different. And and probably even has a little bit less visibility as you start it just given all the volatility from last year.
Speaker #6: Yeah. So hey, maybe I'll take the first part of the question. You know, first, so so I think if you look at our ramp-up, it's it's not like a significant ramp.
Shawn Vadala: Yeah. So hey, maybe I'll take the first part of the question first. So I think if you look at our ramp-up, it's not a significant ramp. Yes, we're going to be down a little bit organic volume in Q1 per our guidance. But if you look at the second half of the year, it probably implies something in the 2% kind of a range in terms of organic growth. Now, in the second half of the year, we'll have a little bit less pricing and a little bit less acquisition benefit. So that number might not be as high as just simply adding the increment of organic volume. But that's kind of how I would probably see it sitting here today, but certainly wouldn't want to get into specific quarters.
Shawn Vadala: Yeah. So hey, maybe I'll take the first part of the question first. So I think if you look at our ramp-up, it's not a significant ramp. Yes, we're going to be down a little bit organic volume in Q1 per our guidance. But if you look at the second half of the year, it probably implies something in the 2% kind of a range in terms of organic growth. Now, in the second half of the year, we'll have a little bit less pricing and a little bit less acquisition benefit. So that number might not be as high as just simply adding the increment of organic volume. But that's kind of how I would probably see it sitting here today, but certainly wouldn't want to get into specific quarters.
Speaker #6: But but but we're going to learn a lot more here over the next couple of months. You know, and I think once we you know, once we get through the full quarter, we'll we'll have a much better perspective on what Q2 looks like and what the rest of the year looks like.
Speaker #6: You know, like, you know, yes, we're going to be down a little bit organic volume in in Q1 per our guidance. But if you like, look at the second half of the year, you know, probably implies something in the 2 percent kind of a range in terms of organic growth.
Speaker #6: And then in in terms of orders like, hey, it's, you know, I we never comment on months in in particularly, you know, it's just, you know, in Q1, I mean, January is always a goofy month, right?
Speaker #6: Now, in the second half of the year, you know, we'll have a little bit less pricing and a little bit less acquisition benefit. So so that that number, you know, might not be as high as, you know, just simply adding the the the the increment of of organic volume.
Speaker #6: You know, February is a goofy month. You have Chinese New Year timings. Seasonality-wise, these are are lower months in the year. So so we'll see.
Speaker #6: You know, and like I said before, you know, we only sit on about one and a half months' worth of of of backlog. So we'll see how it plays out.
Speaker #6: But but that's kind of like how I would probably sit it see it sitting here today. But certainly wouldn't want to get into specific quarters.
Speaker #6: And, you know, we're executing well. We we feel really good about how we're positioned. We have, I think, a really good balance of, you know, looking at growth opportunities and and also keeping an eye on, you know, productivity topics and and and we'll continue to have that balance going forward.
Speaker #6: I think, you know, every year is the same. And this year is, you know, no different, and probably even has a little bit less visibility, as you stated, just given all the volatility from last year.
Shawn Vadala: I think every year is the same, and this year is no different and probably even has a little bit less visibility as you started, just given all the volatility from last year. But we're going to learn a lot more here over the next couple of months. And I think once we get through the full quarter, we'll have a much better perspective on what Q2 looks like and what the rest of the year looks like. And then in terms of orders, like, hey, we never comment on months in particular just in Q1. I mean, January is always a goofy month, right? February is a goofy month. You have Chinese New Year timings. Seasonality-wise, these are lower months in the year. So we'll see. And like I said before, we only sit on about one and a half months' worth of backlog.
Shawn Vadala: I think every year is the same, and this year is no different and probably even has a little bit less visibility as you started, just given all the volatility from last year. But we're going to learn a lot more here over the next couple of months. And I think once we get through the full quarter, we'll have a much better perspective on what Q2 looks like and what the rest of the year looks like. And then in terms of orders, like, hey, we never comment on months in particular just in Q1. I mean, January is always a goofy month, right? February is a goofy month. You have Chinese New Year timings. Seasonality-wise, these are lower months in the year. So we'll see. And like I said before, we only sit on about one and a half months' worth of backlog.
Speaker #6: But, but, but we're going to learn a lot more here over the next couple of months. You know, and I think once we, you know, once we get through the full quarter, we'll have a much better perspective on what Q2 looks like and what the rest of the year looks like.
Speaker #9: Got it. Okay. And then Patrick, on service, I I think you said the group reached a billion in sales. Can you remind us how that's dispersed across the lab and industrial segments?
Speaker #6: And then in in terms of orders, like, hey, it's you know, I we never comment on months and in particularly, you know, it just you know, in Q1, I mean, January is always a goofy month, right?
Speaker #9: And then in the past, I think you've talked about service as a an area of strategic investment. And I wondered if you could talk through what what you see as the near-term opportunities in service to to drive incremental share growth on the hardware side.
Speaker #6: You know, February is a goofy month. You have Chinese New Year timings. Seasonality-wise, these are are lower months in the year. So so we'll see.
Speaker #6: only sit on about one and a half months' worth You know, and like I said before, you know, we of of of backlog. So we'll see how it plays out.
Speaker #2: Yeah. Very good. Thanks, Josh. Yeah, look, I'm very excited about services and also the the growth rates we have seen over the last few ew years.
Speaker #6: And, you know, we're executing well. We we feel really good about how we're positioned. We have a I think a really good balance of, you know, looking at growth opportunities and and also keeping an eye on, you know, productivity topics and and and we'll continue to have that balance going forward.
Shawn Vadala: So we'll see how it plays out. We're executing well. We feel really good about how we're positioned. We have, I think, a really good balance of looking at growth opportunities and also keeping an eye on productivity topics. We'll continue to have that balance going forward.
Shawn Vadala: So we'll see how it plays out. We're executing well. We feel really good about how we're positioned. We have, I think, a really good balance of looking at growth opportunities and also keeping an eye on productivity topics. We'll continue to have that balance going forward.
Speaker #2: We made a really conscious decision to overinvest in services as well and and drive that opportunity as Sean said. We currently cover about one-third of the install base.
Speaker #2: There's there's ample of opportunity for us to continue to cover more of that with strategic programs. We're making good progress. When when you think about the breakdown between industrial and and lab, for example, it's almost a longer revenue line because in industrial, you would have to differentiate between, for example, PI where you have a stronger service business versus core industrial that's a bit less.
Speaker #10: Got it. Okay. And then, Patrick, on service, I think you said the group reached a billion in sales. Can you remind us how that's dispersed across lab and industrial segments?
Josh Waldman: Got it. Okay. And then, Patrick, on service, I think you said the group reached $1 billion in sales. Can you remind us how that's dispersed across lab and industrial segments? And then in the past, I think you've talked about service as an area of strategic investment. And I wondered if you see as the near-term opportunities in service to drive incremental share growth on the hardware side.
Josh Waldman: Got it. Okay. And then, Patrick, on service, I think you said the group reached $1 billion in sales. Can you remind us how that's dispersed across lab and industrial segments? And then in the past, I think you've talked about service as an area of strategic investment. And I wondered if you see as the near-term opportunities in service to drive incremental share growth on the hardware side.
Speaker #10: And then in the past, I think you've talked about service as a an area of strategic investment. And I wondered if you could talk through what what you see as the near-term opportunities in service to to drive incremental share growth on the hardware side.
Speaker #2: And but I think it almost balances it out across the portfolio. In terms of the contribution and and comparison to the to the product business.
Speaker #4: Yeah. Very good. Thanks, Josh. Yeah. Look, I'm very excited about services. we have seen over the last years, we made a really conscious decision to overinvest in services as well and and drive that opportunity.
Speaker #2: But we have we are very excited about where we stand. It's a great strategic program for us as a company. And we are, of course, super proud that the team achieved this major milestone of $1 billion revenues in services.
Patrick Kaltenbach: Yeah. Very good. Thanks, Josh. Yeah, look, I'm very excited about services and also the growth rates we have seen over the last years. We made a really conscious decision to over-invest in service as well and drive that opportunity. As Shawn said, we currently cover about 1/3 of the install base. There's an ample of opportunity for us to continue to cover more of that with strategic programs. We're making good progress. When you think about the breakdown between industrial and lab, for example, it's almost a longer revenue line because in industrial, you would have to differentiate between, for example, PI, where do you have a stronger service business versus core industrial that's a bit less. But I think it almost balances it out across the portfolio in terms of the contribution and comparison to the product business. But we're very excited about where we stand.
Patrick Kaltenbach: Yeah. Very good. Thanks, Josh. Yeah, look, I'm very excited about services and also the growth rates we have seen over the last years. We made a really conscious decision to over-invest in service as well and drive that opportunity. As Shawn said, we currently cover about 1/3 of the install base. There's an ample of opportunity for us to continue to cover more of that with strategic programs. We're making good progress. When you think about the breakdown between industrial and lab, for example, it's almost a longer revenue line because in industrial, you would have to differentiate between, for example, PI, where do you have a stronger service business versus core industrial that's a bit less. But I think it almost balances it out across the portfolio in terms of the contribution and comparison to the product business. But we're very excited about where we stand.
Speaker #4: As Shawn said, we currently cover about one-third of the install base. There's ample opportunity for us to continue to cover more of that with strategic programs, and we're making good progress.
Speaker #9: Great. Thank you.
Speaker #8: That concludes the question-and-answer session. I would now like to turn the call back over to Adam Ullman for closing remarks.
Speaker #4: When you think about the breakdown between industrial and lab, for example, it's almost along the revenue line, because in industrial you would have to differentiate between, for example, PI, where you have a stronger service business, versus core industrial that's a little bit less.
Speaker #10: Hey, thanks, everybody, for joining us today and for your excellent questions. Please feel free to reach out if you have any follow-ups. And have a great weekend.
Speaker #10: Take care. Bye.
Speaker #4: But I think it almost balances it out across the portfolio, in terms of the contribution and comparison to the product business.
Speaker #4: But we're very excited about where we stand. It's a great strategic program for us as a company, and we are, of course, super proud that the team achieved this major milestone of $1 billion in revenues.
Patrick Kaltenbach: It's a great strategic program for us as a company. We are, of course, super proud that the team achieved this major milestone of $1 billion revenues in services.
Patrick Kaltenbach: It's a great strategic program for us as a company. We are, of course, super proud that the team achieved this major milestone of $1 billion revenues in services.
Speaker #4: services. Great.
Speaker #10: Thank you.
Josh Waldman: Great. Thank you.
Josh Waldman: Great. Thank you.
Speaker #8: and answer session. I would now like to turn the call back over to Adam Ulman for closing
Operator: That concludes the question-and-answer session. I would now like to turn the call back over to Adam Uhlman for closing remarks.
Operator: That concludes the question-and-answer session. I would now like to turn the call back over to Adam Uhlman for closing remarks.
Speaker #8: Remarks. Hey, thanks, everybody, for joining us today and for
Speaker #6: Your excellent questions. Please feel free to reach out if you have any follow-ups, and have a great weekend. Take care. Bye.
Multiple Analysts: Hey, thanks, everybody, for joining us today and for your excellent questions. Please feel free to reach out if you have any follow-ups. Have a great weekend. Take care. Bye.
Adam Uhlman: Hey, thanks, everybody, for joining us today and for your excellent questions. Please feel free to reach out if you have any follow-ups. Have a great weekend. Take care. Bye.
Operator: This concludes today's conference call. You may now disconnect.
Operator: This concludes today's conference call. You may now disconnect.
