Q1 2026 Bruker Corp Earnings Call

May 6, 2026

Operator 2: Good day, welcome to the Bruker Corporation Q1 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key followed by 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Joe Kostka, Director of Bruker's Investor Relations. Please go ahead.

Operator: Good day, welcome to the Bruker Corporation Q1 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key followed by 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Joe Kostka, Director of Bruker's Investor Relations. Please go ahead.

Speaker #2: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star key followed by one. On a touch-tone phone.

Speaker #2: And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joe Kostka, Director of BRUKER's Investor Relations.

Speaker #2: Please go ahead. Good morning. I would like to welcome everyone to BRUKER Corporation's First Quarter 2026 earnings conference call. My name is Joe Kostka, and I'm the Director of BRUKER Investor Relations.

Joe Kostka: Good morning. I would like to welcome everyone to Bruker Corporation's Q1 2026 Earnings Conference Call. My name is Joe Kostka, and I'm the Director of Bruker Investor Relations. Joining me on today's call are Frank Laukien, our President and CEO, and Gerald Herman, our EVP and CFO. In addition to the earnings release we issued earlier today, during today's conference call, we will be referencing a slide presentation that can be downloaded from the Events and Presentation section of Bruker's Investor Relations website. During today's call, we will be highlighting non-GAAP financial information. Reconciliations of our GAAP to non-GAAP financial measures are included in our earnings release and are posted on our website at ir.bruker.com. Before we begin, I would like to reference Bruker's Safe Harbor statement, which is shown on slide 2 of the presentation.

Speaker #2: Joining me on today's call are Frank Laukien, our President and CEO, and Gerald Herman, our EVP and CFO. In addition to the earnings release we issued earlier today, during today's conference call we will be referencing a slide presentation that can be downloaded from the Events and Presentations section of Bruker's Investor Relations website.

Speaker #2: During today's call, we will be highlighting non-GAAP financial information. Reconciliations of our GAAP to non-GAAP financial measures are included in our earnings release and are posted on our website at ir.bruker.com.

Speaker #2: Before we begin, I would like to reference BRUKER's Safe Harbor statement, which is shown on slide two of the presentation. During this conference call, we will or may make forward-looking financial and operational performance of the company that involve risks and uncertainties, including those related to our recent acquisitions, geopolitical risks, wars or blockades, market demand, tariffs, currency exchange rates, competitive dynamics, or supply chains.

Joe Kostka: During this conference call, we will or may make forward-looking statements regarding future events in the financial and operational performance of the company that involve risks and uncertainties, including those related to our recent acquisitions, geopolitical risks, wars or blockades, market demand, tariffs, currency exchange rates, competitive dynamics, or supply chains. The company's actual results may differ materially from such statements. Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K for the period ending 31 December 2025, as updated by our other SEC filings, which are available on our website and on the SEC's website. Also, please note that the following information is based on current business conditions and our outlook as of today, 6 May 2026.

Speaker #2: The company's actual results may differ materially from such statements. Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K for the period ending December 31, 2025, as updated by our other SEC filings, which are available on our website and on the SEC's website.

Speaker #2: Also, please note that the following information is based on current business conditions and our outlook as of today, May 6, 2026. We do not intend to update our forward-looking statements based on new information, future events, or for other reasons except as may be required by law prior to the release of our second quarter 2026 financial results expected in early August 2026.

Joe Kostka: We do not intend to update our forward-looking statements based on new information, future events, or for other reasons, except as may be required by law prior to the release of our Q2 2026 financial results expected in early August 2026. You should not rely on these forward-looking statements as necessarily representing our views or outlook as of any date after today. We will begin today's call with Frank providing an overview of our business progress. Gerald will cover the financials for the Q1 2026 in more detail and comment on our reconfirmed full year 2026 financial outlook. I'd like to turn the call over to Bruker's CEO, Frank Laukien.

Speaker #2: You should not rely on these forward-looking statements as necessarily representing our views or outlook as of any date after today. We will begin today's call with Frank providing an overview of our business progress.

Speaker #2: Gerald will then cover the financials for the first quarter of 2026 in more detail and comment on our reconfirmed full year 2026 financial outlook.

Speaker #2: Now, I'd like to turn the call over to BRUKER's CEO, Frank Laukien. Thank you, Joe. Good morning, everyone. Thank you for joining us on today's first quarter 2026 earnings call.

Frank Laukien: Thank you, Giles. Good morning, everyone. Thank you for joining us on today's Q1 2026 earnings call. While US academic demand, tariff, and currency headwinds have continued to pressure our year-over-year results, we are pleased that our Q1 2026 financial performance came in well ahead of expectations. We are also encouraged that in Q1, our Bruker Scientific Instruments segment or BSI bookings grew organically in the high single digits. We saw strength in industrial research orders and encouraging double-digit bookings growth year-over-year in academic orders from outside the United States. This demonstrates, we think, that our novel and performance-leading post-genomic disease biology research solutions are truly enabling, that we can expect momentum in US ACA Gov demand once the NIH funding environment improves.

Speaker #2: While U.S. academic demand, tariff, and currency headwinds have continued to pressure our year-over-year results, we are pleased that our first quarter 2026 financial performance came in well ahead of expectations.

Speaker #2: We are also encouraged that in the first quarter, our BRUKER scientific instrument segment, or BSI bookings, grew organically in the high single digits. We saw strength in industrial research orders, and encouraging double-digit bookings growth year-over-year in academic orders from outside the United States.

Speaker #2: This demonstrates, we think, that our novel and performance-leading post-genomic disease biology research solutions are truly enabling, and that we can expect momentum in the U.S.

Speaker #2: ACAGAV demand once the NIH funding environment improves. In the first quarter, we benefited from strong demand in a few areas more unique to BRUKER, as our AI-driven semiconductor metrology business and our similarly AI-driven CY scientific software and lab digitization businesses as well as our European Middle East security detection business also organic bookings growth of greater than 20% in the quarter.

Frank Laukien: In the first quarter, we benefited from strong demand in a few areas more unique to Bruker as our AI-driven semiconductor metrology business and our similarly AI-driven SciY scientific software and lab digitization businesses, as well as our EMEA security detection business, also organic bookings growth of greater than 20% in the quarter. Let me give you a little bit more color. Order strength in semi metrology, which is now a greater than $300 million annual revenue business for Bruker, was driven by AI demand for memory chips and for advanced packaging, particularly in the US and in APAC. Many of the world's top semiconductor manufacturers rely on Bruker metrology tools for front-end and back-end applications, including development for their next-generation products. The rapidly increasing need for computing power and emerging applications for artificial intelligence provide strong secular tailwinds in semi metrology.

Speaker #2: Let me give you a little bit more color. Order strength in semi-metrology, which is now a greater than $300 million annual revenue business for Bruker, was driven by AI demand for memory chips and for advanced packaging, particularly in the U.S.

Speaker #2: and in APAC. Many of the world's top semiconductor manufacturers rely on BRUKER metrology tools for front-end and back-end applications including development for their next-generation products.

Speaker #2: The rapidly increasing need for computing power and emerging applications for artificial intelligence provides strong secular tailwinds in semi-metrology. Another area that may have been less visible to you so far, another area of our portfolio benefiting from the AI mega-trend, is CY, which is now about a $50 million revenue business.

Frank Laukien: Another area that may have been less visible to you so far, another area of our portfolio benefiting from the AI mega trend is SciY, which is now about a $50 million revenue business. SciY offers lab digitization and scientific software going from research through development all the way to manufacturing and enabling integration, automation, and digital transformation. These SciY solutions facilitate the capture, ingestion, and standardization of data so that it is AI-ready, alleviating bottlenecks in the digital transformation that is revolutionizing scientific research and paves the path to so-called self-driving labs or SDL, which can accelerate R&D, quality control, and also chemical and biomolecular manufacturing. In another area, our security detection business, we are seeing significant demand for our explosive trace detection systems from airports in Europe and the Middle East, as well as for CBRN detection solutions.

Speaker #2: CY offers lab digitization and scientific software going from research through development all the way to manufacturing and enabling integration automation and digital transformation. These CY solutions facilitate the capture, ingestion, and standardization of data so that it is AI-ready alleviating bottlenecks in the digital transformation that is revolutionizing scientific research and paves the path to so-called self-driving labs or SDL which can accelerate R&D, quality control, and also chemical and biomolecular manufacturing.

Speaker #2: In another area, our security detection business, we are seeing significant demand for our explosives trace detection systems from airports in Europe and the Middle East as well as for CBRN detection solutions.

Frank Laukien: Our security detection business has grown from a niche business a few years ago to about $70 million in revenue expected this year. We are delighted in the turnaround in our BEST segment, where we have obtained in Q1 about $80 million of multi-year orders for our research instruments subsidiary Fusion Technologies, fusion energy. In the last 5 months, December through April, about $600 million of multi-year orders for our high-performance superconductors from major MRI customers. All good at BEST. Strong academic demand for our post-genomic solutions outside of the US and these mentioned areas of idiosyncratic strength were contributors to our BSI book-to-bill ratio, which in Q1 was again comfortably above 1.0, now the third consecutive quarter.

Speaker #2: Our security detection business has grown from a niche business a few years ago to about 70 million in revenue expected this year. Finally, we are delighted in the turnaround in our best segment where we have obtained in the first quarter about 80 million of multi-year orders for our research instrument subsidiary fusion technologies, fusion energy, and in the last five months, December through April, about 600 million of multi-year orders for our high-performance superconductors from major MRI customers.

Speaker #2: So, all good at best. So, strong academic demand for our post-genomic solutions outside of the U.S., and these mentioned areas of idiosyncratic strength were contributors to our BSI book-to-bill ratio, which in Q1 was again comfortably above 1.0.

Speaker #2: Now the third consecutive quarter. This encouraging momentum is expected to carry us back to organic revenue growth in the second quarter and for the remainder of the year.

Frank Laukien: This encouraging momentum is expected to carry us back to organic revenue growth in Q2 and for the remainder of the year. Very importantly, Bruker's innovation engine has been quite impressive, we think, this year already. We have introduced very impactful new products and solutions at recent scientific and medical conferences. These launches further strengthen our leadership position in NMR. I think we are clearly leading the way in multi-omic, high-fidelity, and HiPlex spatial biology. We are also bringing major innovations to clinical microbiology and molecular diagnostics. Let's dig in. Let's turn to slide 4 now for the P&L performance of the business. Our Q1 reported revenues of $823 million increased 2.7% year over year.

Speaker #2: Very importantly, BRUKER's innovation engine has been quite impressive, we think, this year already, and we have introduced very impactful new products and solutions at recent scientific and medical conferences.

Speaker #2: These launches further strengthen our leadership position in NMR, I think we are clearly leading the way in multi-omic high fidelity and high-flex spatial biology and we also bringing major innovations to clinical microbiology and molecular diagnostics.

Speaker #2: So let's dig in. Let's turn to slide four now for the P&L performance of the business. Our Q1 reported revenues of $823 million increased 2.7% year-over-year and FX tailwind of 4.5 and a growth contribution from M&A of 2.6% more than offset an organic decline of 4.4%.

Frank Laukien: An FX tailwind of 4.5 and a growth contribution from M&A of 2.6% more than offset an organic decline of 4.4%. BSI segment revenues were down 5% organically, while BEST saw organic revenue growth of 3% net of intercompany eliminations. Our Q1 2026 non-GAAP gross and operating margins were 50% and 10.2%, respectively. Both down year-over-year and both inclusive of significant headwinds from foreign currency trends year-over-year, also both ahead of expectations. Our Q1 2026 diluted non-GAAP EPS was $0.31, down from $0.47 in the Q1 2025, meaningfully ahead of our prior expectations.

Speaker #2: BSI segment revenues were down 5% organically while best saw organic revenue growth of 3% net of intercompany eliminations. Our first quarter 2026 non-GAAP growth and operating margins were 50% and 10.2% respectively both down year-over-year and both inclusive of significant headwinds from foreign currency trends year-over-year but also both ahead of expectations.

Speaker #2: Our Q1 2026 diluted non-GAAP EPS was 31 cents down from 47 cents in the first quarter of 2025 but meaningfully ahead of our prior expectations.

Frank Laukien: Please turn to slides 5 and 6, where we highlight the Q1 constant exchange rate, or CER, revenue and bookings performance of our three scientific instruments groups and our BEST segment year-over-year. In Q1, Bruker BioSpin group revenue was USD 198 million, with a CER decline in the high single digits%. Revenue growth in preclinical imaging systems, SciY Software, and our services business were more than offset by weakness in NMR systems due to soft Accugov performance in China and Europe. In Q1, Bruker BioSpin installed the world's highest field preclinical MRI system, an 18 Tesla preclinical system at the Champalimaud Foundation in Lisbon, Portugal. However, Bruker BioSpin saw a headwind to revenue growth from the 1.2 gigahertz NMR installed in Q1 2025, as there were no gigahertz class systems in Q1 2026. Right.

Speaker #2: Please turn to slides five and six where we highlight the first quarter constant exchange rate or CER revenue and bookings performance of our three scientific instruments groups and our best segment year-over-year.

Speaker #2: In the first quarter, biospin group revenue was $198 million with a CER decline in the high single digits percentage. Revenue growth in preclinical imaging systems CY software and our services business were more than offset by weakness in NMR systems due to soft ACAGAF performance in China.

Speaker #2: And Europe. In the first quarter, biospin installed the world's highest field preclinical MRI system an 18 Tesla preclinical system at the Shan Palimo Institute in Lisbon, Portugal.

Speaker #2: However, biospin saw a headwind to revenue growth from the 1.2 gigahertz NMR installed in the first quarter of 2025 as there were no gigahertz class systems in Q1 of 2026.

Frank Laukien: In Q1, our CALID group had revenues of $316 million, with mid-single digit percentage CER growth. CALID growth was led by molecular spectroscopy, which also saw strength in security detection orders. Microbiology and infection diagnostics had solid revenue growth, in life science mass spectrometry, contributions from our recent M&A more than offset revenue software in US Accugov. Encouragingly, life science mass spec orders growth in the US Accugov was positive in Q1 year over year, perhaps it is stabilizing. Of course, we'd like it to come back and rebound, maybe that will happen in the next couple of quarters. Turn to slide 6 now. In Q1, Bruker NANO revenue was $246 million, with CER revenue declining mid-single digits percentage. Strong revenue growth in semi-metrology was more than offset by weakness in Accugov and industrial markets.

Speaker #2: Right. In Q1, our CalAG group had revenues of $316 million, with mid-single-digit percentage CER growth. CalAG growth was led by molecular spectroscopy, which also saw strength in security detection orders.

Speaker #2: Microbiology and infection diagnostics had solid revenue growth and in life science mass spectrometry contributions from our recent M&A more than offset revenue software in U.S.

Speaker #2: ACAGAF. Encouragingly, life science mass spec orders growth in the U.S. ACAGAF was positive in Q1 year-over-year so perhaps it is stabilizing, of course, we'd like it to come back and rebound but maybe that'll happen in the next couple of quarters.

Speaker #2: Turn to slide six now. In Q1, Broker Nano revenue was $246 million with CER revenue declining mid-single digits percentage. Strong revenue growth in semi-metrology was more than offset by weakness in ACAGAF and industrial markets.

Frank Laukien: NANO had strong orders across the group, including tools for X-ray industrial research, spatial biology, high bandwidth memory, and advanced packaging metrology, all driven by AI. Q1 BEST CER revenues grew 3% net of intercompany eliminations, driven by our superconducting wire business. Research Instruments, RI, that business saw very strong orders in Q1, as I said earlier, from Fusion. BEST received very large multi-year superconductor orders in the last 5 months from all 3 major MRI OEM customers. Moving on to slide 7, I won't, the next 3 slides, I will not read everything, but I'll give you a highlight. We had pretty significant NMR innovations at the experimental NMR conference in Asilomar in 2026 for research and pharma markets. A lot of it is software, a lot of it is AI-driven, making protein NMR really much easier.

Speaker #2: Nano had strong orders across the group including tools for X-ray industrial research, spatial biology, high-bandwidth memory and advanced packaging metrology all driven by AI.

Speaker #2: Finally, first quarter best CER revenues grew 3% net of intercompany eliminations driven by our superconducting wire business. Research instruments RI business saw very strong orders in Q1 as I said earlier from fusion and best received very large multi-year superconductor orders in the last five months from all three major MRI OEM customers.

Speaker #2: Moving on to slide seven, I won't the next three slides I will not read everything but I'll give you a highlight. We had a pretty significant NMR innovations at the experimental NMR conference in Asilomar in 2026 for research and pharma markets a lot of it is software a lot of it is AI-driven making protein NMR really much easier in the past I think protein NMR had a disadvantage come to compare to cryoEM or X-ray crystallography in that it required more expertise but that's really pretty changing pretty rapidly and AI with its unique abilities to get dynamic and binding information is becoming much, much more accessible.

Frank Laukien: In the past, I think protein NMR had a disadvantage compared to cryo-EM or X-ray crystallography in that it required more expertise, that's really pretty changing pretty rapidly. AI, with its unique abilities to get dynamic and binding information, is becoming much, much more accessible. There are some other innovations from extreme new sensitivities that enable new fields, shown on the right, to just a good old next-generation NMR console, the AVANCE NEO-X, which we think will unlock a replacement cycle.

Speaker #2: There are some other innovations from extreme new sensitivities that enable new fields shown on the right to just a good old next-generation NMR console the advanced Neo X which we think will unlock a replacement cycle.

Frank Laukien: Moving to slide 8, at AGBT, and then following AACR, I really think Bruker is clearly leading the way in spatial biology for capturing complexity of disease biology and integrating it from, well, even 3D genomics with a very unique PaintScape system that we launched to the CosMx system, which is upgradable for our customers and which, of course, we're already 1 year ago. We showed multi-omic whole human transcriptome. We've added now a whole mouse transcriptome. We're doing T-cell receptors, microRNA. Most importantly, or very importantly, I would say, we have added HiPlex proteomics. That combination of whole transcriptome and HiPlex proteomics is really very, very powerful and readily adopted by comprehensive pathways for better LLMs or just for better disease biology. We think that continues to be very unique. Enough on that slide.

Speaker #2: Moving to slide eight. At AGBT and then following ACR I really think Broker is clearly leading the way in spatial biology for capturing complexity of disease biology and integrating it from well even 3D genomics with a very unique painscape system that we launched to the cosmic system which is upgradable for our customers and which of course we're already a year ago we showed multi-omic whole human transcriptome we've added now a whole mouse transcriptome we're doing T-cell receptors microRNA and most importantly or very importantly I would say we have added high-flex proteomics that combination of all transcriptome and high-flex proteomics is really very, very powerful and readily adopted by comprehensive pathways for better LLMs or just for better disease biology we think that's continues to be very unique.

Frank Laukien: Let me talk about clinical microbiology in slide nine. We had another conference, crucial conference, the Global ESCMID conference, which stands for Clinical Microbiology and Infectious Disease in Munich. We introduced our new MyGenius PRO higher throughput system, sample-to-answer higher throughput system for all the markets that we drive from Bruker ELITech. Delightfully, this is also the system that Hitachi is introducing in Japan using our molecular diagnostic assays. This is an important development. Meanwhile, we have many, many introductions, too many to specify in the MALDI Biotyper workflow and identification and even hospital-acquired using the IR Biotyper. I won't go through it. This is more for your reading if you are interested. Significant innovation in microbiology, typically a state area of diagnostics.

Speaker #2: Enough on that slide. Let me talk about clinical microbiology and slide nine. We had another crucial conference—the Global ESMID Conference, which stands for Clinical Microbiology and Infectious Disease, in Munich.

Speaker #2: We in introduced our new MyGenius Pro higher throughput system sampled answer higher throughput system for all the markets that we drive from Broker Elitech and delightfully this is also the system that Hitachi is introducing in Japan using our molecular diagnostic assays.

Speaker #2: This is very an important development. Meanwhile, we have many, many introductions too many to specify in the multi-biotyper workflow and identification and even hospital-acquired using the IR biotyper I won't go through it this is more for your reading if you are interested.

Speaker #2: But significant innovation in microbiology typically a state area of diagnostics. Right. So in summary, good execution disciplined management by our teams drove up drove us to outperform our expectations in the first quarter order trends are improving including in unique areas of our diversified portfolio and we're optimistic that improved organic growth will follow.

Frank Laukien: In summary, good execution, disciplined management by our teams drove us to outperform our expectations in Q1. Order trends are improving, including in unique areas of our diversified portfolio, and we're optimistic that improved organic growth will follow. Importantly, we're very committed to controlling and reducing costs, which is crucial to improving our margin profile rapidly. Benefits from our cost out plans and Bruker management process will be explained by Gerald, but are now clearly evident in our P&L. We're further expanding these cost-cutting initiatives, as Gerald will discuss shortly, keeping us on track not only for significant margin expansion and strong EPS growth this year, but also into next year and beyond. Given the dynamic macro, shall we say, and geopolitical environment, we believe it is prudent for now to confirm our prior 2026 guidance.

Speaker #2: Importantly, we're very committed to controlling and reducing costs which is crucial to improving our margin profile rapidly benefits from our cost out plans and Broker management process will be explained by Gerald but are now clearly evident in our P&L and we're further expanding these cost-cutting initiatives as Gerald will discuss shortly keeping us on track not only for significant margin expansion and strong EPS growth this year but also into next year and beyond.

Speaker #2: Given the dynamic macro shall we say and geopolitical environment we believe it is prudent for now to confirm our prior 26 guidance. The outperformance in Q1 has been encouraging and encouraging start to the year and it provides us with improved visibility and confidence and we look to build on that momentum in the second quarter.

Frank Laukien: The outperformance in Q1 has been encouraging, an encouraging start to the year, and it provides us with improved visibility and confidence, and we look to build on that momentum in Q2. With that, let me turn things over to our CFO, Gerald Herman. Go ahead.

Speaker #2: So with that let me turn things over to our CFO Gerald Herman. Go ahead. Thanks very much Frank and thank you everyone for joining us today.

Gerald Herman: Thanks very much, Frank. Thank you everyone for joining us today. I'm pleased to provide more detail on Bruker's Q1 2026 financial performance, starting on slide 11. Despite significant macro and foreign exchange headwinds in the quarter, we delivered financial performance ahead of expectations we outlined in our earnings call in February. Q1 2026 reported revenue increased 2.7% to $823.4 million, which reflects an organic revenue decrease of 4.4% year over year, well ahead of our original expectations. Acquisitions added 2.6% to our top line, and foreign exchange was 4.5% revenue tailwind. The highlight of the quarter was our strong bookings performance with BSI segment organic bookings up high single digits and bookings growth across all groups.

Speaker #2: I'm pleased to provide more detail on Broker's first quarter 2026 financial performance. Starting on slide 11. Despite significant macro and foreign exchange headwinds in the quarter we delivered financial performance ahead of expectations we outlined in our earnings call in February.

Speaker #2: The first quarter 26 reported revenue increased 2.7% to $823.4 million which reflects an organic revenue decrease of 4.4% year over year well ahead of our original expectations.

Speaker #2: Acquisitions added 2.6% to our top line and foreign exchange was 4.5% revenue tailwind. The highlight of the quarter was our strong bookings performance with BSI segment organic bookings up high single digits and bookings growth across all groups.

Gerald Herman: We saw order strength in academic government research, excluding the US, in industrial and semi-end markets, and geographically in Europe and the rest of the APAC region, with marked order improvement also seen in China. Back to revenue for the quarter. Geographically, and on a year-over-year organic basis, in Q1 2026, our Americas and European revenue both declined in the low single digits percentage, while Asia Pacific revenue declined in the low double digits percentage, driven by a greater 20% decline in revenue performance for China. In our EMEA region, revenue was up low single digit percentage. From an end market perspective, we saw organic revenue growth in semi, biopharma, and hospital clinical markets more than offset by double-digit declines in academic government research and industrial markets.

Speaker #2: We saw order strength in academic government research excluding the US in industrial and semi and markets and geographically in Europe and the rest of the APAC region with marked order improvement also seen in China.

Speaker #2: Back to revenue for the quarter geographically and on a year over year organic basis in the first quarter of 26 our Americas and European revenue both declined in the low single digits percentage while Asia Pacific revenue declined in the low double digits percentage driven by a greater 20% decline in revenue performance for China.

Speaker #2: In our IMEA region revenue was up low single digit percentage. From an end market perspective we saw organic revenue growth in semi biopharma and hospital clinical markets more than offset by double digit declines in academic government research and industrial markets.

Gerald Herman: Within the BSI segment, systems revenue declined in the low double-digit percentage, and aftermarket revenue grew in the high single-digit percentage organically year over year. Q1 2026 non-GAAP gross margin decreased 130 basis points to 50%. Non-GAAP operating margin was 10.2%, a decrease of 250 basis points year over year. The decrease reflects headwinds of 350 basis points from lower volume and unfavorable mix, 170 basis points from foreign exchange, and 30 basis points from tariffs. These headwinds were partially offset by a 300 basis point benefit from our cost-saving actions taken in fiscal year 2025, now helping our performance in fiscal year 2026.

Speaker #2: Within the BSI segment, systems revenue declined in the low double-digit percentage, and aftermarket revenue grew in the high single-digit percentage organically year over year.

Speaker #2: Q1 2026 non-gap gross margin decreased 130 basis points to 50%. Non-gap operating margin was 10.2% a decrease of 250 basis points year over year.

Speaker #2: The decrease reflects headwinds of 350 basis points from lower volume and unfavorable mix 170 basis points from foreign exchange and 30 basis points from tariffs.

Speaker #2: These headwinds were partially offset by a 300 basis point benefit from our cost-saving actions taken in fiscal year 25 now helping our performance in fiscal year 26.

Gerald Herman: On a go-forward basis, we expect the year-over-year foreign exchange and tariff headwinds on margins to ease as we lap the introduction of US tariffs and the significant depreciation of the US dollar, which occurred in Q2 2025. On a non-GAAP basis, Q1 2026 diluted EPS was $0.31, down from $0.47 in Q1 2025. Our non-GAAP EPS performance includes a foreign exchange headwind of $0.05 and a $0.05 impact from the MCP offering we completed in September 2025, net of interest cost savings. On a GAAP basis, we reported diluted EPS of $0.02 compared to $0.11 in Q1 2025, with the decline mostly due to lease impairment and restructuring charges related to our cost-saving actions.

Speaker #2: On a go-forward basis we expect the year over year foreign exchange and tariff headwinds on margins to ease as we lap the introduction of US tariffs and the significant depreciation of the US dollar which occurred in the second quarter of 2025.

Speaker #2: On a non-gap basis Q1 26 diluted EPS was 31 cents down from 47 cents in Q1 of 25. Our non-gap EPS performance includes a foreign exchange headwind of 5 cents and a 5 cent impact from the MCP offering we completed in September 2025 net of interest cost savings.

Speaker #2: On a gap basis we reported diluted EPS of 2 cents compared to 11 cents in the first quarter of 2025 with a decline mostly due to lease impairment and restructuring charges related to our cost-saving actions.

Gerald Herman: Beyond the $100 to 120 million in annualized cost-saving targets that we announced last year, we're now tracking around $140 million in expected savings on an annualized basis. We cleared most European labor hurdles in Q1 and expect to see the majority of savings reflected in our Q2 and H2 results in fiscal year 2026 and beyond. Weighted average diluted shares outstanding in Q1 2026 were 152.7 million, an increase of 800,000 shares or 0.5% from Q1 2025. Turning now to slide 12. We generated $71 million of operating cash flow in Q1 2026, up slightly compared to the prior year.

Speaker #2: Beyond the 100 to 120 million dollars in annualized cost-saving targets that we announced last year we're now tracking around 140 million dollars in expected savings on an annualized basis.

Speaker #2: We cleared most European labor hurdles in the first quarter and expect to see the majority of savings reflected in our second quarter and second half results in fiscal year 26 and beyond.

Speaker #2: Weighted average diluted shares outstanding in the first quarter of 2026 were 152.7 million an increase of 800,000 shares or 0.5% from the first quarter of 2025.

Speaker #2: Turning now to slide 12 we generated 71 million dollars of operating cash flow in the first quarter of 26 up slightly compared to the prior year.

Gerald Herman: CapEx investments were $24 million, resulting in free cash flow of $47 million for Q1, an improvement of $8 million year-over-year. We finished Q1 with cash and cash equivalents of approximately $133 million. During Q1, we continued our delevering actions with a $180 million debt pay down, eliminating a Swiss franc-based term loan. At the end of Q1, our net leverage ratio declined to 2.9x. Turning now to slide 14. We are reconfirming our full year 2026 outlook using the stronger execution in Q1 to substantially de-risk the H2 ramp in growth margins and EPS. We're reconfirming the following guidance. Reported revenue of $3.57 to 3.60 billion, representing reported growth of 4% to 5% compared to fiscal year 2025.

Speaker #2: Capital expenditure investments were 24 million resulting in free cash flow of 47 million dollars for the quarter an improvement of 8 million dollars year over year.

Speaker #2: We finished the quarter with cash and cash equivalents of approximately 133 million dollars. During the quarter we continued our deleveraging actions with 180 million dollar debt paydown eliminating a Swiss franc-based term loan.

Speaker #2: At the end of the first quarter our net leverage ratio declined to 2.9 times. Turning now to slide 14 we are reconfirming our full year 26 outlook using the stronger execution in the first quarter to substantially de-risk the second half ramp in growth margins and EPS.

Speaker #2: Therefore we reconfirming the following guidance. Reported revenue of 3.57 to 3.60 billion dollars representing reported growth of 4 to 5 percent compared to fiscal year 25.

Gerald Herman: Organic revenue growth of 1% to 2% year-over-year, with acquisitions contributing 1.5% and an estimated foreign exchange tailwind of also 1.5%. We continue to expect organic non-GAAP operating margin expansion of 300 to 350 basis points, largely driven by our cost saving actions, offset partially by approximately 50 basis points of foreign exchange headwind and resulting in a non-GAAP operating margin expansion of 250 to 300 basis points compared to the 12.6% operating margin posted in fiscal year 2025. On the bottom line, we continue to expect non-GAAP EPS for fiscal year 2026 in a range of $2.10 to $2.15, or non-GAAP EPS growth of 15% to 17% compared to fiscal year 2025.

Speaker #2: Organic revenue growth of 1% to 2% year over year, with acquisitions contributing 1.5% and an estimated foreign exchange tailwind of also 1.5%. We continue to expect organic non-GAAP operating margin expansion of 300 to 350 basis points, largely driven by our cost-saving actions, offset partially by approximately 50 basis points of foreign exchange headwind, and resulting in a non-GAAP operating margin expansion of 250 to 300 basis points compared to the 12.6% operating margin posted in fiscal year '25.

Speaker #2: On the bottom line, we continue to expect non-GAAP EPS for fiscal year '26 in a range of $2.10 to $2.15, or non-GAAP EPS growth of 15% to 17% compared to fiscal year '25.

Gerald Herman: We're estimating a foreign exchange headwind of 8% to fiscal year 2026 EPS, implying non-GAAP CER EPS growth of 23% to 25% year over year. Other guidance assumptions are listed on the slide. Our fiscal year 2026 ranges have been updated for foreign currency rates as of 31 March 2026. Now to add a bit of color to Q2 2026, we've now delivered 3 consecutive quarters with a BSI book-to-bill over 1 and expect to return to organic revenue growth in Q2. We estimate Q2 organic revenue growth to be in the low to mid single digits percentage year over year.

Speaker #2: We're estimating a foreign exchange headwind of 8% to fiscal year 26 EPS implying non-gap CER EPS growth of 23 to 25 percent year over year.

Speaker #2: Other guidance assumptions are listed on the slide. Our fiscal year 26 ranges have been updated for foreign currency rates as of March 31, 2026.

Speaker #2: Now to add a bit of color to the second quarter of 2026 we've now delivered three consecutive quarters with a BSI book to bill over one and expect to return to organic revenue growth in the second quarter.

Speaker #2: We estimate second quarter organic revenue growth to be in the low to mid single digits percentage year over year. With the easing of tariffs and foreign exchange headwinds we experienced in the second quarter of 25 in the second quarter of 26 we expect a meaningful year over year step up in non-gap operating margin and non-gap EPS.

Gerald Herman: With the easing of tariffs and foreign exchange headwinds we experienced in Q2 2026, we expect a meaningful year-over-year step-up in non-GAAP operating margin and non-GAAP EPS, with continued improvements in both metrics expected in H2 of the year. To wrap up, Bruker's Q1 2026 results were pressured by macro and market headwinds, but our teams executed very well to deliver results ahead of our expectations. Coupled with continued momentum in our order book, this gives us further confidence in our ability to deliver solid financial improvements for the remainder of the year and beyond. With that, I'd like to turn the call back to Joe. Thank you very much.

Speaker #2: With continued improvements in both metrics expected in the second half of the year. To wrap up BRUKER's first quarter 26 results were pressured by macro and market headwinds but our team's executed very well to deliver results ahead of our expectations.

Speaker #2: Coupled with continued momentum in our order book this gives us further confidence in our ability to deliver solid financial improvements for the remainder of the year and beyond.

Speaker #2: And with that I'd like to turn the call back to Joe. Thank you very much.

Joe Kostka: Thanks, Gerald. We will now begin the Q&A portion of the call. As a reminder, to allow everyone time for questions, we ask that you limit yourself to 1 question and 1 follow-up. Operator.

Speaker #1: Thanks Gerald. We'll now begin the Q&A portion of the call. As a reminder to allow everyone time for questions we ask that you limit yourselves to one question and one follow-up.

Speaker #1: Operator?

Operator 2: We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question is from Puneet Souda with Leerink Partners. Please go ahead. Excuse me.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question is from Puneet Souda with Leerink Partners. Please go ahead. Excuse me.

Speaker #3: We will now begin the question and answer session. To ask a question you may press star then 1 on your touch tone phone. If you are using a speakerphone please pick up your handset before pressing the keys.

Speaker #3: If at any time your question has been addressed and you would like to withdraw your question please press star then 2. At this time we will pause momentarily to assemble our roster.

Speaker #3: The first question is from Puneet Sudha with Lerink Partners. Please go ahead. Excuse me, I—

Gerald Herman: We do not hear a question.

Speaker #1: We do not we do not hear a question.

Operator 2: Yes. I'm sorry. I put Michael Ryskin on the podium with Bank of America. Puneet will be next.

Operator: Yes. I'm sorry. I put Michael Ryskin on the podium with Bank of America. Puneet will be next.

Speaker #3: Yes. I'm sorry. I put Michael Ryskin in on the on the podium with Bank of America. Puneet will be next.

Michael Ryskin: Great. Sure, I'll take that. Thanks, operator. Thanks, Frank. Congrats on the quarter. Appreciate all that commentary. I want to start with some of your comments on demand trends OUS. You talked about ANG being a little bit better, OUS. You know, the US weakness is not surprising. Would you have any additional color you can provide on sort of how sustainable that is? You know, you've got good visibility into order trends. Just, you know, do you think that could persist going forward and especially, you know, your comments on China and Europe? Thanks.

Speaker #4: Great. Sure I'll take that. thanks operator. thanks thanks Frank. congrats on the quarter. and and appreciate all the commentary. I wanna start with some of your comments on demand trends OUS.

Speaker #4: You talked about A&G being a little bit better. OUS you know the US weakness is not surprising. we don't have any additional color you can provide on sort of how sustainable that is.

Speaker #4: You know you've got good visibility into order trends. just you know do you think that could persist going forward and especially you know your comments on China and Europe?

Speaker #4: Thanks.

Frank Laukien: Y-hi, Mike. Yeah, thank you. Thanks for your comments. I think the order growth in Q1 outside of the United States and AGGAF was particularly high. That's probably not sustainable, but it's healthy. You know, it's quite healthy and also shows that, you know, even with incremental growth in AGGAF budgets outside of the United States, that our tools are very much in demand and are a high priority. People really want the proteomics, metabolomics, multi-omics, very differentiated tools. The 2nd generation proteoform tools, functional proteomics tools with the timsOmni is very much in demand. I think it's ushering a new era in proteomics.

Speaker #1: Y+yeah hi Mike. Yeah thank you. Thanks for your comments. I I think the order the the order growth in Q1 outside of the United States and ECOGOV was particularly high.

Speaker #1: That's probably not sustainable. But it's healthy. You know it's quite healthy and also shows that you know even with incremental growth in ECOGOV budgets outside of the United States that our tools are very much in demand and our high priority so people really want the proteomics metabolomics multiomics very differentiated tools.

Speaker #1: The second generation proteoform tools functional proteomics tools with a TIMSS Omni is in very much in demand. I think it's ushering a new era in proteomics.

Frank Laukien: Yeah, we're leading the way in spatial biology and good old NMR. NMR and related techniques are just very powerful and becoming less, you know, less the domain of just experts becoming via AI, quite honestly, becoming more accessible, namely the results and the insights, not necessarily how to run the spectrometer. It's good trends, and I think it shows that we're not just going with a macro A&G trends, but I think that we're hopefully have a right to win, as it's sometimes called, with, you know, particularly relevant tools that are truly enabling. I think it's a good indicator. I wouldn't quite take the OUS Q1 order rate and extrapolate from that because that was, you know, that was, but I think we can look at high single-digit growth in these types of orders.

Speaker #1: And yeah, we're leading the way in spatial biology and good old NMR. NMR and related techniques are just very powerful and becoming less, you know, less the domain of just experts, becoming—via AI, quite honestly—becoming more accessible; namely, the results and the insights, not necessarily how to run the spectrometer.

Speaker #1: So it's it's good trends and I think it shows that we're not just going with a macro A&G trends but I think that we're hopefully have a right to win as it's sometimes called with you know particularly relevant tools that are truly enabling.

Speaker #1: So I think it's a good indicator. I wouldn't quite take the OUS Q1 order rate and extrapolate from that 'cause that was you know that was but I think we'll we can look at high single digit growth in the in in these types of orders and I I am more optimistic than IH funding and and funding disbursement will come back now in Q2 and maybe that makes for good Q3 orders.

Frank Laukien: I am more optimistic than NIH funding and funding disbursement will come back now in Q2. Maybe that makes for good Q3 orders. We shall see.

Speaker #1: We shall see.

Michael Ryskin: Okay. That's helpful. Then maybe from my follow-up, the other point that I thought was real interesting was some of your commentary on some of these really niche, Bruker-specific end markets or applications where you're benefiting from some of the more recent macro disruptions, security, defense, things like that. You called out a couple of those. I was just wondering, any way you could kind of aggregate that to what percent of your portfolio in industrial is exposed to some of those end markets where you could, you know, you're seeing a 20% growth now. You know, like you said, a bunch of those might be $50 million, $70 million of revenue.

Speaker #4: Okay. That's helpful. And then maybe from from my follow-up the the other point that I thought was really interesting was some of your commentary on some of these really niche BRUKER specific end markets or applications where you're benefiting from some of the more m+recent macro disruptions.

Speaker #4: Security defense things like that. You called out a couple of those. I was just wondering any way you could kind of aggregate that sort of what percent of your portfolio in industrial is exposed to to some of those some of those end markets where you could you know you're seeing a twenty percent growth now.

Speaker #4: You know, like you said, a bunch of those might be $50 million, $70 million of revenue. So on the one-off, it's things that can kinda slip under the radar, but you want them all together—that can be a nice little offset to, you know, what's going on in A&G and pharma.

Michael Ryskin: On the one-off, it's things that can kind of slip under the radar, but you lump them all together, that can be a nice little offset, to, you know, what's going on in A&G and pharma.

Frank Laukien: Yeah, it's well above 10%, right? We haven't done that. Yeah, a quick math would show that it's, you know, 10 greater than 12%. There are some others of these, you know, what Street loves to call them idiosyncratic growth drivers. Yes, we have them too. We will do that. It's clearly moving the needle. It's more than 10%, 12%, we'll aggregate that at some point. I don't have it at my fingertips.

Speaker #1: Yeah, it's well above ten percent, right? We haven't done that, but yeah, a quick math would show that it's, you know, ten—greater than twelve percent.

Speaker #1: And there are some others of these—you know, the Street loves to call them idiosyncratic growth drivers. Yes, we have them too. And we should, we will do that.

Speaker #1: so it's it's clearly quite a m it's moving the needle. It's it's it's more than ten twelve percent but we'll we'll aggregate that at some point.

Speaker #1: I don't have it at my fingertips.

Michael Ryskin: Thank you. Appreciate it.

Speaker #4: Thank you. Appreciate it.

Frank Laukien: Thank you.

Speaker #1: Thank you.

Operator 2: Next, we have a question from Puneet Souda with Leerink Partners. Please go ahead.

Operator: Next, we have a question from Puneet Souda with Leerink Partners. Please go ahead.

Speaker #3: a question from Puneet Sudha with Lerink Partners. Please go ahead.

Speaker #5: Hey. Hi Frank. thanks for the questions here. So first one actually maybe for Gerald on the margin side could you elaborate a little bit on on the second half ramp?

Puneet Souda: Hi, Frank. Thanks for the questions here. First one, actually maybe for Gerald. On the margin side, could you elaborate a little bit on the H2 ramp? It is, I mean, first of all, congrats on the quarter, but just it's, it is a steep still. Could you maybe talk a little bit about, you know, in terms of overall, is it just organic growth recovery, or are you expecting more from the cost initiatives? Maybe just give us the puts and takes given the ramp here.

Speaker #5: It is a I mean first of all congrats on the quarter but just it's it is a steep it's still could you maybe talk a little bit about you know in terms of overall is it just organic growth recovery?

Speaker #5: o+or are you expecting more from the cost initiatives? Maybe just give us the pu+puts and takes given the the ramp here.

Gerald Herman: Yeah. Hi, Puneet. It's Gerald. I think generally speaking, you know, we are expecting continued improvement in the overall revenue performance sequentially as we march through 2026. Our operating margin performance is very strongly driven by our cost saving actions, and you've already heard me describe those in my prepared remarks. We're expecting, you know, 300 to 350 basis points of organic improvement. That gets better as we move through the year starting in Q2 because of some of the headwinds that I mentioned on foreign exchange and tariffs, you know, get dissipated in Q2.

Speaker #2: Yeah. So hi Puneet Gerald. I I think generally speaking you know we are expecting continued improvement in the overall revenue performance sequentially as we march through twenty twenty-six.

Speaker #2: Our operating margin performance is very strongly driven by our cost-saving actions, and you've already heard me describe those in my prepared remarks.

Speaker #2: We're we're we're expecting you know three hundred three hundred and fifty basis points of organic improvement. That gets better as we move through the the year starting in the second quarter because of some of the headwinds that I mentioned on foreign exchange and tariffs you know get get dissipated in the second quarter.

Gerald Herman: More fundamentally, as we march through Q3 and Q4, we expect to see, you know, stronger operating margin performance, mostly driven by improved market conditions, as you just heard about our order performance and of course, the cost saving actions.

Speaker #2: But more fundamentally as we march through the third and the fourth quarter we expect to see you know stronger operating margin performance mostly driven by improved market conditions as you just heard about our order performance and of course the cost saving actions.

Puneet Souda: Got it.

Speaker #5: Got it. and Frank I'm rather cost saving actions this year Puneet yeah?

Frank Laukien: The bigger driver of the cost saving actions this year, Puneet. Yeah.

Puneet Souda: Got it. Maybe just Frank on spatial and AI, two areas I just want to touch on. Maybe on AI, can you provide what level of visibility you have from the customers, your confidence in continuing to grow that here in, you know, 2026 and then 2027, or is it just something that we should just observe the AI sort of the AI demand and the broader macro? On the spatial side, there was an instrumentation launch in the market. Just wondering how you're thinking about potentially freezing of the market this year and then longer term, you know, demand for NanoString products there. Thank you.

Speaker #4: Got it. so maybe just Frank on just on a s+a spatial and and AI two areas I just wanna touch on. maybe on AI can you p+provide y what level of visibility you have from the customers?

Speaker #4: Your confidence in continuing to grow that here in you know twenty-six and then twenty-seven or is it just something that we should just observe the A sort of the AI demand in the broader macro?

Speaker #4: and on the spatial side there was an instrumentation launch in the market. just wondering how are you thinking about potentially freezing of the market this year and then longer term you know demand for NanoString products there?

Speaker #4: Thank you.

Frank Laukien: The AI trend and that of course, always included logic and next generation logic chips and GPU and other, that's been strong all along. Advanced packaging continues to be very strong. It's also not only one company anymore. There are now some other companies that are also really benefiting from that. Really the big step up more recently, as you've all read, of course, and we're benefiting from that, is in high bandwidth memory. Of course, again, advanced packaging for including all of that. That's an additional boost. That looks quite durable. I mean, you know, I don't think that was a lucky quarter or 2 or 3. I think that looks like a very durable trend.

Speaker #1: Mm-hmm. Yeah. So the AI trend and that of course always and con included Logic and next generation Logic chips and GPU and other that that's been strong all along advanced packaging continues to be very strong.

Speaker #1: And and it's also not only one company anymore. There are now some other companies that are on our also really benefiting from that. And then really the big step up more recently as you've all read of course and we're benefiting from that is in high bandwidth memory.

Speaker #1: And of course again advanced packaging for including all of that. So that's an additional boost. That looks quite durable. I mean you know I I don't think that was a lucky quarter or two or three.

Speaker #1: I think that looks like a very durable trend and and we're we're built into that supply chain with our semiconductor metrology tools. And even our our eye tools that are now also north of twenty-five million a year.

Frank Laukien: We're built into that supply chain with our semiconductor metrology tools and even our RI tools that are now also north of $25 million a year. They go into the lithography, the extreme UV via the ZEISS ASML supply chain. There's an additional driver that's now, you know, becoming significant. These are strong trends. On the SciY side, the lab digitization, and not just for our instruments, for other instruments and just about all the data in the lab, and then the scientific software to do something with that, the fair reporting principles, these are very strong drivers, primarily in biopharma, but also in other industries and even some academic customers are benefiting from this, but it's primarily driven by biopharma. Again, a very high priority for all of them.

Speaker #1: They go into the lithography the extreme UV via that size ASML supply chain. So there's an additional driver that's now you know coming becoming significant.

Speaker #1: So these are strong trends. On the side why side the lab digitization and not just for our instruments for other instruments and and and and just about all the data in the lab.

Speaker #1: And then the scientific software to to do something with that. The fair reporting principles. These are very strong drivers primarily in biopharma but also in other industries and yeah even some academic customers are benefiting from those.

Speaker #1: But it's pr+primarily driven by biopharma again a very high priority for all of them. when you sometimes the street worries about well are they still buying instruments with all this AI?

Frank Laukien: When you the street worries about, well, are they still buying instruments with all this AI? Yes, they're buying instruments, but boy, are they investing in software and digitalization and projects to get their labs. Not only R&D, but QC and QC accompanying the transition to manufacturing and then scale-up. These are very strong trends. I think that business will continue to grow very rapidly. Spatial biology, it was remarkable to read that someone invented what we did a year ago, but anyway, not to be too cagey here. I think it's a confirmation of what we've been driving, this whole genome, whole human genome now, whole mouse genome trans-transcriptomics. We're still very much ahead of that with additional transcriptomes, we're actually delivering this stuff. This isn't just all promised for later this year.

Speaker #1: Yes they're buying instruments but boy are they investing in software and digitalization and projects to to to get their labs. Not only R&D but QC and QC accompanying the transition to m+manufacturing and then scale up.

Speaker #1: These are very strong trends. I think I think that business will continue to grow very rapidly. Spatial biology it was remarkable to read that someone invented what we did a year ago but anyway not to be too cagey here.

Speaker #1: I think I think it's a confirmation of what we've been driving this whole whole genome whole human genome now whole mouse genome trans transcriptomics but we're still very much ahead of that with additional transcriptomes with we're actually delivering this stuff.

Speaker #1: This isn't just all promised for later this year. We've been delivering it since last year. And very importantly we have the high plex or fairly high plex proteins which really makes pathway analysis so much more powerful.

Frank Laukien: We've been delivering it since last year. Very importantly, we have the HiPlex or fairly HiPlex proteins, which really makes pathway analysis so much more powerful. I feel really good about us leading the way and really benefiting from the new trends in spatial biology. Yeah, we'll leave it at that.

Speaker #1: So I feel really good about us leading the way and really benefiting from the the new trends in spatial biology. And so yeah let's we'll leave it at that.

Operator 2: Got it. Okay, thank you. The next question is from Tycho Peterson with Jefferies. Please go ahead.

Puneet Souda: Got it. Okay, thank you.

Speaker #4: Got it. Okay. Thank you.

Operator: The next question is from Tycho Peterson with Jefferies. Please go ahead.

Speaker #3: The next question is from Tico Peterson with Jeffries. Please go ahead.

Tycho Peterson: Hey, thanks. Frank, just to circle back on the semi comments. You had to push out $40 million last quarter. Did you recapture that in this quarter? You know, the original guide, I think, for the year in semi was low single digit. Maybe just given what you're seeing in the order book, talk a little bit about, you know, how you feel about that as a bogey for the year.

Speaker #6: Hey thanks. Frank just to circle back on the semi-comments. So you had a push out forty million last quarter. Did you recapture that in this quarter?

Speaker #6: And you know the original guide I think for the year-end semi was low single digit maybe just given what you're seeing in the order book talk a little bit about you know how you feel about that as a bogey for the year.

Frank Laukien: Don't have all the details at my fingertips. I think we recaptured only some of that in Q1. Some of that, you know, has to do also with customer site availability. As you know, in that industry, you deliver precisely when they want it, not when you have it ready. I don't think it's completely captured, but some of it went into Q1. I don't have a really crisp answer for you, but the answer is some, but not all.

Speaker #1: Don't have all the details of my fingertips. I think we recaptured only some of that in in Q one. some of that h you know has to do also with customer site availability and a as you know in that industry you deliver precisely when they want it not when you have it ready.

Speaker #1: So I don't think it's completely captured but some of it went into Q one. So I don't have a really crisp answer for you but s but the answer is some.

Tycho Peterson: For the full year, just is low single digits still what you're thinking on semi?

Speaker #1: Not not all.

Tycho Peterson: For the full year, just is low single digits still what you're thinking on semi?

Speaker #6: And for the full year just i+i+i+is low single digits still what you're thinking on semi?

Frank Laukien: On the revenue, I need some help from my team here. I don't have that at my fingertips.

Speaker #1: On the revenue I I need some help from my team here. I don't have that at my fingertips. We may be able to get back call.

Tycho Peterson: Okay.

Frank Laukien: We may be able to get back to you on that during the call. Someone's nodding, so the answer seems to be yes.

Speaker #1: I someone's nodding so the answer seems to be yes.

Operator 2: Yes.

Tycho Peterson: Yes.

Speaker #4: Yes.

Frank Laukien: Okay.

Tycho Peterson: Awesome. Maybe just US academic, Frank, your comment, you know, you kind of let it slip, you thought it could pick up in Q2, potentially. I am just curious what you are seeing out there. You know, how have expectations changed since February? What gives you that kind of confidence we will see it maybe sooner rather than later?

Speaker #1: Okay.

Speaker #6: Awesome. maybe just US academic Frank your comment you know you kinda let it slip. You thought it could pick up in two Q potentially.

Speaker #6: I'm just curious what you're seeing out there you know how have expectations changed since February? what gives you that kinda confidence? We'll we'll see it maybe sooner rather than later.

Frank Laukien: Well, it certainly seems to have bottomed or stabilized now. You know, we want more than that. Yes, in a few weeks ago, we got news that a number of our, you know, applicants, especially from NIH, got emails, not only did they have a good score, but that they would probably get funded. The checks did not come immediately or the money transfers, but now I read in some of the industry reports, right, from you and others, that also disbursements are now going up sequentially, at least. You know, we know what the budget is. We know how little has been spent so far, in a way. We're doing the math that everybody else is doing.

Speaker #1: Well let's see. It certainly seems to have bottomed or stabilized now you know. We we we want more than that. And yes in a few weeks ago we got no news that a lot of or a number of our you know applicants especially from NIH got got got emails not only did they have a good score but that they would probably get funded.

Speaker #1: The the checks did not come immediately or the the money transfers but now I read in some of the industry reports right? From you and others that also disbursements are now going up sequentially at least.

Speaker #1: And you know, we know what the budget is. We know how little has been spent so far, in a way. So we're doing the math that everybody else is doing.

Frank Laukien: When you go to conferences, it's, you know, people aren't bullish, but in US academic conferences, but they expect this to stabilize somewhat, and maybe also there's still political uncertainty, for sure. It's not, you know I expect it will pick up from, obviously, and I think we've bottomed. I'm somewhat optimistic that there will be a fair amount of funding between now and the end of the government fiscal year and the end of September, and perhaps that will relate to good Q2 and/or Q3 orders. Some of that will go into Q4 orders if money's released in Q3, calendar Q3. Some of that will go into Q4 orders.

Speaker #1: And and when you go to conferences it's you know there people aren't bullish but in US academic conferences but they expect this to stabilize somewhat and maybe also it's there's still political uncertainty for sure.

Speaker #1: And it's not you know I I I expect it will pick up from obviously and I think we've bottomed in I I'm somewhat optimistic that there will be a fair amount of funding between now and the end of the the end of the government fiscal year and the end of September.

Speaker #1: And perhaps that will relate to good Q two and or Q three orders and some of that will go into Q four orders if money's releasing Q three calendar Q three some of that will go into Q four orders.

Frank Laukien: We're, you know, not bullish on that, but we think it's stabilizing and poised to pick up a little bit. You know, we have many other areas of strength. For this year, we're not banking on that. Most of that will then go into next year's revenue for us anyway. We're expecting a gradual improvement and perhaps good orders in from US academia. Wouldn't that be nice in the H2 of this year? We're not building that into our guidance. We can deliver, we think, our guidance with or without that. If it comes, it's gonna be actually upside.

Speaker #1: So we're you know we're we're far from we're not bullish on that but we think it's stabilizing and and and poised to pick up a little bit.

Speaker #1: And you know we have many other areas of strength. So for this year we're not banking on on that. Most of that will then go into next year's revenue for us anyway.

Speaker #1: But we're we're expecting we're expecting a a gradual a an improvement and and perhaps good Q good orders in from US academia. Wouldn't that be nice in the second half of this year?

Speaker #1: But we're not building that into our guidance. So we can deliver we think our guidance with or without that. If it comes it's gonna be a actually upside.

Tycho Peterson: Okay. That's helpful. Just quickly for Gerald, can you give us a Q2 margin target? I don't think we got that. Should we assume B2B, you know, holds above 1 for Q2?

Speaker #6: Okay. Th+that's helpful. And then just quickly for Gerald can you give us a two Q margin target? I don't think we we got that.

Speaker #6: And should we assume B2B you know holds above one for two Q?

Gerald Herman: To answer your last question, yes. On your earlier question, we mentioned in my script the low to mid-single-digit organic revenue growth color for Q2 2026.

Speaker #2: to answer your last question yes. And on your earlier question we we mentioned in my script the low to mid single digits organic revenue growth color for the second quarter of twenty-six.

Frank Laukien: A significant margin pickup.

Speaker #1: And a significant margin pickup.

Gerald Herman: Yeah.

Frank Laukien: We didn't give any numbers, we didn't give any ranges. Yeah, that's right.

Speaker #6: Yeah. Margin definitely.

Speaker #1: But we didn't give any numbers. We didn't give any ranges. Yeah.

Speaker #2: That's right.

Tycho Peterson: Thank you.

Speaker #6: Thank you.

Gerald Herman: You're welcome.

Frank Laukien: Thank you, Tycho.

Speaker #2: You're welcome.

Speaker #1: Thank you Tico.

Operator 2: The next question is from Brandon Couillard with Wells Fargo. Please go ahead.

Operator: The next question is from Brandon Couillard with Wells Fargo. Please go ahead.

Speaker #3: The next question is from Brandon Coulliard with Wells Fargo. Please go ahead.

Brandon Couillard: Hey, thanks. Good morning, Frank. Be great to get some color on China. I think you mentioned revenues were down over 20%, but Gerald kind of alluded to a market improvement in orders. Just unpack what you're seeing across the end markets there and whether that's maybe starting to pick up a bit?

Speaker #6: Hey thanks. good morning Frank. it'd be great to get some color on China. I think you mentioned revenues were down over twenty percent. But Gerald kind of alluded to a market improvement in orders.

Speaker #6: Just unpack where you're seeing across the end markets there and whether that's maybe starting to pick up a bit.

Gerald Herman: Yeah, Brandon, it's Gerald. I'll just take that one quickly. Yeah, we did have a significant drop in overall revenue in Q1, but that's largely driven by weaker order demand in the prior year. We think that's just played out. With respect to the Q1 order performance in China, it was solid, I guess I'd say. Now, again, we're coming off of relatively softer comps, but still very encouraging in China to see some improvement on a quarter-order basis in Q1.

Speaker #2: Yeah Brandon it's Gerald. I'll just take that one quickly. Yeah we we did have a significant drop in overall revenue in the first quarter but that's largely driven by weaker order demand in the prior year.

Speaker #2: So we think that's just played out. With respect to the first quarter order performance in China it was it was solid. I guess I'd say now again we're we're o we're coming off of relatively softer comps.

Speaker #2: But still very encouraging in China to see some improvement order order basis. in the first quarter.

Brandon Couillard: Okay. Frank, care to touch on the Bruker BioSpin leadership given Falko's departure recently? He's been there a long time, and, you know, leadership at BSI has been immutable the past decade. Just curious if you have any more color. Thanks.

Speaker #6: Okay then Frank did you care to touch on the biostem leadership given Falco's departure recently? He's been there a long time and you know leadership at BSI's been immutable the past decade.

Speaker #6: just curious if you have any more color. Thanks.

Frank Laukien: Yeah. That's right. By the way, on China, I wanted to add because of some news yesterday. Some of the diagnostic businesses of other companies are under pressure, reimbursement or competitive or otherwise in China. Most of our diagnostics businesses, we have very, very little exposure there, which is primarily focused on Europe, the US, and, you know, the rest of the world, ex-China. That's a headwind we don't have for once. BioSpin leadership. Yeah, we, Falko indeed, has effectively left, but I think he has, you know, several months where that he, that he's still nominally with us.

Speaker #1: Yeah. that's right. So by by the way on China I I I wanted to add because of some news yesterday some of the diagnostic businesses of other companies are under pressure reimbursement or competitive or otherwise in China.

Speaker #1: Most of our diagnostics businesses so we have very very little exposure there which is primarily focused on Europe the US and you know the rest of the world ex China.

Speaker #1: So we don't have that's a headwind we don't have for once. biospin leadership yeah we we Falco indeed has effectively left but I think he has he has you know several months where that he that he's still fo nominally with us.

Frank Laukien: We're stepped with other people into the leadership, and I'm taking the opportunity to reorganize that a little bit, and including the group structures, and we'll probably give you a better idea of the new group structures by middle of July. That's, I think it's on a very good path, and I think you'll actually have a team with even more, you know, closeness to customers and very impactful, not just innovation for innovation's sake, but very impactful innovation, very customer-driven, cost-effective, but also, I think, very accountable. I'm actually pretty pleased in what we're doing at Bruker BioSpin, but more in July.

Speaker #1: But we're we're stepped with other people into the leadership. And I'm taking the opportunity to reorganize that a little bit. and including the group structures and we'll probably give you a better idea of the new group structures by middle of July.

Speaker #1: But that's I think it's on a very good path. And I think you'll actually have a a team with even more you know closeness to customers and and impact very impactful not just innovation or innovation's sake but very impactful innovation very very customer driven.

Speaker #1: cost effective but also I think very accountable. So I'm actually pretty pleased in what we're doing at biospin. But more in July.

Brandon Couillard: Thanks.

Speaker #6: Thanks.

Operator 2: The next question is from Doug Schenkel with Wolfe Research. Please go ahead.

Operator: The next question is from Doug Schenkel with Wolfe Research. Please go ahead.

Speaker #3: The next question is from Doug Schenkel with Wolf Research. Please go ahead.

Doug Schenkel: Good morning, and thank you for taking my questions. I want to follow up on one of Tycho's questions. In Q2, the year-over-year comparison is the most favorable of the year. In previous conversations with you, we got the sense that you were expecting better than low single-digit to mid-single-digit organic growth. With those two observations in mind, was there any pull forward of revenue into Q1 at the expense of Q2? Are you still expecting Q2 to be the highest organic growth quarter of the year?

Speaker #7: Good morning and thank you for taking my questions. I wanna follow up on one of Tico's questions. in Q two the year-over-year comparison is the most favorable of the year.

Speaker #7: In previous conversations with you we got the sense that you were expecting better than low single digit to mid single digit organic growth. So with those two observations in mind was there any pull forward of revenue into Q one at the expense of Q two?

Speaker #7: And are you still expecting Q two to be the highest organic growth quarter of the year?

Frank Laukien: Very discerning question. I don't think we had a lot of pull forward. I mean, maybe, you know, there's quarterly fluctuations, and some things move back and forth. That's why we didn't call it out. You know, maybe there was something like, you know, $8 to 10 million, and one could argue was pulled forward into Q1. But it's not particularly material, and it also tends to be, you know, what's typical between quarters. That's not an unusual number. To your second point, mathematically, yes, that looks to be correct, that as we see it right now, the cadence is indeed that the organic revenue growth in Q2 would probably be the highest of the year. We'll see about that, but that's how it lined up initially, and that's how it still looks. Correct.

Speaker #1: So very discerning question. I don't think we have a lot of pull forward. I mean maybe you know there's quarterly fluctuations and some things move back and forth.

Speaker #1: That's why we didn't call it out. But may you know maybe there was something like you know eight to ten million in one could argue was pull forward into Q one.

Speaker #1: but it's not particularly material. And it also tends to be you know what's what's typical between quarters. That's not an unusual number. And to your second point mathematically yes that looks like looks to be correct.

Speaker #1: That the as we see it right now the cadence is indeed that the organic revenue growth in Q two would probably be the highest of the year.

Speaker #1: We'll see about that. But that's outlined up initially and that's how it still looks correct. And yes some of that has to do with a weak with a weaker Q two of twenty-five as you exactly as you pinpointed.

Doug Schenkel: Okay.

Frank Laukien: some of that has to do with a weaker Q2 of 2025 as exactly as you pinpointed.

Doug Schenkel: Okay. Thank you for all that, Frank. I don't know if this is a Frank or a Gerald question. You know, I think, you know, some of the unfortunate developments in the world and the ongoing uncertainty, you know, I guess the silver lining is some of that leads to increased demand for Bruker products and services. On the flip side, you know, obviously there's an increase in freight and input costs. Keeping in mind you did not change your guidance for the year, the 250 to 300 basis points of margin expansion, does that suggest that you have fully captured and feel very comfortable that, you know, within that range, within that target, that you will be able to overcome any freight input or related costs?

Speaker #7: Okay. Thank you for all that Frank. And then I I I don't know if this is a Frank or a a Gerald's question. you know I I think you know some of the unfortunate developments in the world and the ongoing uncertainty you know I guess the good the silver lining is some of that leads to increased demand for Brooker products and services.

Speaker #7: On the flip side you know obviously there's an increase in freight and input costs. Keeping in mind you did not change your guidance for the year the two hundred and fifty to three hundred basis points of margin expansion.

Speaker #7: Does that suggest that you have fully captured and feel very comfortable that you know within that range within that target that you will be able to overcome any freight input or related costs?

Gerald Herman: Yeah. Doug, it's a fair question. The short answer is yes. We think that we have built into the guide the variability associated with related energy costs. We think moderate increases will be absorbed Or at the elements that we've already laid out. We're comfortable with where we are.

Speaker #2: Yeah Doug it's it's a fair question. Y the a the short answer is yes. We think that we have built into the guide the the the variability associated with related energy costs.

Speaker #2: And we think moderate increases will be absorbed through our our the elements that we've already laid out so. We're comfortable with where we are.

Frank Laukien: Okay. As you've noticed, we have not increased guidance. We have not taken the Q1 beat or part of it to guidance. We just want to have more confidence, even more confidence in our guidance and maybe want you all to have more confidence in our guidance. We are expanding our cost cutting, and it's of course intended to make sure that we continue on our significant margin ramp also into 2027. Well, some of that is also, I guess, a cushion in case. Or in what we now see there is increasing freight costs, there is increasing helium costs and things like that. Yeah, we think we've got it baked in, but that's also why we kept our guidance as is for now. Okay, understood.

Speaker #7: Okay. A+as you've noticed we have not increased guidance. You know we have not taken the Q one beat or part of it. To guidance.

Speaker #7: We just wanna have more confid even more confidence in our guidance and maybe want you all to have more confidence in our guidance. And you know we are we are expanding.

Speaker #7: our cost cutting and it's of course intended to make sure that we continue on our significant margin ramp also into twenty-seven. but you know some of that is also I guess a cushion in case well or in in in what we now see there is increasing freight costs.

Speaker #7: There is increasing helium costs and things like that. so yeah we think we've got it baked in. but that's also why we wh+why we kept our guidance as w as is for now.

Doug Schenkel: Okay, understood.

Frank Laukien: Thank you very much.

Doug Schenkel: Thank you very much.

Speaker #7: Okay. Understood. Thank you very much.

Operator 2: The next question is from Subbu Nambi with Guggenheim. Please go ahead.

Operator: The next question is from Subbu Nambi with Guggenheim. Please go ahead.

Speaker #3: Sure. The next question is from Subhu Nambi with Guggenheim. Please go ahead.

Subbu Nambi: Hey, guys. Thank you for taking my questions. Good morning.

Speaker #8: Hey guys. Thank you for taking my questions. Good morning. Do you know could you walk us through could you walk us through some of the other end market assumptions besides academia for second quarter and how that will step up for three Q and any percentage there?

Gerald Herman: Yeah, good morning.

Subbu Nambi: Gerald, could you walk us through some of the other end market assumptions besides academia for Q2, and how that will step up for Q3 and any percentages there?

Gerald Herman: You know, with respect to the guide, we don't provide a lot of detail on the end market elements, Subbu. What we can say is we are continuing to expect, you know, strength in acad gov outside the US. We're continuing to expect strength in certain industrial markets and in the, excuse me, in the semi space for sure. Those would be some of the core elements.

Speaker #2: Yeah w+with respect to the guide we we don't provide a lot of detail on the end market elements Subhu. what we can say is we are continuing to expect you know strength in Akagov outside the US.

Speaker #2: We're continuing to expect expect strength in certain industrial markets and in the excuse me in the semi space for sure. Those would be some of the core elements.

Frank Laukien: I would add to that I think the clinical microbiology and molecular diagnostics business will do well. Their placements, if you recall, for the Bruker ELITech molecular diagnostics last year were something like more than 30% higher than our business plan, which bodes well for consumables pull through the following year. Q1 again has been just excellent with placements, something like 40% ahead of plan. That doesn't show up in the P&L, right? Initially, that's a CapEx, if you like.

Speaker #2: but.

Speaker #1: I would add to that that I think the clinical microbiology and molecular diagnostics business will do well. Their placements if you recall for the Brooker Elitech molecular diagnostics last year were something like more than thirty percent higher than our business plan which bodes well for consumables pull through the following year.

Speaker #1: And Q one again has been just e+excellent with with placements. Something like forty percent ahead of plan. That doesn't show up in the P&L right?

Speaker #1: Initially that's a CapEx if you like. 'Cause these are reagent rentals. but it but it very much then adds has a buildup of consumables that comes after it.

Frank Laukien: because these are reagent rentals. It very much then has a buildup of consumables that comes after it. Those are some of the things that you will wanna keep an eye on, plus the other things that we discussed.

Speaker #1: So those are some of the things that you will wanna keep an eye on. Plus the other things that we discussed.

Subbu Nambi: That's helpful. My follow-up, sort of follow-up to Doug's question. From the Middle East conflict, would you expect additional tailwinds to the defense business? At what point does that become an upside to the current guide based on what your starting assumptions are that you had at the beginning of this year?

Speaker #8: that's helpful in my follow-up. sort of follow-up to Doug's question. From the Middle East conflict would you expect additional tailwinds to the defense business?

Speaker #8: And at what point does that become an upside to the current guide based on what you're starting assumptions are at that you had at the beginning of this year?

Frank Laukien: Yeah. Remember, our stuff doesn't shoot, it measures. Nonetheless, detection, of course, is important, and people are concerned about things that, you know, happen behind the lines and all. Yeah, I mean, it's already kind, obviously, because of Ukraine and, but not only the country of Ukraine, but many other European countries thinking, Hmm, we don't want to become the next Ukraine. They are investing in detection capabilities, and our detection business over 2 or 3 years has essentially doubled to where it's now meaningful. Yeah, that has helped the order trends, and I expect that to continue. I don't think it will affect guidance this year. It's just one of the good guys on our list of things, you know, that are helping us meet and perhaps exceed guidance.

Speaker #1: Yeah remember our stuff doesn't shoot. It measures. so it's but no+nonetheless detection of course is important and people are concerned about things that you know happen behind the lines and all.

Speaker #1: so yeah I mean it's already kind of obviously you because of Ukraine and but not only the country of Ukraine but many other European countries thinking we don't wanna become the next Ukraine.

Speaker #1: So they they are investing in detection capabilities and our detection business over two or three years has essentially doubled to where it's now meaningful.

Speaker #2: Mm-hmm.

Speaker #1: and yeah that has helped the order trends. And I I expect that to continue I don't think it will affect guidance this year. It's just one of the it's just one of the good guys on our list of things.

Speaker #1: You know that are helping us meet and perhaps exceed guidance. I don't think it's gonna make a if there are bigger orders they tend to be long term.

Frank Laukien: I don't think it's gonna. If there are bigger orders, they tend to be long term. If you get another big order at some point this year, it's gonna go into 2027 and sometimes 2027, 2028 revenue. These things are not turning quickly. Hopefully, that helps.

Speaker #1: If you get another big order at some point this year it's gonna go into twenty-seven and sometimes twenty-seven twenty-eight. revenue these things are not turning quickly.

Speaker #2: Okay.

Speaker #1: Hopefully that helps.

Subbu Nambi: Thank you.

Gerald Herman: Sure.

Speaker #2: sure.

Operator 2: The next person is on the, in the queue is Casey Woodring with J.P. Morgan. Please go ahead.

Operator: The next person is on the, in the queue is Casey Woodring with J.P. Morgan. Please go ahead.

Speaker #3: The next person i on the in the Q is Casey Woodring with JP Morgan. Please go ahead.

Casey Woodring: Great. Thank you for taking our questions. I wanted to follow up on some of the margin ramp questions and just ask about mix dynamics. Curious to hear what mix impact was on the Q1 margin, you know, how much of a mix tailwind do you need to see to hit that H2 margin step up and your visibility into that? Just to follow up to that piece, you know, I wanted to just clarify on the cost outs, is the $140 million in expected annualized savings, is that expected to hit by year-end this year? Thanks.

Speaker #9: Great. Thank you for taking our questions. I wanted to follow up on some of the margin ramp questions and just ask about mixed dynamics.

Speaker #9: curious to hear what mixed impact was on the one Q margin. And then you know how much of a mixed tailwind do you need to see to hit that second half margin step up?

Speaker #9: And your visibility into that? And then just to follow up to that piece you know I wanted to just clarify on the cost outs.

Speaker #9: Is the hundred and forty million an expected annualized savings? Is that expected to hit by year end this year? Thanks.

Gerald Herman: Okay, I'll start in the reverse order. The $140 million of annualized savings, what you're going to see is those pieces will be fed into the quarters as we move forward. You will not see the full $140 million for sure in the P&L by the end of the year. As we march into 2027, you'll start to see the impact of that for sure. With respect to the mix question, I would say, you know, just generally in Q1, we did have somewhat of unfavorable mix in the quarter, mostly driven by the gigahertz class item that was not in Q1 of 2026, but was in Q1 of 2025. Our expectation is that, you know, the mix situation will actually improve as we march through the rest of 2026.

Speaker #2: Okay I'll start in the reverse order. On on the hundred and forty million dollars of annualized savings in what you're going to see is those pieces will be fed into the quarters as we move forward.

Speaker #2: So you will not see the full hundred and forty million for sure in the P&L by the end of the year. But as we march into twenty-seven you'll start to see the impact of that for sure.

Speaker #2: with respect to the mixed question I would say you know just generally i+in Q one we did have somewhat of unfavorable mix in the quarter.

Speaker #2: Mostly driven by the gigahertz class item that was n was not in Q one of twenty-six but was in Q one of twenty-five. Our expectation is that you know the mix situation will actually improve as we march through the rest of twenty twenty-six.

Gerald Herman: We've had a couple of quarters of more challenging mix issues, and we're expecting to see that improve as we move through the rest of the year. I think I said earlier, I think with respect to the operating margin performance of the company, we've taken significant cost saving actions, which are basically gonna secure, we think, the operating margin performance of the business, not only in 2026 but beyond that. We expect to see that ramp of operating margin improvement as we step sequentially through Q2, Q3, and Q4. Hopefully, that's helpful.

Speaker #2: we've had a couple of quarters of of more challenging mix issues. And we're expecting to see that improve as we move through the rest of the the year.

Speaker #2: And then I think I I I I said earlier I think with respect to the operating margin performance of the company we're doing we've taken significant cost saving actions which are basically gonna secure we think the operating margin performance of the of the business not only in twenty-six but beyond that.

Speaker #2: And we expect to see those that ramp of operating margin improvement as we step sequentially through the the second third and fourth quarters. Hopefully that's helpful.

Casey Woodring: Yeah, no. Thank you for that. Just a quick follow-up on BEST. You talked about the major orders coming through on the MRI side, up to $600 million now. Can you talk a little bit about how incremental those orders really are? I believe some of those are with existing customers, so would just be curious to hear any thoughts on that. Would also be curious to hear what the lead time is for those orders and, you know, if it's safe to assume those would start to contribute maybe in H1 2027, or if there's any, you know, possibility that happens in 2026. Thank you.

Speaker #9: Yeah no. Thank you for that. and then just a quick follow-up. on best you talked about the major orders coming through on the MRI side up to six hundred million dollars now.

Speaker #9: Can you talk a little bit about how incremental those orders really are? I believe some of those are with existing customers. So it'd just be curious to hear any thoughts on that.

Speaker #9: And would also be curious to hear what the lead time is for those orders. And it you know if it's safe to assume those would start to contribute maybe in the first half of twenty-seven.

Speaker #9: or if there's any you know possibility that happens in twenty-six. Thank you.

Frank Laukien: They're not incremental. They're not all incremental, after maybe a period of uncertainty and some organic decline, moderate organic decline, Best being a headwind last year, we think this year it's already going to be a tailwind. Sorry. Some of these orders are kicking in this year. Some of them are 2, some of them are 5 or 7-year orders, so it's pretty long term. It bodes well for continued moderate organic growth in the Best business, I would say, compared to organic decline last year. Now that a lot of these things, these major orders with the major MRI companies of the world are settled for multiple years, we think what's built in there is a healthy single-digit organic growth.

Speaker #1: S+so they're not all they're not incremental. They're not all incremental. But they offer maybe a period of uncertainty and and and and some organic decline moderate organic decline it being best being a headwind last year we think this year it's already sorry it's already gonna be a tailwind.

Speaker #1: Sorry. Some of these orders are kicking in this year. They some of them are two. Some of them are five or seven year orders.

Speaker #1: So it's pretty long term. it bodes well for continued moderate organic growth in the best business I would say compared to organic decline last year.

Speaker #1: And now that a lot of these things these major orders with the major MRI companies of the world are settled for multiple years we think what's built in there is a is is a healthy single digit organic growth.

Frank Laukien: That stabilizes, that turns it around. No, it certainly isn't all incremental. Some of these fusion orders at RI are incremental. Mostly in 2027, 2028 revenue performance. Some of this stuff here is just reversing the trend and setting up a very stable, healthy trend, we think, for multiple years in BEST.

Speaker #1: And so it's b that that stabilizes that turns it around. But no it certainly i+it isn't all incremental. Some of these fusion orders that are I are incremental.

Speaker #1: some of this stu and and mostly in twenty-seven twenty-eight revenue performance and some of this stuff here is just reversing the trend and setting up a very stable healthy trend we think for multiple years in best.

Casey Woodring: Great. Thank you.

Speaker #9: Great. Thank you.

Operator 2: The next question is from Patrick Donnelly with Citi. Please go ahead.

Operator: The next question is from Patrick Donnelly with Citi. Please go ahead.

Speaker #3: The next question is from Patrick Donnelly with Citi. Please go ahead.

Patrick Donnelly: Hey, guys. Thank you for taking the questions.

Speaker #10: Hey guys, thank you for taking the questions. Frank, maybe one for you on Akagov. Certainly appreciate the commentary on the US, and a little bit on China.

Gerald Herman: Hi.

Patrick Donnelly: Maybe one for you on Accugov. Certainly appreciate the commentary on the US and a little bit on China. Can you talk about what you're seeing in Europe? You know, we've seen some mixed data points from others on that region for Accugov. Just curious what you guys are seeing and the expectations going forward there.

Speaker #10: Can you talk about what you're seeing in Europe? You know we've seen some mixed data points from others on that region for Akagov. Just curious what you guys are seeing and and the expectations going forward there.

Frank Laukien: Oh, yeah. I wish I had a better crystal ball, Patrick. I, you know, 1 quarter for as you know, some of this always fluctuations in that. It was good in Q1, but I expect, you know, single-digit. I don't even wanna specify whether it's low, mid, or high. I expect probably mid to high single-digit organic growth in that also in Europe, given the strength. Not so much necessarily all the budgets, 'cause there's some defense pull on that as well, right? The budgets are not only going up in Europe for research, but funding for our equipment for, you know, proteomics and now proteomics 2.0, the age of the proteoform, the intact functional proteins and leadership in spatial biology, clear technological leadership and applications leadership in spatial biology.

Speaker #11: yeah. I wish I had a better crystal ball Patrick. I I you know one quarter free as you know some of this always fluctuations in that.

Speaker #11: So w+it was good in Q one but I I expect you know single digit. I don't even wanna specify whether it's low mid or high.

Speaker #11: I expect probably mid to high single digit. Organic growth in that also in Europe. Given the strength not so much g necessarily all the budgets.

Speaker #11: 'Cause there's some defense for pull on that as well right? Not budgets are not only going up in Europe for research. But funding for our equipment for you know proteomics and our proteomics two dot O the the age of the proteoform the intact functional proteins and leadership in spatial biology clear technological leadership and applications leadership in spatial biology and you know a recovery of NMR I think is all bodes well for us to grow ahead of the general funding environment.

Frank Laukien: You know, a recovery of NMR, I think is all bodes well for us to grow ahead of the general funding environment. If I had to put a number on there, I think it's mid to high single-digit growth opportunity, organic growth opportunity, but there will be quarterly fluctuations.

Speaker #11: So if I had to put a number on there I think it's mid to high single digit growth opportunity organic growth opportunity but there will be quarterly fluctuations.

Patrick Donnelly: Understood. Thanks. Gerald, I'm gonna pin you down a little bit on some of the Q2 moving pieces. I just wanted to make sure, is there an ultra-high field in the quarter? I want to follow up on Tycho's margin question. If you could just help us out a little bit on the margins. I think previously, you know, folks were thinking mid-teens for Q2. The earnings number, what that might shake out as would be appreciated.

Speaker #10: Understood. Thanks. And then Gerald I saw I'm gonna pin you down a little bit on on some of the two Q moving pieces. I just wanted to make sure is th is there an ultra high field in the quarter?

Speaker #10: And then I wanted to follow up on Tycho's margin question. If you could just help us out a little bit on the margins. I think previously you know folks are thinking mid-teens for two Q.

Speaker #10: And then the earnings number what that might might shake out as would would be appreciated.

Gerald Herman: Yeah, we can go through some of that in more detail separately. What I'd say is, first of all, we don't expect a gigahertz class system in Q2 of 2026. I think that will have some impact related to, you know, your modeling. I think generally speaking, as I said earlier, we are expecting a step up in operating margin performance, fairly significantly in Q2.

Speaker #2: Yeah. We can go through some of that in more detail separately. But what I what I'd say is first of all we don't expect a gigahertz class system in Q two of twenty-six.

Speaker #2: So I think that will have some impact related to you know your modeling. I think generally speaking as I said earlier we are expecting a step up in operating margin performance fairly significantly in the second quarter.

Frank Laukien: Sequentially.

Gerald Herman: Sequentially-

Speaker #2: And

Frank Laukien: Yeah

Gerald Herman: from Q1.

Speaker #1: Sequentially.

Frank Laukien: Yeah.

Speaker #2: Sequentially from Q one.

Gerald Herman: Certainly, on a year-over-year basis as well. I think just from an EPS perspective, we expect to do better in the Q2 than we did sequentially from the Q1 of 2026. We can talk about more of the gory details, if you'd like, later.

Speaker #1: Yeah.

Speaker #2: certainly on a year over year basis as well. And and I think just from an EPS perspective we expect to do better. In the second quarter than we did sequentially in the fir from the first quarter of twenty-six.

Speaker #2: We can talk about more of the gory details if you'd like later.

Patrick Donnelly: Understood. Thanks.

Speaker #10: Understood. Thanks.

Frank Laukien: One last question, we probably should wrap it up.

Speaker #1: One last questions. We probably should wrap it up.

Gerald Herman: Yeah.

Frank Laukien: It's about 9:00 AM 'cause there's another company starting their earnings call, and we wanna be respectful of that.

Speaker #2: Yeah.

Speaker #1: Just about nine o'clock 'cause there's another company starting their earnings call and we wanna be respectful of that.

Operator 2: Yes. This concludes our question and answer session. I would like to turn the conference back over to Joe Kostka for any closing remarks.

Operator: Yes. This concludes our question and answer session. I would like to turn the conference back over to Joe Kostka for any closing remarks.

Speaker #3: Yes. So this concludes our question and answer session. I would like to turn the conference back over to Joe Kostka for any closing remarks.

Joe Kostka: Thank you for joining us today. Bruker's leadership team looks forward to meeting with you at an event or speaking with you directly during Q2. Feel free to reach out to me to arrange any follow-up. Have a good day. Thank you.

Speaker #2: Thank you for joining us today. BRUKER's leadership team looks forward to meeting with you at an event or speaking with you directly during the second quarter.

Speaker #2: Feel free to reach out to me to arrange any follow-up. Have a good day. Thank you.

Operator 2: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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Q1 2026 Bruker Corp Earnings Call

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Q1 2026 Bruker Corp Earnings Call

Wednesday, May 6th, 2026 at 12:00 PM

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