Q2 2026 Bruker Corp Earnings Call

August 4, 2026

Operator: Good day, welcome to the Bruker Corporation Q2 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 zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to hand the call over to Joe Kostka, Director of Investor Relations. Please go ahead.

Speaker #1: Good day and welcome to the Bruker Corporation second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal your conference specialist by pressing the star key followed by zero.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad.

Speaker #1: To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to hand the call over to Joe Kostka, Director of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Good morning. I would like to welcome everyone to BRUKER CORPORATION's 2nd Quarter 2026 earnings conference call. My name is Joe Kostka, and I am the Director of BRUKER Investor Relations.

Joe Kostka: Good morning. I would like to welcome everyone to Bruker Corporation's Q2 2026 earnings conference call. My name is Joe Kostka, I am the Director of Bruker Investor Relations. Joining me on today's call are our President and CEO, Frank Laukien, our EVP and CFO, Gerald Herman. 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 non-GAAP to GAAP financial measures are included in our earnings release 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 two of the presentation.

Speaker #2: Joining me on today's call are our President and CEO, Frank Laukien, and our EVP and CFO, Gerald Herman. 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 non-GAAP to 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 2 of the presentation. During this conference call, we will, or may, make forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties.

Joe Kostka: During this conference call, we will or may make forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to our recent acquisitions, geopolitical risks, wars or blockades, market demands, 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. Please note that the following information is based on current business conditions and on our outlook as of today, 4 August 2026.

Speaker #2: 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.

Speaker #2: 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 on our outlook as of today, August 4, 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 3rd Quarter 2026 financial results expected in early November 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 Q3 2026 financial results, expected in early November 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 then cover the financials for Q2 2026 in more detail and comment on our full year 2026 financial outlook. I'd like to turn the call over to Bruker 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 second quarter of 2026 in more detail and comment on our full-year 2026 financial outlook. Now, I'd like to turn the call over to Bruker CEO, Frank Laukien.

Speaker #3: Thanks, Joe. Good morning, everyone, and thank you for joining us on today's second quarter 2026 earnings call. We are pleased that Bruker has returned to organic revenue growth in the second quarter.

Frank Laukien: Thanks, Joe. Good morning, everyone, and thank you for joining us on today's Q2 2026 earnings call. We are pleased that Bruker has returned to organic revenue growth in Q2. Our focus on cost reductions and profitability improvements resulted in solid margin expansion and non-GAAP EPS growth. Demand for our differentiated products and solutions improved further as our Bruker Scientific Instruments segment achieved 10% organic bookings growth year-over-year, a fourth consecutive quarter with a Bruker Scientific Instruments book-to-bill ratio above 1.0. Organic bookings in biopharma grew more than 20% in Q2, driven by demand for our NMR, X-ray, and mass spectrometry solutions. In our academic and medical research business, bookings in Europe and China were up strongly. However, US academic orders still remained weak in Q2.

Speaker #3: And that our focus on cost reductions and profitability improvements resulted in solid margin expansion and non-GAAP EPS growth. Demand for our differentiated products and solutions improved further, as our scientific instruments segment achieved 10% organic bookings growth year over year, a 4th consecutive quarter with a scientific instruments book-to-bill ratio above 1.0.

Speaker #3: Organic bookings in biopharma grew more than 20% in the second quarter, driven by demand for our NMR, X-ray, and mass spectrometry solutions. In our academic and medical research business, bookings in Europe and China were up strongly.

Speaker #3: However, U.S. academic order still remained weak in Q2. We saw notable Q2 order strength in our deep tech semiconductor tools and energy research technologies.

Frank Laukien: We saw notable Q2 order strength in our deep tech semiconductor tools and energy research technologies, with both at over 50% organic order growth year-over-year. In semiconductor metrology, we sell robust and innovative metrology equipment for chip manufacturers with significant demand increases for high bandwidth memory and advanced packaging driven by AI scaling. In energy research, we provide unique tools and modules for fusion energy development and high-energy physics research. These proprietary deep tech capabilities, which also include our security detection systems, are valuable to have in the portfolio as life science research demand recovers gradually. These deep tech tools tend to have longer delivery times, in some cases of nine to 24 months, determined by facility readiness, for example, for a new logic or memory chip wafer fabs or for large-scale fusion development projects.

Speaker #3: With both at over 50% organic order growth year-over-year. In semiconductor metrology, we sell robust and innovative metrology equipment for chip manufacturers, with significant demand increases for high-bandwidth memory and advanced packaging driven by AI scaling.

Speaker #3: In energy research, we provide unique tools and modules for fusion energy development and high-energy physics research. These proprietary deep tech capabilities, which also include our secure security detection systems, are valuable to have in the portfolio as life science research demand recovers gradually.

Speaker #3: These deep, deep tech tools tend to have longer delivery times—in some cases, 9 to 24 months—determined by facility readiness. For example, this applies to new logic or memory chip wafer fabs, or for large-scale fusion development projects.

Speaker #3: As a result, some of our strong deep tech bookings will benefit our Q4 and then 2027 and even the outer years. We are continuing to take costs out to drive margin expansion and double-digit EPS growth this year and also again in 2027.

Frank Laukien: As a result, some of our strong deep tech bookings will benefit our Q4 and then 2027 and even the outer years. We are continuing to take costs out to drive margin expansion and double-digit EPS growth this year, and also again in 2027. We have made good progress in Q2, realizing more cumulative cost reductions, and we are well on track for our stated goal of delivering $140 million of annualized cost savings in 2026. I would like to thank our teams for their very important efforts in this area. Effective as of 1 July of this year, Bruker has adopted a new operating structure that combines our Bruker BioSpin, Bruker Daltonics, and Bruker Optics divisions into a new Bruker Biosystems Group, led by Group President Juergen Srega.

Speaker #3: We have made good progress in the 2nd Quarter, realizing more cumulative cost reductions and we are well on track for our stated goal of delivering 140 million of annualized cost savings in 2026.

Speaker #3: I would like to thank our teams for their very important efforts in this area. Effective as of July 1 of this year, Bruker has adopted a new operating structure that combines our BioSpin, Daltonics, and Optics divisions into a new Bruker BioSystems Group, led by Group President Jürgen Srega.

Speaker #3: The newly merged biosystems group addresses the growing need for scientific integration in the post-genomic era which combines complementary life science research workflows into more comprehensive disease biology insights.

Frank Laukien: The newly merged Biosystems Group addresses the growing need for scientific integration in the post-genomic era, which combines complementary life science research workflows into more comprehensive disease biology insights. Across post-genomic drug discovery, multi-omics, and applied markets, our customers connect structural, molecular, and cellular information to understand complex systems biology or advanced materials research. The Biosystems Group brings together NMR, mass spectrometry, FTIR, Raman, preclinical automation software, and applications expertise in any of these areas for connected workflows from research to quality control. Examples include metabolomics, RNA characterization, or protein analysis, where NMR and mass spectrometry provide important complementary insights. Or, as another example, in battery research development and battery life cycle QC, where NMR and FTIR characterize electrolytes, electrodes, and chemistry.

Speaker #3: Across post-genomic drug discovery, multiomics, and applied markets, our customers connect structural molecular and cellular information to understand complex systems biology or advanced materials research.

Speaker #3: The biosystems group brings together NMR, mass spectrometry, FTIR, Raman, preclinical automation software, and applications expertise in any of these areas for connected workflows from research to quality control.

Speaker #3: Examples include metabolomics, RNA characterization or protein analysis, where NMR and mass spectrometry provide important complementary insights, or as another example, in battery research, development, and battery life cycle QC, where NMR and FTIR characterize electrolytes, electrodes, and chemistry.

Speaker #3: In addition, Bruker Microbiology and Infection Diagnostics, which we sometimes abbreviate as BMID, previously a division within the CALID group, has now been established as a group under the leadership of Dr. Wolfgang Pusch.

Frank Laukien: In addition, Bruker Microbiology and Infection Diagnostics, which we sometimes abbreviate as BMID, previously a division within the CALID Group, has now been established as a group under the leadership of Dr. Wolfgang Pusch. This BMID group has a fast-growing microbiology and infection diagnostics portfolio from microbial identification, molecular diagnostics, hospital hygiene, to emerging antimicrobial resistance testing and next-generation sequencing for sepsis and reflex testing. This modified group structure aligns Bruker more closely with markets and our customers. By organizing around connected workflows, we strengthen group-level agility and our ability to prioritize investments that deliver innovation with the most impact. Following these changes, Bruker now operates in four groups: Bruker Biosystems, Bruker Nano, BMID or Bruker Microbiology and Infection Diagnostics, and Bruker Energy & Supercon Technologies or BEST. This new structure is expected to drive an additional $20 million of cost reductions in fiscal year 2027.

Speaker #3: This BMID group has a fast-growing microbiology and infection diagnostics portfolio, from microbial identification, molecular diagnostics, hospital hygiene, to emerging antimicrobial resistance testing and next-generation sequencing for sepsis and reflux testing.

Speaker #3: This modified group structure aligns Bruker more closely with markets and our customers. By organizing around connected workflows, we strengthen group-level agility and our ability to prioritize investments that deliver innovation with the most impact.

Speaker #3: Following these changes, BRUKER now operates in 4 groups. BRUKER biosystems, BRUKER Nano, BMID, or BRUKER microbiology and infection diagnostics, and BRUKER energy and supercon technologies, or BEST.

Speaker #3: This new structure is expected to drive an additional 20 million of cost reductions in fiscal year 2027. All right. Onto the quarter. Let's turn to slide 4 now for the P&L performance of the 2nd Quarter.

Frank Laukien: All right, on to the quarter. Let's turn to slide four now for the P&L performance of the Q2. Our Q2 2026 reported revenues of $839 million increased 5.2% year-over-year, with organic growth of 2.8%, or 3.4% organic growth excluding tariff refunds in the Q2. The revenue contribution from M&A was 1.5%, and constant exchange rate or CER growth was 4.3%. The 0.9% FX revenue tailwind was actually 50 bps lower than originally expected. BSI segment revenues were up 2.3% organically, while BEST achieved organic revenue growth of 8.9% net of intercompany eliminations. Our Q2 2026 non-GAAP gross and operating margins were 52.1% and 14.1%, respectively, both up significantly year-over-year, albeit in comparison to a weak Q2 2025, and including a net U.S. tariff refund benefit that Gerald will describe in a moment.

Speaker #3: Our Q2 2026 reported revenues of 839 million increased 5.2% year over year, with organic growth of 2.8%, or 3.4% organic growth, excluding tariff refunds in the 2nd Quarter.

Speaker #3: The revenue contribution from M&A was 1.5% and constant exchange rate, or CER, growth was 4.3%. And the 0.9% FX revenue tailwind was actually 50 bips lower than originally, expected.

Speaker #3: BSI segment revenues were up 2.3% organically, while BEST achieved organic revenue growth of 8.9%. Net of intercompany eliminations. Our 2nd Quarter 2026 non-GAAP growth and operating margins were 52.1 and 14.1%, respectively, both up significantly year over year, albeit in comparison to a weak 2nd Quarter 2025.

Speaker #3: And including a net US tariff refund benefit that Gerald will describe in a moment. Our 2nd Quarter 2026 diluted non-GAAP EPS was 49 cents, up 53%, from 32 cents in the 2nd Quarter of 2025.

Frank Laukien: Our Q2 2026 diluted non-GAAP EPS was $0.49, up 53% from $0.32 in the Q2 2025. Moving to slide five, H1 2026 revenues increased by 3.9% to $1.66 billion. H1 organic revenue was still a decline of 0.8%, consisting of a 1.4% organic decline in Scientific Instruments and 6.1% organic growth at BEST, net of intercompany eliminations. Our H1 2026 non-GAAP gross margin, operating margin, and EPS were all up year-over-year, and their performance is summarized on slide five. Gerald will go into more detail on the drivers shortly. Please turn to slides six and seven, where we highlight the H1 2026 performance of our three Scientific Instruments group and of BEST, all in constant currency and year-over-year basis. In the H1 2026, the BioSpin Group revenue was $393 million, down mid-single digits percentage year-over-year.

Speaker #3: Moving to slide 5, H1 2026 revenues increased by 3.9% to 1.66 billion, first half organic revenue was still a decline of 0.8%, consisting of a 1.4% organic decline in scientific instruments and 6.1% organic growth at BEST, net of intercompany eliminations.

Speaker #3: Our first half 2026 non-GAAP gross margin, operating margin, and EPS were all up year over year, and their performance is summarized on slide 5.

Speaker #3: Gerald will go into more detail on the drivers shortly. Please turn to slides 6 and 7, where we show the 2026 performance of our three Scientific Instruments groups and of BEST, all in constant currency and on a year-over-year basis.

Speaker #3: In the first half of 2026, the biospin group grew revenue was 393 million, down mid-single down mid-single digits percentage year over year. Biospin saw strong revenue growth in hospital clinical and biopharma, offset by weakness in China ACAGAV, who testing, and automation.

Frank Laukien: Biospin saw strong revenue growth in hospital, clinical, and biopharma, offset by weakness in China, ACA Gov, food testing, and automation. NMR preclinical and preclinical imaging had robust order growth, both up double digits in H1 year-over-year. For H1 2026, CALID Group revenue of $627 million increased in the mid-single digits percentage, driven by mass spectrometry, including the TOFWERK acquisition. CALID saw strength in biopharma, security detection, and European ACA Gov, partially offset by weaker revenues in the US. H1 revenue growth in molecular diagnostics was solid, while microbiology was roughly flat. Please turn to slide seven now. H1 2026 Bruker Nano revenue was $507 million, with a low single-digits percentage decline. Nano saw weakness in ACA Gov and industrial markets, while weakness in US ACA Gov funding continued to impact spatial biology.

Speaker #3: NMR preclinical and preclinical imaging had robust order growth, both up double digits in the first half year over year. For the first half of 2026, Kali group revenue of 627 million increased in the mid-single digits percentage driven by mass spectrometry, including the tough work acquisition.

Speaker #3: Kali saw strength in biopharma, security detection, and European ACAGAV, partially offset by weaker revenues in the US. First half revenue growth in molecular diagnostics was solid, while microbiology was roughly flat.

Speaker #3: Please turn to slide 7 now. First half 2026, BRUKER Nano revenue was 507 million, with a low single digits percentage decline. Nano saw weakness in ACAGAV and industrial markers, while weakness in US ACAGAV funding continued to impact spatial biology.

Speaker #3: This was largely offset by robust strength in semiconductor metrology, due to AI-driven orders for memory and advanced packaging metrology tools. Finally, the first half of 2026, BEST revenues were up 6%, net of intercompany eliminations, with strong growth in the superconductor business and solid revenue growth at research instruments or RI.

Frank Laukien: This was largely offset by robust strength in semiconductor metrology due to AI-driven orders for memory and advanced packaging metrology tools. Finally, H1 2026 BEST revenues were up 6% net of intercompany eliminations, with strong growth in the superconductor business and solid revenue growth at Research Instruments, or RI. In H1, RI secured very strong multi-year orders for fusion energy and high-energy physics technologies, and I'll come back to that in a moment. Moving to slide eight and nine. On slide eight, we highlight our semiconductor metrology Nano tools, which are now clearly moving the needle for Bruker. I won't go through the technical details but invite you to read those at your convenience. H1 2026 organic order growth was greater than 30%, and H1 2026 organic revenue growth was greater than 15%, obviously somewhat lagging behind order growth.

Speaker #3: In the first half, RI secured very strong multi-year orders for fusion energy and high-energy physics technologies. And I'll come back to that in a moment.

Speaker #3: So moving to slide 8 and 9. On slide 8, we highlight our semiconductor metrology nano tools, which are now clearly moving the needle for BRUKER.

Speaker #3: In I won't go through the technical details, but invite you to read those at your convenience. The first half 2026 organic order growth was greater than 30%, and the first half 2026 organic revenue growth was greater than 15%, obviously somewhat lagging behind order growth.

Speaker #3: And this business is very profitable. It has about a 30% EBIT margin. Longer lead times in this business, which can be 9 to 24 months, can result in revenue lagging order growth by several quarters.

Frank Laukien: This business is very profitable. It has about a 30% EBIT margin. Longer lead times in this business, which can be 9 to 24 months, can result in revenue lagging order growth by several quarters. If you go to slide nine, we touch on our other deep tech areas, our security detection on the left and energy research on the right, and those two businesses also seeing considerable strength. H1 detection orders and revenue were both up approximately 20% year-over-year, whereas, as I just mentioned, our H1 Research Instruments, RI energy research, our orders were up well over 100% year-over-year. In general, for perspective, keep in mind that Bruker and our orders tend to lag. Our revenues tend to lag the order trends by a couple of quarters.

Speaker #3: If you go to slide 9, we touch on our other deep tech areas—our security detection on the left, and energy research on the right.

Speaker #3: And those two businesses are also seeing considerable strength. First half detection orders and revenue were both up approximately 20% year over year.

Speaker #3: Whereas, as I just mentioned, our first-half research instruments (RI) energy research orders were up well over 100% year over year. In general, for perspective, keep in mind that at Bruker our orders tend to lag.

Speaker #3: Our revenues tend to lag. The order trends by a couple of quarters. And for these deep tech areas that I just mentioned, many of them will begin to help our revenue and P&L.

Frank Laukien: For these deep tech areas that I just mentioned, many of them will begin to help our revenue and P&L in Q4 of this year, and then very much into 2027 and into the outer years. In summary, in Q2, we achieved solid orders in many life science end markets, and we achieved very strong order growth in our so-called deep tech tools. We made further meaningful progress on our cost actions, setting us up for continued margin expansion and EPS growth in fiscal year 2026. We are proactively taking additional cost out steps that are expected to add additional P&L benefits next year. With that, let me turn the call over to our CFO, Gerald Herman, who will review Bruker's Q2 and fiscal year 2026 outlook in more detail. Gerald?

Speaker #3: In Q4 of this year, and then very much into 2027 and into the outer years. So in summary, in the second quarter, we achieved solid orders in many life science and markets, and we achieved very strong order growth in our so-called deep tech tools.

Speaker #3: We made further meaningful progress on our cost action, setting us up for continued margin expansion and EPS growth in fiscal year 2026. And we are proactively taking additional cost out steps that are expected to add additional P&L benefits next year.

Speaker #3: So with that, let me turn the call over to our CFO, Gerald Herman. We'll review BRUKER's Q2 in and fiscal year 2026 outlook in more detail.

Speaker #3: Gerald.

Speaker #2: Thank you, Frank, and thank you everyone for joining us today. I'm pleased to provide more detail on BRUKER's second quarter and first half 2026 financial performance.

Gerald Herman: Thank you, Frank, and thank you everyone for joining us today. I am pleased to provide more detail on Bruker's Q2 and H1 2026 financial performance, starting on slide 11. In Q2 2026, our results came in at the low end of our expectations on the top line, but meaningfully ahead of expectations on margins and EPS. Our top-line results in Q2 2026 were unfavorably impacted by US tariff refunds and a stronger US dollar, which translated into less tailwind on revenue. In total, approximately 110 basis points. US tariff refunds reduced our organic revenue growth from 3.4% to 2.8%, but strengthened our profitability in the quarter, adding around 200 basis points to Q2 2026 operating margins year-over-year. Net US tariffs contributed about $0.06 to EPS in Q2.

Speaker #2: Starting on slide 11, in the second quarter of 2026, our results came in, kept the low end of our expectations on the top line.

Speaker #2: But meaningfully ahead of expectations on margins and EPS. Our top-line results in the second quarter of 2026 were unfavorably impacted by US tariff refunds and a stronger US dollar, which translated into less tailwind on revenue.

Speaker #2: In total, approximately 110 basis points. US tariff refunds reduced our organic revenue growth from 3.4% to 2.8%, but strengthened our profitability in the quarter adding around 200 basis points the second quarter 2026, operating margins year over year.

Speaker #2: Net U.S. tariffs contributed about $0.06 to EPS in the second quarter. Most importantly, we also saw the accumulating impact of our cost-saving actions accelerate in the quarter.

Gerald Herman: Most importantly, we also saw the accumulating impact of our cost-saving actions accelerate in the quarter, together with favorable mix and volume. In Q2 2026, Bruker's reported revenue increased 5.2% to $838.5 million, reflecting a pivot to organic growth in the quarter of 2.8% or 3.4% year-over-year, excluding US tariff refunds. Acquisitions contributed 1.5% to our top line, while foreign exchange was a 0.9% tailwind, resulting in constant exchange rate revenue growth of 4.3% year-over-year. Geographically, and on a year-over-year organic basis in Q2 2026, our Americas and European revenues both grew approximately 10%, while Asia Pacific revenue declined in the low double-digits percentage, including a low double-digit decline of revenue in China. For our AMEA region, revenue was down low single-digit percentage.

Speaker #2: Together with favorable mix and volume, in the second quarter of 2026, Bruker's reported revenue increased 5.2% to $838.5 million, reflecting a pivot to organic growth in the quarter of 2.8%, or 3.4% year over year excluding U.S. tariff refunds.

Speaker #2: Acquisitions contributed 1.5% to our top line, while foreign exchange was a 0.9% tailwind, resulting in constant exchange rate revenue growth of 4.3% year over year.

Speaker #2: Geographically, and on a year over year organic basis, in the second quarter of 2026, our Americas and European revenues both grew approximately 10%, while Asia Pacific revenue declined in the low double digits percentage including a low double digit decline of revenue in China.

Speaker #2: For RMEA region, revenue was down low single digit percentage. BSI organic revenue grew 2.3% in the second quarter of 2026, with low single digit organic growth in CalEd and BRUKER Nano, partially offset by flat revenue performance in biospend.

Gerald Herman: BSI organic revenue grew 2.3% in Q2 2026, with low single-digit organic growth in CALID and Bruker Nano, partially offset by flat revenue performance in Bruker BioSpin. BSI systems revenue was roughly flat and BSI aftermarket revenues were up mid-single digits organically year-over-year. Our BSI segment order book performance was up organically a solid 10% year-over-year, driven by greater than 50% growth in semi and greater than 20% growth in biopharma, partially offset by declines in US ACA Gov and food safety. Q2 2026 non-GAAP gross margin increased 350 basis points to 52.1%. Non-GAAP operating margin was 14.1%, up 510 basis points, driven by our cost-saving actions, positive net US tariff impact, and favorable volume mix, partially offset by foreign currency headwinds, as shown on the slide.

Speaker #2: BSI systems revenue was roughly flat, and BSI aftermarket revenues were up mid single digits organically year over year. Our BSI segment order book performance was up organically a solid 10% year over year, driven by greater than 50% growth in semi and greater than 20% growth in biopharma, partially offset by declines in US ACA GOV and food safety.

Speaker #2: Second quarter 2026 non-GAAP gross margin increased 350 basis points to 52.1%. Non-GAAP operating margin was 14.1%, up 510 basis points, driven by our cost-saving actions, positive net US tariff impact, and favorable volume mix, partially offset by foreign currency headwinds as shown on the slide.

Speaker #2: On a non-gap basis, second quarter 2026 diluted EPS was 49 cents, up 53% rather from the 32 cents in the second quarter 2025. Our non-gap effective tax rate was 25% compared to 23.6% in the second quarter of 2025.

Gerald Herman: On a non-GAAP basis, Q2 2026 diluted EPS was $0.49, up 53% from the $0.32 in Q2 2025. Our non-GAAP effective tax rate was 25% compared to 23.6% in Q2 2025. On a GAAP basis, we reported a diluted loss per share of $0.41 compared to GAAP EPS of $0.05 in Q2 2025. Our Q2 2026 GAAP results include a non-cash goodwill impairment charges of $135 million related to our automation and spatial biology businesses, which continue to experience operating losses. Weighted average diluted shares outstanding in Q2 2026 were 152.8 million, an increase of 1.1 million shares from Q2 2025. Slide 12 shows Bruker's performance for H1 2026, which has similar drivers to Q2.

Speaker #2: On a gap basis, we reported a diluted loss per share of 41 cents, compared to gap EPS of 5 cents in the second quarter of 2025.

Speaker #2: Our second quarter 2026 GAAP results include a non-cash goodwill impairment charge of $135 million related to our automation and spatial biology businesses, which continued to experience operating losses.

Speaker #2: Weighted average diluted shares outstanding in the second quarter of 2026 were 152.8 million, an increase of 1.1 million shares from the second quarter of 2025.

Speaker #2: Slide 12 shows Bruker's performance for the first half of 2026, which has similar drivers to the second quarter. Turning to slide 13, in the second quarter of 2026, our operating cash flow improved $50 million year over year, driven by improved profitability and the timing of tax and vendor payments in the quarter.

Gerald Herman: Turning to slide 13, in Q2 2026, our operating cash flow improved $50 million year-over-year, driven by improved profitability and the timing of tax and vendor payments in the quarter. Free cash flow improved approximately $43 million on a year-over-year basis. On stronger EBITDA in Q2 2026, our net leverage ratio is now 2.8 times as of 30 June 2026. Turning now to slide 15, our fiscal year 2026 financial update, outlook rather, has been updated for foreign currency and effective tax rates only. We now expect a foreign exchange tailwind to revenues of 0.5%, rather than 1.5% previously, resulting in reported revenue of $3.54 to $3.57 billion and representing reported growth of 3% to 4% compared to fiscal year 2025. Organic revenue growth of 1% to 2% year-over-year, which is unchanged, and acquisitions are expected to contribute 1.5% to growth, also unchanged.

Speaker #2: Free cash flow improved approximately 43 million dollars on a year over year basis. On stronger EBITDA in the second quarter of 2026, our net leverage ratio is now 2.8 times as of June 30th, 2026.

Speaker #2: Turning now to slide 15, our fiscal year 2026 financial update outlook rather has been updated for foreign currency and effective tax rates only. We now expect the foreign exchange tailwind to revenues of 0.5% rather than 1.5% previously.

Speaker #2: Resulting in reported revenue of 3.54 to 3.57 billion dollars, and representing reported growth of 3 to 4% compared to fiscal year 2025. Organic revenue growth of 1 to 2% year over year, which is unchanged and acquisitions are expected to contribute 1.5% to growth also unchanged.

Speaker #2: We continue to expect non-GAAP operating margin expansion of 250 to 300 basis points year over year, largely driven by our cost-saving actions. 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, all unchanged.

Gerald Herman: We continue to expect non-GAAP operating margin expansion of 250 to 300 basis points year-over-year, largely driven by our cost-saving actions. 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, all unchanged, as lower headwinds from foreign exchange are broadly offset by our higher effective tax rate. Other guidance assumptions are listed on the slide. Our full fiscal year 2026 ranges have been updated for foreign currency rates as of 30 June 2026. Now some color on Q3 2026. We expect approximately $20 million of previously planned Q3 revenue to shift into Q4, driven by semiconductor customer delivery requirements. This results in Q3 organic revenue to be roughly flat to up slightly year-over-year.

Speaker #2: As lower headwinds from foreign exchange are broadly offset by higher our higher effective tax rate. Other guidance assumptions are listed on the slide. Our fiscal year 2026 ranges of an updated for foreign currency rates as of June 30th, 2026.

Speaker #2: Now some color on the third quarter of 2026. We expect approximately 20 million dollars of previously planned third quarter revenue to shift into the fourth quarter, driven by semiconductor customer delivery requirements.

Speaker #2: This results in Q3 organic revenue to be roughly flat to up slightly year over year. On operating margins and EPS in the third quarter, we now expect a slight sequential decrease due to the 20 million dollars semi revenue shift from the third to the fourth quarter, and the 6 cent net US tariff EPS benefit previously expected to come into the third quarter being pulled into the second quarter.

Gerald Herman: On operating margins and EPS in Q3, we now expect a slight sequential decrease due to the $20 million semi revenue shift from Q3 to Q4, and the $0.06 net US tariff EPS benefit previously expected to come into Q3 being pulled into Q2. On a positive note, for Q4 2026, we now expect meaningful sequential and year-over-year increases in organic revenue growth, operating margin and EPS due to significantly higher volume and favorable mix in Q4. To wrap up, Q2 2026 was another solid bookings quarter for Bruker, giving us further confidence in a gradual market recovery in several key markets and geographies.

Speaker #2: On a positive note for the fourth quarter of 2026, we now expect meaningful sequential and year over year increases in organic revenue growth, operating margin, and EPS due to significantly higher volume and favorable mix in the fourth quarter.

Speaker #2: To wrap up, Q2 2026 was another solid bookings quarter for BRUKER, giving us further confidence in a gradual market recovery in several key markets and geographies.

Speaker #2: Our cost-saving actions are well on track, positioning us well for significant margin and profitability improvement in fiscal year 2026, and we're driving towards further significant margin improvement and double-digit EPS growth also in 2027.

Gerald Herman: Our cost saving actions are well on track, positioning us well for significant margin and profitability improvement in fiscal year 2026. We're driving towards further significant margin improvement and double-digit EPS growth also in 2027. With that, I'd like to turn the call over back to Joe. Thank you very much.

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

Speaker #1: 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 one question and one follow-up.

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 one question and one follow-up. Operator?

Speaker #1: Operator.

Speaker #3: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two. Our first question will come from Puneet Souda of Leerink Partners. Please go ahead.

Speaker #3: To withdraw your question, please press star then two. And our first question will come from Puneet Sauda of Lyric Partners. Please go ahead.

Speaker #4: Yeah, hi guys. Frank, Gerald, thanks for taking the questions. First one is on the tariff refund treatment. Some of the peers are calling it as a pass-through with no net impact as these refunds are passed on to the customers.

Puneet Souda: Yeah. Hi, guys. Frank, Gerald, thanks for taking the questions. First one is on the tariff refund treatment. Some of the peers are calling it as a pass-through with no net impact as these refunds are passed on to the customers. Just wanted to clarify on the treatment, and what is embedded in the tariff refund in the H2 and for the full year guide because you're reiterating it. It does appear that, if we account for the refund, that it is a step down. If you could just clarify those points.

Speaker #4: So just wanted to clarify on the treatment and what is embedded in the tariff refund in the second half and for the full year guide because you're re-trading it, but it does appear that if we account for the refund, that it is a step down.

Speaker #4: So if you could just clarify those points.

Speaker #2: All right, Puneet, this is Gerald. So with respect to the first question, regarding the tariff refunds—as you can guess, some of those tariff elements were charged to individual customers, and that resulted in a contra revenue element, which is considered in our press release and the materials we provided.

Gerald Herman: Hi, Puneet, it's Gerald. With respect to the first question, with respect to the tariff refunds, as you can guess, right? Some of those tariff elements were charged to individual customers and that resulted in a contra revenue element, which is considered in our press release and the materials we provided. With respect to EPS, we've also indicated that that generated roughly 200 basis points of margin expansion in the quarter for the Q2. As far as the H2 goes, we've already factored that or baked that into our earlier guide numbers. We had just actually assumed that it would be more likely recovered in the Q3 and the Q4, not in the Q2. We had a slightly earlier pull forward of that into the Q2. Overall, that's already been baked into our original guidance model.

Speaker #2: With respect to EPS, we've also indicated that that generated roughly 200 basis points of margin expansion. In the quarter for the second quarter, as far as the second half goes, we've already factored that or baked that into our earlier guide numbers.

Speaker #2: We had just actually assumed that it would be more likely recovered in the third and the fourth quarters, not in the second quarter. So we had a slightly earlier pull forward of that into the second quarter.

Speaker #2: But overall, that's already been baked into our original guidance model.

Speaker #1: Okay.

Puneet Souda: Okay.

Speaker #2: Hopefully that helps.

Gerald Herman: Hopefully that helps.

Speaker #1: Yeah, that's helpful. I'll follow up later. But just maybe one quick one on semi—you were pointing to growth there, correct me if I'm wrong.

Puneet Souda: That's helpful. I'll follow up later, but just maybe one quick one on semi. You're pointing to 50% order growth there. Correct me if I'm wrong, but in terms of the visibility into this and the timing of delivery, maybe, Frank, could you double-click? Obviously, this is an end market that is fairly actionable right now, just given the AI demand. What sort of sustainability that you're hearing from the customer end? Obviously these are somewhat separated from the leading AI companies that are driving that demand. Maybe just could you elaborate a bit on the timing of the installs and conversion into revenue?

Speaker #1: But in terms of visibility into this and the timing of delivery, maybe Frank, could you double-click? Obviously, this is a market that is fairly actionable right now, just given the AI demand.

Speaker #1: What sort of sustainability are you hearing from the customer end? Because obviously, these are somewhat separated from the leading AI companies that are driving that demand.

Speaker #1: So maybe, could you just elaborate a bit on the timing of the installs and conversion into revenue?

Speaker #5: Yeah. Yeah, no, this is the older Sauda Remarkable for the first half. And even more so in Q2. Of course, there'll be some fluctuations, but if anything, it seems to be accelerating as one would expect, probably.

Frank Laukien: No, the orders are remarkable for H1 and even more so in Q2. Of course, there'll be some fluctuations, but if anything, it seems to be accelerating as one would expect, probably. We think, and from what we read about others that are more deeply in semiconductor lithography or metrology, we think this is very sustainable this year and next, and then I think the debate is whether it's sustainable at that pace in 2028 and beyond. People just don't know yet. I would think that the visibility of the sector for the next six quarters plus seems excellent. That's not necessarily our own data. That's the general what we read from the industry.

Speaker #5: We think and from what we read about others that are more deeply in semiconductor lithography or metrology, we think this is very sustainable this year and next.

Speaker #5: And then I think the debate is whether it's sustainable at that pace in 2028 and beyond. People just don't know yet. But I would think the visibility of the sector for the next six quarters, plus necessarily our own data.

Speaker #5: That's generally what we read from the industry. It is correct that many of these orders, as wonderful as they are—they're absolutely fantastic.

Frank Laukien: It is correct that many of these orders, as wonderful as they are, and they're absolutely fantastic, they usually have an even longer delivery times than an average NMR or mass spec, so that can easily be 3 to sometimes 6 to 8 quarters. Visibility is very good because those customers, they're almost like clockwork, right? They know when they need it for a new wafer fab and so on. Good visibility, but a little bit of a delayed gratification as some of that comes in in Q4. As Gerald said, I think we'll have a very strong Q4, and then quite a bit of this goes into next year in terms of revenue and P&L help, and even into 2028. Great sustainability, great visibility, slightly longer lead times.

Speaker #5: They usually have an even longer delivery times than an average NMR or mass spec. So that can easily be three to sometimes six to eight quarters.

Speaker #5: Visibility is very good because those customers are very they're like almost like clockwork, right? And they know when they need it for a new waiver fab and so on.

Speaker #5: So good visibility, but a little bit of a delayed gratification as more of some of that comes in in Q4. As Gerald said, I think we'll have a very strong Q4.

Speaker #5: And then quite a bit of this goes into next year in terms of revenue and P&L, and even into 2028. So, great sustainability, great visibility.

Speaker #5: Slightly longer lead times.

Speaker #2: Got it. Thank you.

Michael Ryskin: Got it. Thank you.

Speaker #3: The next question comes from Michael Reiskin of Bank of America. Please go ahead.

Operator: The next question comes from Michael Ryskin of Bank of America. Please go ahead.

Speaker #6: Great, thanks for the question. I want to just go back to Q2 performance briefly. I'm not sure if we want to talk ex-tariffs or including tariffs, but overall, organic was just a little bit lighter than we would have expected, especially, I think, in BSI.

Michael Ryskin: Great. Thanks for the question. I want to just go back to Q2 performance, briefly. I'm not sure if you want to talk ex-tariffs or including tariffs, but overall organic was just a little bit lighter than we would've expected, especially I think in BSI. We were looking at more something like mid-single digits, especially given the comps. You touched on academic and government, some other end markets. Again, a lot of that was expected and known. Is there anything unusual that happened in the quarter? Any push outs or timing, or just sort of how to think about Q2 relative to your prior assumptions? Thanks.

Speaker #6: We were looking at more something like mid-single digits, especially given the comps. So you touched on academic and government, some other end markets. Again, a lot of that was expected and known.

Speaker #6: Is there anything unusual that happened in the quarter? Any push-outs or timing? Or just sort of how to think about Q2 relative to your prior assumptions?

Speaker #6: Thanks.

Speaker #5: Yeah, Mike, thank you. So other than about the combined effect of the tariff refunds on revenue, which was, as you can see, was 60 bips, and there is an additional 50 bips effect from the currency tailwind actually being about 50 bips lower than had been expected because currency rates changed.

Frank Laukien: Yeah, Mike. Thank you. Other than about the combined effect of tariff refunds on revenue, which as you can see, was 60 basis points, and there is an additional 50 basis points effect from the currency tailwind actually being about 50 basis points lower than had been expected because currency rates change. That'll become more pronounced in Q3. In Q3, that currency tailwind on the revenues line is turning into a currency headwind. In Q3, it's not organic, but it takes out about $15 million in revenue independent of the revenue shift that Gerald had explained. Back to Q2 and to your question. That combined effect was about 110 basis points of growth rate. Still on the light side on the revenues and on the organic revenues.

Speaker #5: That'll become more pronounced in Q3. In Q3, that currency tailwind is on the revenues line is turning into a currency headwind. So in Q3, that takes out about it's not organic, but it takes out about 15 million.

Speaker #5: In revenue, independent of the revenue shifts that Gerald had explained. But back to Q2 and to your question, so that combined effect was about 110 bips of growth rate.

Speaker #5: Still on the light side, on the revenues and on the organic revenues, and the number one and two and three reason are US ACAGAV, are US ACAGAV revenues in Q2, which is the result of weak orders in the second half of last year, were down more than 10 million, actually more than 15 million still year over year.

Frank Laukien: The number 1 and 2, and 3 reason are our US ECA Gov. Our US ECA Gov revenues in Q2, which is the result of weak orders in H2 of last year, were down more than $10 million, actually more than $15 million still year over year. As I said earlier, that just takes a couple of quarters, what we're seeing there right now. That was the biggest weakness in revenue in Q2.

Speaker #5: So as I said earlier, yeah, the order that just takes a couple of orders, what you're seeing there right now, that was the biggest that was the biggest weakness in revenue in the second quarter.

Speaker #6: Okay. Okay. If I could squeeze a follow-up, just Gerald, maybe for you. The margin ramp through the second half of the year, I mean, obviously, there was the margins came in better in Q2, but a lot of that was tariffs.

Michael Ryskin: Okay. If I could squeeze a follow-up, just Gerald, maybe for you. The margin ramp through H2 of the year, I mean, obviously, the margins came in better in 2Q, but a lot of that was tariffs. If you could just walk us through the margin ramp in 3Q and the rest of the year. I know that's a big stepping point, would love to get some clarity on that. Thanks.

Speaker #6: If you could just walk us through the margin ramp in Q3 and the rest of the year. And that's a big second point, so I would love to get some clarity on that.

Speaker #6: Thanks.

Speaker #2: Yeah. In terms of the I mean, I mentioned in my prepared remarks on the third quarter, we are expecting some shift of revenue particularly related to semi Frank was just noting.

Gerald Herman: Yeah. I mentioned in my prepared remarks on Q3, we are expecting some shift of revenue, particularly related to semi, as Frank was just noting. Got strong orders and some of the revenue, because of customer timing, is moving to Q4. In addition, as I mentioned earlier, we did have a shift of what we expected from a tariff perspective out of Q3 into Q2. We think, from a margin perspective, we think this is likely going to be somewhat down from what we initially expected, and on the revenue line, we think we're going to be sort of flat to slightly up, from an organic perspective, in Q3. Of course, we have a strong expected Q4. Significant growth there. There's a bunch of factors related to that. There's the push out I just described in semi.

Speaker #2: We got strong orders in some of the revenue because customer timing is moving to the fourth quarter. In addition, as I mentioned earlier, we did have a shift of what we expected from a tariff perspective.

Speaker #2: Out of the third quarter into the second. So we have slight we think from a margin perspective, we think this is likely going to be somewhat down from what we initially expected.

Speaker #2: And on the revenue line, we think we're going to be sort of flat to slightly up from an organic perspective in the third quarter.

Speaker #2: And then, of course, we have a strong expected fourth quarter—significant growth there. There are a bunch of factors related to that. There's the push-out I just described in semi.

Speaker #2: We have a much stronger expectation around we have an ultra-high field coming into the fourth quarter. We have a number of mixed improvements that are much better.

Gerald Herman: We have a much stronger expectation around, we have an ultra-high field coming into Q4. We have a number of mixed improvements that are much better in that we have a much higher volume. As I think you know, we get to a much better story in terms of our overall EPS growth in Q4. It's shaping up to be a larger Q4 than we had expected, likely in around the billion-dollar range. We've done this level of revenue growth in the past in Q4, I think we just can execute to those levels, and that's our expectation at the moment.

Speaker #2: In that, we have a much higher volume. And as I think you know, we get to a much better story in terms of our overall EPS growth in the fourth quarter.

Speaker #2: It's shaping up to be a larger fourth quarter than we had expected. Likely in around the billion dollar range. We've done this level of revenue growth in the past in the fourth quarter.

Speaker #2: So I think we just can execute to those levels, and that's our expectation at the moment.

Speaker #6: All right. Thanks.

Michael Ryskin: All right. Thanks.

Speaker #2: Sure.

Gerald Herman: Sure.

Speaker #3: The next question comes from Taiko Peterson of Jefferies. Please go ahead.

Operator: The next question comes from Tycho Peterson of Jefferies. Please go ahead.

Speaker #4: Hey, thanks. Gerald, I'm actually going to pick up right there—on margins. So you mentioned mix. Is there some coming from the pricing actions you took last year coming out of backlog?

Tycho Peterson: Okay, thanks. Gerald, I'm going to actually pick up right there on margins. You mentioned mix. Is there some coming from the pricing actions you took last year coming out of backlog? How are you thinking about input costs here going forward? Are you backing off the 300 to 350 basis of core margin expansion? You had that in the deck last quarter. I didn't see you reiterate that. The incremental cost actions, how do we think about those flowing through into 2027?

Speaker #4: And then how are you thinking about input costs here going forward? Also, are you backing off the 350 to 350 basis of core margin expansion?

Speaker #4: You had that in the deck last quarter. I didn't see you reiterate that. And then the incremental cost actions, how do we think about those flowing through into '27?

Speaker #2: Okay. Well, there’s a lot there. Let’s start in the reverse order. On the cost actions, we’re well on track. We’re north of the $140 million Frank mentioned, and the adoption of a new operating structure for Bruker.

Gerald Herman: Okay. Well, there's a lot there. Let's start in the reverse order. On the cost actions, we're well on track. We're north of the $140 million. Frank mentioned the adoption of a new operating structure for Bruker, that's going to contribute some more additional savings beyond the $140 million we were planning for in 2026. That'll mostly hit in 2027, but still. We're well on track with, I would say, strong cost-saving actions even going forward beyond what we've already delivered. By the way, just from a cost savings perspective, we have delivered about $30 million in cost saving actions in the Q2. We're right on track to where we expect it to be. With respect to the other questions, let's take one at a time here.

Speaker #2: And that's going to contribute some more additional savings beyond the 140 million dollars we were planning for in 2026. That'll mostly hit in 2027, but still some so we're well on track with, I would say, a strong cost saving actions even going forward beyond what we've already delivered.

Speaker #2: By the way, just from a cost savings perspective, we have delivered about $30 million in cost saving actions in the second quarter. So we're kind of right on track to where we expect to be.

Speaker #2: With respect to the other questions, let's sort of take one at a time here. I think our cadence with respect to the third quarter is just now shifted a little bit further into the fourth.

Gerald Herman: I think our cadence with respect to Q3 has just now shifted a little bit further into Q4. As I said earlier, we have a strong setup in Q4, typically, even seasonally for Bruker, and it appears we are going to have another one of those as we march into Q4 of 2026. The mix story, we are going to get some and continue to get some pricing benefit from adjustments we made in 2025 into 2026, including in Q4. The biggest piece, I would say, for the Q4 performance is really going to be about volume. With the scale that we will deliver in Q4, I think the volume piece is going to be much more important actually than just the mix element.

Speaker #2: As I said earlier, we have a strong setup in the fourth quarter typically, even seasonally for Bruker. And it appears they're going to have another one of those as we march into the fourth quarter of '26.

Speaker #2: The mix story, we are going to get some and continue to get some pricing benefit. From adjustments we made in 2025 into '26, including in the fourth quarter, the biggest piece I'd say for the fourth quarter performance is really going to be about volume.

Speaker #2: With the scale that we will deliver in the fourth quarter, I think the volume piece is going to be much more important, actually, than just the mix element.

Speaker #2: But we do expect a better mix with respect to semi or ultra-high field. Some of our other key businesses are also expected to perform more strongly in the fourth quarter.

Gerald Herman: We do expect better mix with respect to semi, our Ultra-high field, and some of our other key businesses are going to perform more strongly in Q4 based on what we see at this stage.

Speaker #2: Based on what we see at this stage.

Speaker #5: I think, Taiko, to your operating margin question, if you even look at our slide 15—so, if we haven't been clear enough—yeah, that continues to be based—our guidance continues to be based on an operating margin up 250 to 300 bps reported.

Frank Laukien: I think, Tycho, to your operating margin question, if you even look at our slide 15, sorry if we haven't been clear enough. Yeah, our guidance continues to be based on an operating margin up 250 to 300 bps reported, including a 50 bps headwind, and sort of detailed a little bit on our slide 15 on the outlook. That is unchanged.

Speaker #5: Including a 50 basis points headwind. And as detailed a little bit on our slide 15 on the outlook, that is unchanged.

Speaker #4: And then on the COGS side, Gerald, just inflationary—memory chips, tungsten, etc.?

Tycho Peterson: On the COGS side, Gerald, just inflationary, memory chips, tungsten, et cetera.

Speaker #2: Yeah, that seems to be—I mean, from an energy cost perspective, we've already baked that into the guide earlier. We're not seeing, at least at this stage, any significant pressure there at this point.

Gerald Herman: Yeah. From an energy cost perspective, we've already baked that into the guide earlier. We're not seeing, at least at this stage, any significant pressure there at this point. We are having some supply chain challenges around componentry, mostly in the electronic side. At this stage, we're pretty comfortable that that's already been baked in to our current guide.

Speaker #2: We are having some supply chain challenges around componentry, mostly on the electronic side. But at this stage, we're pretty comfortable that that's already been baked into our current guide.

Speaker #4: Okay. And then Frank, just in terms of the order book, I appreciate the color on semis. Just can you maybe talk about elsewhere academic and gov maybe where you're feeling a little bit better?

Tycho Peterson: Okay. Then Frank, just in terms of the order book, I appreciate the color on semis. Just can you maybe talk about elsewhere, academic and gov, maybe where you're feeling a little bit better? You talked last quarter about some signs of improvement there.

Speaker #4: You talked last quarter about some signs of improvement there.

Speaker #5: Yeah. It's the US still weak, as I said. And then so we're seeing the encouraging NIH outlays, but they did not yet translate into significant Q2 orders.

Frank Laukien: Yeah. The US is still weak, as I said. We're seeing the encouraging NIH outlays, but they did not yet translate into significant Q2 orders. We will observe what's happening in Q3, and of course, the Q3 budget flush, which seems to be underway, could for us also mean decent Q4 US ACA Gov bookings. We'll see. In Q2 already, the ACA Gov orders outside of the US, and particularly in the EU, was up more than 10%. In China, the orders were up more than 20% for ACA Gov in Q2. Remember, China was down on revenue, but then on orders it was up more than 20% in ACA Gov. That's that 6 months delay that you usually see at Bruker. Yeah. ACA Gov, which I think that really supports the strength of our ASMS Mass Spec introduction.

Speaker #5: We will observe what's happening in Q3. And of course, the Q3 budget flush, which seems to be underway, could for us also mean decent Q4 US ECOGOV bookings.

Speaker #5: But we'll see. In Q2 already, the ECOGOV orders outside of the U.S., and particularly in the EU, were up more than 10%. And in China, the orders were up more than 20% for ECOGOV in Q2.

Speaker #5: So remember, China was down on revenue, but then on orders, it was up more than 20% in ECOGOV. So that's that six months delay that you usually see at Bruker.

Speaker #5: So yeah, ECOGOV, which I think that really supports the strength of our ASMS mass spec introduction. So the new things we can do with our NMRs and of course our even our other spatial biology and other tools or so.

Frank Laukien: The new things we can do with our NMRs and, of course, even our other spatial biology and other tools or so. The portfolio I think is spot on. I think the innovation will have major impact if we only had a little bit more US funding, maybe that's coming. Where we have funding, it has a big impact. That bodes well for ACA Gov competitiveness and market shares gains. Except it's starting right now in Europe and in APAC and China in particular.

Speaker #5: The portfolio and I think is spot on. I think the innovation will have major impact. If we only had a little bit more US funding, but maybe that's coming.

Speaker #5: And where we have funding, it really it has a big impact. So that bodes well for ECOGOV competitiveness and market share gains. Except it's starting right now in Europe and in APAC and China in particular.

Speaker #4: Thank you.

Tycho Peterson: Thank you.

Speaker #5: All right.

Frank Laukien: All right.

Speaker #1: The next question comes from Sabu Nambi of Guggenheim. Please go ahead.

Operator: The next question comes from Subbu Nambi of Guggenheim. Please go ahead.

Speaker #6: Hey guys. Thank you for taking my question. Team, this will be at least a second year in a row where there is a timing dynamic challenge at the top line.

Subbu Nambi: Hey, guys. Thank you for taking my question. Team, this will be at least the second year in a row where there is a timing dynamic challenge at the top line and seemingly a push-out to Q4 or maybe even 2027. First, can you explain steps you're taking to improve visibility? Second, at Doug's bus tour in May, you indicated that 4% was a good starting point for 2027 revenue growth expectation. Given the timing dynamics, if this revenue gets pushed out to 2027, would that be on top of that 4%? Thank you so much.

Speaker #6: And seemingly a push out to Q4 or maybe even 2027. First, can you explain steps you're taking to improve visibility? And second, if Doug's bus tour in May, you indicated that 4% was a good starting point for 2027 revenue growth expectation.

Speaker #6: Given the timing dynamics, if this revenue gets pushed out to '27, would that be on top of that 4%? Thank you so much.

Speaker #5: So Sabu, very good questions. Yeah. I mean, what are we doing to increase visibility? Strong orders, right? We've had improving orders with better book to bill above one and pretty good order growth in those scientific instruments segment.

Frank Laukien: Those two were very good questions. Yeah, what are we doing to increase visibility? Strong orders, right? We've had improving orders with better book-to-bill above one and pretty good order growth in the scientific instrument segment, again, in Q2 and now four quarters in a row. That is helping us with visibility. The visibility sometimes, however, is, especially in these deep tech orders, for Q4 and for next year. Q4 should have a nice mid-single digit organic growth rate. It's a little bit of a roller coaster with Q2 growth and Q4 organic growth, and Q1 and Q3. Q1 was down, Q3 will be flat to slightly up.

Speaker #5: Again, in Q2 and now four orders in a row. That is helping us with visibility. The visibility sometimes, however, is and especially in these deep tech orders, for Q4 and for next year.

Speaker #5: So yeah, Q4 will should have a nice Smith single-digit organic growth rate. So it's a little bit it's a little bit of a roller coaster with Q2 growth and Q4 organic growth and Q1 and Q3.

Speaker #5: Q1 was down, Q3 will be flat to slightly up. But for the year, it's what we're what we've been aiming for and what we've what's in our guidance, namely the organic revenue growth of 1 to 2%, which is a transition year, admittedly, because but it comes from a year of '25 where we were declining organically for all the factors that you know.

Frank Laukien: For the year, it's what we've been aiming for and what's in our guidance, namely the organic revenue growth of 1% to 2%, which is a transition year, admittedly, but it comes from a year of 2025, where we were declining organically for all the factors that you know. Whether the Q4 growth rate is then indicative of our 2027 growth rate is too early to say. Give us a bit more time to see how bookings are, obviously, in Q3 and, yes, also in Q4, then we'll be able to comment on that. We generally believe, of course, in a further organic growth acceleration in 2027 compared to 2026, we cannot quantify that at this time.

Speaker #5: Whether Q4, the Q4 growth rate is then what an indicator of our '27 growth rate is—it's too early to say. So give us a bit more time to see how bookings are.

Speaker #5: Obviously, in Q3, and yes, also in Q4. And then we'll be able to comment on that. We generally believe, of course, in further growth acceleration in '27—organic growth acceleration in '27 compared to '26.

Speaker #5: But we cannot quantify that at this time.

Speaker #6: Thank you for that, Frank. And Gerald, I know you kind of explained this on the call on margins. You previously indicated that, even with flat top-line growth, you would be able to meet margin targets in Q3.

Subbu Nambi: Thank you for that, Frank. Gerald, I know you kind of explained this on the call on margins. You previously indicated that even with flat top-line growth, you would be able to meet margin targets in Q3. You pointed to progress, including facility rationalization, timing as support. Some of it was just structural. What changed? Is it just this product mix, and do you get this back at some point over the subsequent one or two quarters? Thank you so much.

Speaker #6: You pointed to progress, including facility rationalization, timing as support, some of it was just structural. What changed? Is it just this product mix or and do you get this back at some point over the subsequent one or two quarters?

Speaker #6: Thank you so much.

Frank Laukien: I don't think anything changed. Gerald was just talking about sequential. What happened is that we had assumed that we would get the tariff refunds, maybe ratably over Q2, Q3, Q4, and remarkably, they came in rather quickly, mostly in June. That's why our margins, that's why we pointed it out in Q2, our operating margins and our EPS had a greater benefit than we had expected from the tariff refunds coming in faster. We'll still have some in Q3, Q4, but to a lesser extent. Q3 is still okay, also on the margin side, but sequentially, Q2, in a good way, we overshot a little bit primarily because of these tariff refunds that really came in the last half of June, quite honestly, faster than we had expected. We thought the government would slow walk them. They did not.

Speaker #5: I don't think anything changed. Gerald was just talking about sequential. What happened is that the we had assumed that we would get the tariff refunds maybe ratably over Q2, Q3, Q4.

Speaker #5: And, remarkably, they came in rather quickly—mostly in June. So, that's why our margins— that's why we pointed it out in Q2. Our operating margins and our EPS had a greater benefit than we had expected.

Speaker #5: From the tariff refunds coming in faster, we'll still have some in Q3 and Q4, but to a lesser extent. So Q3 is still okay, also on the margin side, but sequentially, Q2 in a good way.

Speaker #5: We overshot a little bit, primarily because of these margin—these tariff refunds that really came in the last half of June, quite honestly, faster than we had expected.

Speaker #5: We thought the government would slow-walk them, but they did not.

Speaker #6: Thank you so much.

Subbu Nambi: Thank you so much.

Speaker #5: Sure.

Frank Laukien: Sure.

Speaker #1: The next question comes from Luke Sergot of Barclays. Please go ahead.

Operator: The next question comes from Luke Sergott of Barclays. Please go ahead.

Speaker #2: Great, thanks. Just a quick one on the bookings. Just to clear up, were the bookings down quarter over quarter? I'm just trying to get a level set of the overall dollar size that you guys had.

Luke Sergott: Great. Thanks. Just a quick one on the bookings. Just to clear up. The bookings, were they down quarter-over-quarter? I'm just trying to get a level set of the overall dollar size that you guys had.

Speaker #5: So you mean sequentially?

Frank Laukien: You mean sequentially?

Speaker #6: Sequentially?

Luke Sergott: Sequentially? Yeah. Were they down sequentially?

Gerald Herman: Sequentially?

Speaker #2: Yeah. Were they down sequentially?

Luke Sergott: Yeah. Were they down sequentially?

Frank Laukien: We're-

Speaker #5: No. They were up sequentially. We're scrambling for the numbers, but they were up. Yeah.

Subbu Nambi: No.

Gerald Herman: No.

Gerald Herman: They were up sequentially.

Luke Sergott: Okay.

Luke Sergott: We're scrambling for the numbers, they were up. Yeah.

Frank Laukien: We're scrambling for the numbers, they were up. Yeah.

Speaker #2: Okay. Great. And then as you think about the four Q step up here and in light of the strong bookings that you guys have had, how much of that four Q step of the billion dollars roughly about that number is already covered in your backlog?

Luke Sergott: Okay, great. As you think about the 4Q step-up here, in light of the strong bookings that you guys have had, how much of that 4Q step over the $1 billion, roughly about that number, is already covered in your backlog?

Speaker #5: So, it's obviously going to be more than a billion, right, to do the math? It's $1.02 to $1.04 or something like that.

Frank Laukien: It's obviously going to be more than $1 billion, right? You do the math.

Operator: Yeah

Frank Laukien: It's $1.02 to 1.04 billion or something like that.

Speaker #2: Yeah. Roughly close to that.

Luke Sergott: Yeah. Roughly close to that.

Frank Laukien: The percentage of that, a lot of that is in our backlog now. Of course, we also get some ongoing orders. I don't have a number right now. More than 50% for sure, but I don't have an exact number. Probably two-thirds, but again, sorry. You've stumped us twice. We do not have exact numbers for both of your questions. Well, we will, however, when we call you back, because we just don't have it at our fingertips.

Speaker #5: And a percentage of that, a lot of it is in our backlog now. But of course, we also get some ongoing orders.

Speaker #5: I don't have a number right now. More than 50% for sure, but I don't have an exact number. Probably two-thirds, but again, sorry, I do not have a— you’ve stumped us twice.

Speaker #5: We do not have exact numbers for both of your questions. Well, we will, however, when we call you back because we just don't have it at our fingertips.

Speaker #2: All right. That's a bucket list to stump you twice, Frank, so I appreciate it. Thanks.

Luke Sergott: All right. That is a bucket list to stump you twice, Frank. I appreciate it. Thanks.

Speaker #5: Yeah. Wow. Luke, you're on a roll. More questions? Luke, do you have any other questions? I'm sorry to do this to you.

Frank Laukien: Yeah. Wow, Luke, you are on a roll. More questions. Luke, do you have any other question? I am sorry to do this to you.

Speaker #2: Oh, yeah. So yeah. So on the and just sticking on the guide here, as you guys think about the pickup and the business, but from a demand perspective, what needs to get better?

Luke Sergott: Oh, yeah. Just sticking on the guide here, as you guys think about the pickup in the business from a demand perspective, what needs to get better? Is it all on the academic side? Are you seeing continued momentum on the pharma? Anything there from a geography or end market that needs to actually improve for you to realize that back end, that Q4 guide?

Speaker #2: Is it all in the academic side? Are you seeing continued momentum on the pharma? Anything there from a geography or M-market that needs to actually improve for you to realize that back end that four Q guide?

Frank Laukien: Well, quite honestly, almost everything is pretty good now. Applied markets, food analysis, a little weak, but that is small for us anyway. US ACA Gov clearly is the one outlier. Even with US ACA Gov, even if it stayed weak, we will take a growth step-up next year. If US ACA Gov came back, at least in a modest way, obviously we take a bigger growth step-up next year. More and more areas, biopharma has been great in the last two or three quarters, and again in Q2. Pharma, biopharma, the tools that we sell into that, SIMS Omni, SIMS Subsystems, NMRs, spatial biology, X-ray, it is really all quite good. Plus what people sometimes call these idiosyncratic growth drivers. We call them deep tech now because they are just not all life science, but they are absolutely terrific.

Speaker #5: Well, quite honestly, almost everything is pretty good now. Applied markets—so, food analysis is a little weak, but that's small for us anyway. And U.S. EcoGov clearly is the one outlier.

Speaker #5: Even with U.S. EcoGov, even in a state week, we'll take a growth step up next year. And if U.S. EcoGov came back, at least in a modest way, then obviously, we take a bigger growth step up next year.

Speaker #5: So, more and more areas—biopharma has been great in the last two or three quarters, and again in Q2. So, pharma, biopharma, the tools that we sell into that—timsomnies, timsoft systems, NMRs, spatial biology, X-ray—it's really all quite good.

Speaker #5: Plus, then, what people sometimes call these idiosyncratic growth drivers—because they're not all life science. We call them deep tech now because they're just not all life science, but they're absolutely terrific.

Speaker #5: However, with this delayed gratification, they typically have nine months, sometimes longer—nine months or longer—delivery times. And that's driven by the customers, not by our capacity.

Frank Laukien: With this delayed gratification of them typically having nine months or longer delivery times, and that's driven by the customers, not by our capacity.

Speaker #2: Great. Thank you.

Luke Sergott: Great. Thank you.

Speaker #6: So just on your other question—just on your other question around bookings growth sequentially—it is up, but I'd say it's low single digits up organically.

Gerald Herman: Just on your other question around bookings growth sequentially, it is up, but I'd say it's low single digits up organically from the previous quarter.

Speaker #6: From the previous quarter.

Speaker #5: Sequentially.

Frank Laukien: Sequentially?

Speaker #6: Yes. Sequentially.

Gerald Herman: Yes.

Frank Laukien: That's the sequential answer. Yes. Okay.

Gerald Herman: That's the sequential answer.

Frank Laukien: Yes. Okay.

Speaker #5: Yeah. Okay.

Speaker #2: Perfect. Thanks.

Luke Sergott: Perfect. Thanks.

Speaker #6: Yep.

Gerald Herman: Yep.

Frank Laukien: All right.

Speaker #5: All right.

Speaker #1: The next question comes from Casey Woodring of JP Morgan. Please go ahead.

Operator: The next question comes from Casey Woodring of J.P. Morgan. Please go ahead.

Operator: The next question comes from Casey Woodring of JPMorgan. Please go ahead.

Speaker #3: Great, thanks for taking my questions. Just to follow up on the deep tech piece—I appreciate the comments on SEMI, but you also flagged strong security detection and energy research orders.

Casey Woodring: Great. Thanks for taking my questions. Yeah, just to follow up on the deep tech piece, appreciate the comments on semi. You also flagged strong security detection and energy research orders in H1 of the year. I guess, is the strength that you're seeing there and the outperformance, was that something you had expected to begin the year and was that contemplated in the guide? Is this kind of incrementally better than expected? How do you view the sustainability of both of those businesses in terms of demand as we look into 2027, especially on the security side?

Speaker #3: In the first half of the year, I guess, is the strength that you're seeing there and the outperformance, was that something you had expected to begin the year, and was that contemplated in the guide?

Speaker #3: Or is this kind of incrementally better than expected? And then how do you view the sustainability of both of those businesses in terms of demand as we look into 2027, especially on the security side?

Speaker #5: On the security side, that was better than expected, but not hugely better. We expected strong security detection orders, but probably not greater than 20%.

Frank Laukien: On the security side, that was better than expected, but not hugely better. We expected strong security detection orders, but probably not greater than 20%. It was incrementally better than what we had expected. We have a very good product line there and differentiated products. Security and defense concerns are not abating. That looks very sustainable. I think that business for as far as I can see or anybody can see, we would expect good growth trends there and with good margins in security detection. That started a couple of years ago, and it's just been getting stronger. It's incrementally stronger than expected, but partly baked in. A lot of these orders are for things that you deliver to an airport sometime middle of next year, so it doesn't all go into Q2, Q3, Q4.

Speaker #5: So, it was incrementally better than what we had expected. It seems we have a very good product line there, and differentiated products. Plus, security and defense concerns are not abating.

Speaker #5: So that looks very sustainable. I think that business, for as far as I can see—or anybody can see—we would expect good growth trends there.

Speaker #5: And with good margins in security detection. That started, whatever, a couple of years ago, and it's just been getting stronger. So, it's incrementally stronger than expected, but partly baked in.

Speaker #5: A lot of these orders are for things that you deliver to an airport sometime middle of next year. So it doesn't all go into Q2, Q3, Q4.

Speaker #5: And energy research—that greatly exceeded, in terms of timing and amount, what we had expected. It's well over 100%. At that level, at that high growth rate, it's not sustainable.

Frank Laukien: Energy research that greatly exceeded, in terms of timings and amount, that greatly exceeded what we had expected. It's well over 100%. At that level, at that high growth rate, it's not sustainable, but that business is very sustainable because some of these orders are literally for 2027, 2028, and some go into 2029. They'll have very good continuing revenue growth in the foreseeable future. They've been batting 800 or something instead of the usual batting 400, to use baseball terminology. They've just done really, really well. Their order success rate and win rate has been ahead of their own expectations, and we're delighted.

Speaker #5: But that business is very sustainable because a lot of these orders are literally for '27, '28, and some go into '29. So they'll have very good, continuing revenue growth in the foreseeable future.

Speaker #5: But they've been batting, I don't know, they've been batting .800 or something instead of the usual .400, to use baseball terminology. They've just done really, really well.

Speaker #5: And their order success rate and win rate have been ahead of their own expectations, and we're delighted.

Speaker #3: Got it. That's helpful. And then maybe just a quick follow-up. Europe grew 10%. Maybe just walk through what you're seeing across the businesses in that region.

Casey Woodring: Got it. That's helpful. Maybe just a quick follow-up. Europe grew 10%. Maybe just walk through what you're seeing across the businesses in that region. Thank you.

Speaker #3: Thank you.

Speaker #5: And what region was that? I didn't catch it.

Frank Laukien: In what region was that? I didn't catch it. Europe.

Speaker #3: Europe.

Speaker #5: Europe.

Casey Woodring: Europe. Yeah, it grew 10%. Just maybe unpack that performance. Thank you.

Speaker #3: Yeah. It grew 10%. So just maybe unpack that performance. Thank you.

Speaker #5: I believe it was healthy on NMR, and on other BioSpin tools as well. EPR and preclinical imaging were also healthy. It was healthy on the mass spec offerings.

Frank Laukien: I believe it was healthy on NMR, on other BioSpin tools as well, ETR and preclinical imaging. It was healthy on the mass spec offerings. I don't have it, but for all the other divisions. It was very healthy also on molecular diagnostics. Our ELITechGroup business is just doing great. They just keep growing and placing instruments ahead of business plan. Last year, they thought that might settle a little bit. It hasn't. H1 placements in molecular diagnostics, the ELITechGroup business was ahead, well ahead of business plan. That bodes very well as the consumables pull through then builds on that larger installed base. Those were some of the highlights.

Speaker #5: I don't have it, but for all the other divisions, it was very healthy. Also, on molecular diagnostics, our LDTech business is just doing great.

Speaker #5: And they just keep growing and placing instruments ahead of business plan. Last year, they thought that might settle a little bit. It hasn't. First half bookings—sorry, first half placements—in molecular diagnostics, the LDTech business was ahead, well ahead, of business plan.

Speaker #5: And that then bodes very well as the consumables pull through then builds on that larger installed base. Those were some of the highlights.

Speaker #6: Yeah, and I'd just add, biopharma was solid as well in the quarter, in Europe.

Gerald Herman: Can I just add, biopharma was solid as well in the quarter in Europe.

Speaker #5: Right.

Frank Laukien: Right.

Speaker #6: Yeah.

Gerald Herman: Yeah.

Speaker #3: Thank you.

Casey Woodring: Thank you.

Speaker #6: Sure.

Gerald Herman: Sure.

Speaker #1: The next question comes from Dan Arias of Stifel. Please go ahead.

Operator: The next question comes from Dan Arias of Stifel. Please go ahead.

Speaker #4: Hi, guys. Thank you. Frank, just a follow-up on your comments around revenue recognition timing tied to the metrology business. What portion of the portfolio falls into that bucket of six-plus quarters when it comes to acceptance and just hitting the P&L?

Dan Arias: Hey, guys. Thank you. Frank, just to follow up on your comments around revenue recognition timing tied to the metrology business, what portion of the portfolio falls into that bucket of six-plus quarters when it comes to acceptance and just hitting the P&L? Just trying to get my hands around on pie charts, et cetera, within that business.

Speaker #4: Just trying to get my hands around pie charts and similar visuals within that business.

Speaker #5: Okay. Hi, Dan. Thinking for a moment. So, the deep tech portfolio, altogether, is maybe around 15% of our portfolio. Now, I cannot break out how much of that would have three or four quarters delivery time versus six and longer—that I can't break out readily.

Frank Laukien: Okay. Hi, Dan. Thinking for a moment. Okay. The deep tech portfolio is maybe altogether around 15% of our portfolio. I cannot break out how much of that would have 3 or 4 quarters delivery time versus six and longer. That I can't break out readily.

Dan Arias: Okay. No problem.

Speaker #5: But the deep tech portfolio, with longer delivery times of, let's say, three to six quarters, is about 15% of our portfolio.

Frank Laukien: The deep tech portfolio with the longer delivery times of, let's say, 3 to 6 quarters, is about 15% of our portfolio.

Speaker #6: Yeah.

Dan Arias: Yeah.

Speaker #5: And that does not include—in this case, we have not [included] 15%—we have not included supercon technologies. I guess you could also call that deep tech, but I didn't put that into that bucket.

Frank Laukien: That does not include.

Dan Arias: 15 per.

Dan Arias: 15%?

Frank Laukien: In this case, 15%, we have not included SuperCon Technologies. I guess you could also call that deep tech, but I didn't put that into that bucket. Here I looked at instruments and systems and modules rather than superconducting wire. 15% is deep tech, semiconductor metrology, security detection, energy research. In this case, I did not bundle the SuperCon solutions into that. Of course, they get these 5 or 7-year framework contracts. That has a very different rhythm. About 15%.

Speaker #5: Here, I looked at instruments and systems and modules rather than superconducting wire. So, yes, 15% is deep tech—semiconductor metrology, security detection, energy research.

Speaker #5: But in this case, I did not bundle the Supercon solutions into that. That, of course, they have—they get these five- or seven-year framework contracts.

Speaker #5: That has a very different rhythm. But about 15%, I think, is the question—that 15% is probably what you're looking for.

Dan Arias: Okay

Frank Laukien: I think is the question. 15% is probably what you're looking for.

Speaker #4: Okay, helpful. And then just maybe on input costs, which you guys referenced before—the market for helium is pretty tight again. How much is that a factor for your magnets business at this point?

Dan Arias: Okay. Helpful. Then just maybe on input costs, which you guys referenced before. The market for helium is pretty tight again. How much is that a factor for your magnets business at this point? It's been material in the past, but I know that you guys have worked to have those machines be less helium intense than they used to be. Just kind of trying to check in on whether that's something to think about. Thanks.

Speaker #4: I mean, it's been material in the past, but I know that you guys have worked to have those machines be less helium-intense than they used to be.

Speaker #4: So, just kind of trying to check in on whether that's something to think about. Thanks.

Speaker #5: Yeah. No, it's something we think about. And, of course, there are even blockades and all, right? So it's manageable because we've taken so many proactive steps in recent years, first of all, at our factories and final test sites that use a lot of helium.

Frank Laukien: Yeah. No, it's something we think about. Of course, there is even blockades and all, right? It's manageable because we've taken so many proactive steps in recent years. First of all, at our factories and final test sites that use a lot of helium, they really all have helium reliquefaction. Sorry, it's the terminology. We capture all of it and we liquefy all of it, and I think we're at 80% and 90% that we reliquefy. In addition, many of our newer magnets for the customers and also for our deliveries and installations have considerably lower helium consumption. We've offered now for some years, we and also some other third-party vendors, helium gas capture and recompression, repurification, liquefaction solutions. More and more of the larger labs are equipped with that. I'm not saying it's pain-free, but it's been greatly mitigated.

Speaker #5: They really all have helium reliquefaction, sorry, it's the terminology. So we capture all of it and reliquefy all of it. And I think we're at 80, 90 percent that we reliquefy.

Speaker #5: In addition, many of our newer magnets, for the customers and also for our deliveries and installations, have considerably lower helium consumption. And we've offered now for some years, we and also some other third-party vendors, helium gas capture and recompression, repurification, liquefaction, liquefaction solutions.

Speaker #5: So more and more of the larger labs are equipped with that. So, I'm not saying it's pain-free, but it's been greatly mitigated. And I'd say at the overall financial level, it's not something we need to highlight.

Frank Laukien: I'd say at the overall financial level, it's not something we need to highlight. It's manageable.

Speaker #5: It's manageable.

Speaker #4: Yeah, fair enough. Okay. Thank you, Frank.

Dan Arias: Yeah. Fair enough. Okay. Thank you, Frank.

Speaker #5: Sure, Dan.

Frank Laukien: Sure then.

Speaker #1: The next question will come from Jack Mehan of Operon Research. Please go ahead.

Operator: The next question will come from Jack Meehan of Operon Research. Please go ahead.

Speaker #2: Good morning, everyone. One of the big—a little bit more, and to dig more into Caled first. The microbiology business is flat year-to-date. Can you just give us an update on what you're seeing in MALDI?

Jack Meehan: Good morning, everyone.

Frank Laukien: Hi, Jack.

Jack Meehan: Wanted to dig more into CALID first. The microbiology business flat year-to-date. Can you just give us an update on what you're seeing in MALDI? Historically, that's been a pretty steady double-digit grower. Are there any regional or competitive dynamics you would call out?

Speaker #2: Historically, that's been a pretty steady double-digit grower. Are there any regional or competitive dynamics you would call out?

Speaker #5: Hi, Jack. So, no, I don't think so. I think there are just some quarterly fluctuations. They ended up getting some very large deals that they'll expect to deliver in Q3 and Q4, for instance, in Latin America and some other places.

Frank Laukien: Hi, Jack. No, I don't think so. I think there's just also some quarterly fluctuations. They ended up getting some very large deals that they'll expect to deliver in Q3 and Q4, for instance, in Latin America and some other places. I think that's more of a fluctuation. Generally, that instruments business tends to be maybe now a mid, sometimes high, single-digit grower, but the aftermarket for that business tends to be in the double-digit grower. That's also our expectation for the year.

Speaker #5: So I think that's more of a fluctuation. Generally, that instruments business tends to be, maybe now, a mid, sometimes high, single-digit grower. But the aftermarket for that business tends to be in the double-digit grower.

Speaker #5: And that's also our expectation for the year.

Speaker #2: Great, okay. And I appreciate all the color in terms of the cost savings program cadence. I was wondering if you could humor us and just talk about how you feel about the trajectory on margins into 2027, how much of that we can assume just kind of builds into next year versus areas you might be looking to reinvest?

Jack Meehan: Great. Okay. Appreciate all the color in terms of the cost savings program cadence. Was wondering if you could humor us and just talk about how you feel about the trajectory on margins into 2027, how much of that we can assume just kind of builds into the next year versus areas you might be looking to reinvest.

Speaker #5: Okay. Well, we're not ready for '27 color or guidance. But yes, we very much intend to, again, grow our margins well above 100 bps next year as well, from our '26 basis.

Frank Laukien: Well, we're not ready for 2027 color or guidance. Yes, we very much intend to, again, grow our margins well above 100 bps next year as well from our 2026 basis. Of course, we're looking for double digits, hopefully mid-teens non-GAAP EPS growth next year as well. As we had said, that won't end with 2027. Our goal is to drive back towards a 20% EBIT operating margin as quickly as possible, and then more gradually move up to the low twenties in EBIT and mid-twenties in EBITDA.

Speaker #5: And of course, we're looking for double-digit, hopefully mid-teens, EPS—non-GAAP EPS growth next year as well, as we had said. And that won't end with '27. Our goal is really to drive back towards a 20% EBIT operating margin as quickly as possible, and then more gradually move up to the low 20s in EBIT and mid-20s in EBITDA.

Speaker #2: Great. Thank you, Frank.

Jack Meehan: Great. Thank you, Frank.

Speaker #5: Congrats on Operon.

Frank Laukien: Congrats on Operon.

Speaker #6: Yes. Congratulations, Jack.

Dan Arias: Yes. Congratulations, Jack.

Gerald Herman: Yes. Congratulations, Jack.

Frank Laukien: Yeah. One more question. We can do one more question, yeah?

Speaker #5: Yeah. One more question. Are we—one more question? Yeah.

Speaker #4: Okay. Yeah. Operator, we can do one more question.

Joe Kostka: Okay. Yeah. Operator, we can do one more question.

Operator: One more question? Okay. Our next question will come from Brendan Digan of Citi. Please go ahead.

Speaker #1: One more question? Okay. Our next question will come from Brendan Digan of Citi. Please go ahead.

Speaker #3: Hi. This is Albert Hu on for Brendan. I just want to circle back on the 4Q growth. I kind of want exactly understand what is baked in.

Albert Hu: Hi, this is Albert Hu on for Brendan. I just want to circle back on the Q4 growth. I want to exactly understand what is baked in. We got the $20 million push out from Q3, the ultra-high field that was originally supposed to be in Q2, got pushed to Q4. Am I missing anything here? Can you remind us why exactly they got pushed out in the first place, and then what's the confidence level that it won't get pushed out again? Thank you.

Speaker #3: We got the $20 million push-out from Q3—the ultra-high field that was originally supposed to be in Q2 got pushed to Q4. Am I missing anything here?

Speaker #3: And can you remind us exactly why they got pushed out in the first place? And then, what's the confidence level that it won't get pushed out again?

Speaker #3: Thank you.

Speaker #5: Okay. So the third item is, of course, that currency has turned this year, with Q3 being the switchover point—where a revenue currency tailwind turns into a revenue currency headwind.

Frank Laukien: Okay. The third item is, of course, that currency has turned this year, with Q3 being the switchover point where a revenue currency tailwind turns into a revenue currency headwind. For the year, as you've seen, that's the FX part that we adjusted in our overall guidance. It's now a 0.5% tailwind, and it used to be 1.5% tailwind, and the biggest effect of that is in Q3 and in Q4. That's not organic, so maybe it shouldn't be a concern, but just saying. Q4 growth, yeah, mostly the $20 million in deliveries that Gerald said are shifting from Q3 to Q4. It's almost all semi. That's simply when the sites are ready, when the customers are ready. Of course, it's a little different in the mix from what we had expected at the beginning of the year.

Speaker #5: So for the year, as you've seen, that's the FX part that we adjusted in our overall guidance. It's now a half percent tailwind, and it used to be one and a half percent tailwind.

Speaker #5: And the biggest effect of that is in Q3 and in Q4. So that's not organic, so maybe it shouldn't be a concern.

Speaker #5: But just saying. Q4 growth, yeah, mostly the 20 million in deliveries that I think are shifting from that Gerald said are shifting from Q3 to Q4.

Speaker #5: So almost all semi. That's simply when the sites are ready, when the customers are ready. And of course, it's a little different in the mix from what we had expected at the beginning of the year.

Speaker #5: We're a little bit more a little bit more semi-heavy and faster-turning ACAGAV or so in the US. Still weaker than we had expected because moneys are coming out later.

Frank Laukien: We're a little bit more semi-heavy and faster turning Agilent or so in the US. Still weaker than we had expected because monies are coming out later. The ultra-high field that we are expecting in Q4 revenue, these things are never guaranteed because we have to install them. I think our success ratio of delivery and success on installations is greater than 80%. Don't get hung up on that either. The NMR business always has the ability to make it up. If one slides out, they'll try to pull in something else. We're pretty comfortable with our strong Q4 guidance, or implied guidance for Q4 at this point. I think that's simply what happens every year. We try to smooth it out a little bit, and then during the year, some customer delays or sometimes technical delays come in.

Speaker #5: And the ultra-high field that we are expecting in Q4 revenue, I mean, these things are never guaranteed because we have to install them. But I think our success ratio of delivery and success on installations is greater than 80%.

Speaker #5: But don't get hung up on that either. The NMR business always has the ability to make it up if one slides out. They'll try to pull in something else.

Speaker #5: So we're pretty comfortable with our strong Q4 guidance at this or implied guidance for Q4 at this point. I think that's simply what happens every year.

Speaker #5: We try to smooth it out a little bit, and then during the year, some customer delays or sometimes technical delays come in. So I think we'll be cool in Q4, and Q4 should be a good quarter, and Q3 should be okay.

Frank Laukien: I think we'll be cool in Q4, and Q4 should be a good quarter, and Q3 should be okay. Sequentially, not as strong as what we had expected.

Speaker #5: That's sequentially not as strong as what we had expected.

Speaker #1: And this concludes our question and answer session. I would like to turn the call back over to Joe Kostka for any closing remarks.

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

Speaker #3: Thank you for joining us today. Broker's leadership team looks forward to meeting with you at an event or speaking with you directly during the third quarter.

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 Q3. Feel free to reach out to me to arrange a follow-up. Have a good day.

Speaker #3: Feel free to reach out to me to arrange a follow-up. Have a good day.

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

Q2 2026 Bruker Corp Earnings Call

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