BRUKER CORP Q1 FY2025 earnings call

Frank Laukien noted Bruker had a solid start to 2025 with double-digit reported and CER revenue growth, 5.1% organic growth in the Scientific Instruments segment, and better operating margin performance. The company launched innovative products at various conferences. Discussed impact of U.S. policy changes and tariffs on revenue and operating profit margins, and mentioned mitigation actions like new pricing, cost cutting, and supply network re-engineering.

In Q1 2025, BioSpin had revenue of $208 million with mid-teens percentage CER growth, driven by strong ACA/GOV revenue, biopharma environment, preclinical imaging, and lab automation (new Chemspeed business). CALID Group had revenue of $280 million with mid-20s percentage CER growth, led by microbiology, infection diagnostics, and life science mass spectrometry. Bruker's annual revenue was $257 million, with high single-digit percentage CER revenue growth supported by inorganic growth from NanoString but offset by softness in some regions. The Bruker Scientific Instruments segment had 5.1% organic revenue growth.

Reported revenues are expected to be $3.48 billion to $3.55 billion, representing 3.5% to 5.5% growth. Organic revenue growth is expected to be 0% to 2%, with a ~1% tailwind from foreign exchange and acquisitions contributing ~2.5%. Operating margin is roughly flat year-over-year. Non-GAAP EPS is guided to be in the range of $2.40 to $2.48. Second quarter organic revenue is expected to decline in the low single digits, while constant exchange rate revenue is expected to increase in the low single digits, with non-GAAP operating margin and EPS expected to transiently decrease in Q2 but improve in the second half.

Risks include U.S. policy changes affecting academic research funding, slow release of China stimulus funding, new tariffs on pharma products, and geopolitical risks that could impact revenue and operating margins.

Q: Elaborate if there was any pull forward in the quarter because of the tariffs worries or any other worries in the market that the customers might have had? And are you baking any impact from that as a result of that pull forward? And in China, I appreciate you mentioned cancellations, but are you seeing any cancellations in the U.S. or European markets, specifically maybe around UHF gigahertz magnets?

A: There really wasn't any pull forward due to tariffs or ACA/GOV. No cancellations in U.S. or European markets around UHF gigahertz magnets seen yet, but there are delays and rerouting in some cases due to tariffs.

Q: When we think about the offsets, obviously a lot of challenges in the market today. But when we think about the offsets, the AI chips on shoring of that, the funding initiatives in Germany, maybe lower interest rates. Can you walk us through how are you thinking about some of the – some of those offsets, potentially sort of mitigating the impact maybe into the second half?

A: AI remains strong in tools, German and Korean funding initiatives are encouraging tailwinds, onshoring in various regions plays a role, and continued investments by leading companies in Taiwan and Korea are positive.

Q: Talk about the academic market, Frank, I know you're talking about academic/government, I think, down 20%, 25% this year. I guess when you look forward, Gerald mentioned that mid to high teens, earnings once these headwinds are absorbed. Are you thinking that the academic market – one of the big questions we get is, is this structural for the next few years, right, where this declines every year for the next few years? Or is it you rebase this year and then have opportunity for that piece to grow?

A: Expect U.S. ACA/GOV to be weak this year, but probably growing compared to this year next year, with some temporary factors affecting it but some potential for growth in the future.

Q: Hey, guys. Good morning. Thank you for taking my question. Agreed BEST is only 10% of the revenue, but do you expect the clinical MRI Supercon to eventually improve for Bruker given that it's taking some time for time for AI trends to impact your revenue.

A: BEST segment expected to be a slower recovery in the MRI market, with ROI business steady and superconducting materials business weaker this year but less pronounced year-over-year.