Danaher Corporation 2026 Q3 Earnings Call

Good morning, everyone, and thanks for joining us on the call. With us today are Julie Sawyer Montgomery, our President and Chief Executive Officer, and Matt Gugino, our Executive Vice President and Chief Financial Officer. I'd like to point out that our earnings release, quarterly report on Form 10-Q, the slide presentation supplementing today's call, the reconciliations, and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call, and a note containing details of historical and anticipated future financial performance are all available on the investors section of our website, www.danaher.com, under the heading Quarterly Earnings. The audio portion of this call will be archived on the investors section of our website later today under the heading Events and Presentations and will remain archived until our next quarterly call. A dial-in replay of this call will also be available until November 4, 2026.

During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. Our Form 10-Q and the supplemental materials I referenced describe additional factors that impacted year-over-year performance. Unless otherwise noted, all references in these remarks and supplemental materials to company-specific financial metrics relate to results from continuing operations in the third quarter of 2026, and all references to period-to-period increases or decreases in financial metrics are year-over-year. We may also describe certain products and devices which have applications submitted and pending for certain regulatory approvals or are available only in certain markets. During the call, we will make forward-looking statements within the meaning of our federal securities laws, including statements regarding events or developments that we believe or anticipate will or may occur in the future.

These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements except as required by law. With that, I'd like to turn the call over to Julie.

Thank you, Rachel, and good morning, everyone. Before we get into the quarter, I'd like to share my perspective on Danaher today and the opportunity ahead as I begin this next chapter as CEO. The opportunity for Danaher is straightforward: to become the defining leader in life sciences and diagnostics, a company that unambiguously gains share, delivers sustainable, profitable growth, and helps our customers improve outcomes for patients around the world. The foundation we built at Danaher is strong. We operate leading businesses, foster deep customer relationships, and empower talented people, all enabled by the Danaher Business System. At the same time, growth over the past several years has not consistently reflected the full potential of our portfolio. We've navigated significant changes in our markets, but regardless of the environment, we hold ourselves to a higher standard.

We see a meaningful opportunity to accelerate sustainable core revenue growth, gain share more consistently, and more fully translate the strength of our portfolio into differentiated performance. I'm confident in what we've built, and I'm energized by what I've seen across Danaher these last few months. Our focus now is strengthening execution and delivering on that potential. Recently, I had a conversation with one of our executives preparing for a customer meeting related to Alzheimer's disease. What started as a discussion about how one of our businesses could help address a particular part of that customer's challenge quickly expanded to cover the roles seven different operating companies could play across discovery, AI-enabled target selection, laboratory automation, process development, scale-up, and diagnostic testing. When the challenge is Alzheimer's disease, speed matters, both to the scientists working to understand it and the families waiting for answers. That conversation reinforced something important.

Our customers don't think about their challenges through the lens of our organizational structure. They have a problem to solve, and they want the best partnership and solutions we can bring them. I see this as critical to Danaher's next chapter, as some of our greatest opportunities sit at the intersections of our businesses. We will preserve what makes our operating company structure advantage, the customer intimacy, the accountability, while making it easier to bring the full power of Danaher to our customers. Our foundation and the power of the Danaher Business System have given us leadership positions across the life sciences and diagnostic markets and a unique role in helping accelerate the translation of scientific discovery into human impact. Our life science businesses enable discovery, our biotechnology businesses help turn those discoveries into scaled and accessible therapies, and our diagnostics businesses help guide treatment.

Together, Danaher spans a broad path from experiment to patient with DBS adding speed and operating discipline at scale. We call that innovation at the speed of life, helping close the distance between human need and the science that answers it. As we enter this next chapter, we'll accelerate that ambition by focusing on four strategic priorities: commercial excellence, innovation, talent, and effective capital allocation. Each is important, but our most immediate opportunity is commercial execution. Danaher has successfully repositioned its portfolio with three platforms across the life sciences and diagnostics markets. With that portfolio transformation largely complete, our focus is shifting from reshaping the portfolio to delivering more growth from the businesses we own. We will focus our leadership attention on exceptional commercial execution, enhancing our pursuit of unambiguous share gain across Danaher. We will drive consistency and rigor and commercial execution across our businesses.

This means simplifying and strengthening our commercial processes and empowering our leaders to make more entrepreneurial decisions. We also have an opportunity to make it easier for our customers to take advantage of the full power of Danaher. Our operating companies have important brands and deep customer relationships. These will remain fundamental to how we compete, but Danaher has tremendous scale and breadth, and we can do more to use that advantage. That means making the broader strength of our portfolio and capabilities more accessible to customers. We have already taken practical steps to show up as a more connected Danaher. In diagnostics, for example, we are successfully deepening customer relationships by bringing leaders from across our businesses together with key customers to look across the portfolio, better understand their priorities, and identify where a more coordinated approach can create additional value.

We do this by having our key diagnostics leaders in the same room at the same time with our key customers to understand their biggest pain points and where we can drive incremental value. This approach has generated meaningful incremental revenue opportunities and is helping drive share gains across our diagnostics businesses. As we bring more of Danaher to our customers, we can also become more systematic about connecting capabilities across our businesses to solve more customer needs. Aldevron and Cytiva's recent collaboration to deliver an end-to-end mRNA solution is a great example, helping streamline our customers' development processes while meaningfully accelerating timelines. Ultimately, our commercial strategy is straightforward. Execute better and more entrepreneurially, show up together as Danaher for our customers, and connect our capabilities where we can create greater value.

We will make it easier for customers to access the full strength of Danaher and look to us when trying to solve their most important challenges. Our second priority is delivering more innovation. Danaher is already at the forefront of innovation, but I believe strengthening our innovation capabilities represents one of our largest opportunities to accelerate long-term growth. Delivering on our brand promise, innovation at the speed of life, means we will be deliberate and strategic about where we invest in R&D and ensure we appropriately allocate resources behind our best ideas. That means more closely linking strategy and R&D investments, concentrating resources behind the highest potential initiatives, and working more closely across our businesses and external partners to move promising innovations faster.

We will also fund transformational opportunities at the enterprise level when we believe Danaher has a clear right to win and larger investment can create meaningful competitive advantage. These decisions will require clear choices and greater enterprise-level conviction about where we can create the most value. Innovation cycles take time, but over the long term, we believe this more focused approach can support higher and more durable core revenue growth while turning more scientific discoveries into meaningful human impact. To me, this is the heart of innovation at the speed of life, helping promising science move faster towards the patients who need it. Our third priority is being the home and destination for exceptional talent. We believe our ability to attract and develop exceptional talent in scientific, AI, commercial, and operating disciplines will increasingly set us apart from competitors.

We also need to develop and deploy our people more intentionally against Danaher's highest priority growth and innovation opportunities. Danaher has given me that kind of exposure in my own career, learning DBS and then applying it across commercial, R&D, and business leadership. I want us to continue to create exceptional opportunity for the next generation of leaders. As we evolve DBS for the AI era, I believe we can create an even more compelling place for the best talent in our industry. Our fourth priority is being more disciplined with our capital and resources. M&A and capital deployment have been essential drivers of Danaher's growth and will remain so. We will maintain the robust investment criteria that has served us well for many decades while bringing strategic clarity and discipline to how we allocate capital and resources.

We are focused on deepening our positions in attractive markets and identifying strategically compounding areas that build from the strengths we already have in our businesses. Our objective is to deliver high returns on our investments with greater consistency while positioning Danaher for sustainably differentiated and profitable growth. Across each of these priorities, there is a common idea. We create more value by building a stronger, more connected company. That doesn't mean changing what makes our operating companies successful. It means preserving their customer intimacy and accountability while making it easier to share ideas, capabilities, talent, and resources across Danaher, and using our scale where it gives us an advantage. AI is one capability we believe can help us do just that. We believe the combination of AI and DBS will be an important competitive advantage.