Bruker Bank of America Global Healthcare Conference

Gerald, welcome. Thank you. Delighted to be here.

Great. Thanks for the invitation.

Yeah. I would say with respect to the second quarter performance, we clearly outperformed on the organic order bookings performance as well as on the EPS line. We came in late, I would say, on revenue performance, which is a little later than we had expected. We have a couple of elements that contributed to that. I think one of the key areas I think we need to focus on is, talk a little bit about is the highlights of some of the order book performance. Generally speaking, we saw strength in China for the first time. Actually, in multiple quarters, we have seen some significant strength there, greater than 20% order growth. Biopharma space for us was actually quite strong across the globe, including in the U.S. The other area that I think maybe wasn't such a surprise to most investors, but was our semi-metrology business.

Parts of that business have really got remarkable growth going on right now, driven mostly by AI demand, advanced packaging, and just generally some other favorable tailwinds in that space. Order performance, quite good across most of the geographies, with the exception, I would say, of the U.S., particularly in the academic side. That's sort of somewhat continued through the third quarter. We can talk a little bit more about that if you would like on the sort of NIH funding environment. But in general, weaker funding environment in the U.S. academic side in the second quarter, and some of that also seeing some of that also in. With respect to the other elements of the business, I think generally speaking, we did well with some of our pharmaceutical product portfolio.

We did quite well, I think, in some of the acad/gov research markets, particularly for our proteomics products outside the U.S. I think just generally our diagnostics business before. In order, we saw some high single-digit growth in that space and expecting to continue to see that. So a bit of a mixed story, mostly industrial weakness and some academic U.S. weakness, but otherwise a pretty good story for us from the profitability side in the second quarter. Now to your comments on the third and the fourth ramp. On the third quarter, we did communicate for some color related to the third quarter of 2026 that we expect to see some push-outs, particularly in the semi space. That's just fortunately adding to the size of the ramp for the fourth quarter.

When we look at that, I think just generally, we are pretty comfortable with what that looks like right now. It's over EUR 1 billion worth of revenue, but we have delivered close to that in Q4 of 2024. So, when you layer on, for example, a gigahertz class NMR system into the fourth quarter of 2026, and you add some of the pushouts coming from the third quarter, it feels, from a revenue perspective, is pretty achievable. What that does for us just generally, it's going to provide a better mixed story for us compared to the prior year quarter, the fourth quarter. It's going to give us some very good volume leverage on the operating margin level. We also have some cost-saving actions that will kick in the fourth quarter.

From an operating margin EPS perspective, it feels, again, pretty achievable for us, assuming that the revenue volume performance that we are expecting to see. I think that's kind of the feels good for us. I think on the fourth quarter, it's going to be an important quarter for us from an execution perspective, but it feels quite achievable.

Well, to answer the first part of your question, we are beginning to see some signs of improvement in the funding environment in the high-end research tools market space in the U.S. on the acad/gov research sector. It's taken us quite some time to get to this place, and it is a bit disappointing that there was a funding, there's congressional approval to go forward, but we have now some sort of a large bolus of amounts that appear to be released. At the end of September, we started to see some signs of some orders as well. But I would say, most of those orders we would expect to see if funding occurs in the third quarter. We expect to see those orders in the fourth quarter.

Unfortunately, I don't think that's going to translate into any upside at all for the fourth quarter just because of the turnaround in that process. I would expect that we will, however, see an improvement in 2027 revenue performance coming out of this. And actually, this is very similar to what we saw in fiscal year 2025 with the U.S. funding. It all occurred at the end of the fiscal year, and I think it certainly helped the 2026 performance, but it didn't help that particular year. So I wouldn't expect to see much improvement in 2026 fiscal year as a result of that. But it would give us some good momentum, and certainly, we do know just from our own connection points into grant applications to the NIH and NSF that our products are being selected as a part of those grant applications.