Becton, Dickinson and Company

Hello and welcome to BD's fourth quarter and full year fiscal 2025 earnings call. At the request of BD, today's call is being recorded and will be available for replay on BD's Investor Relations website, investors.bd.com, or by phone at 800-839-2383 for domestic calls and area code plus 1-402-220-7000. 7202 for international calls. For today's call, all parties have been placed in a listen-only mode until the question and answer session. I will now turn the call over to Adam Reif, Vice President, Investor Relations.

Good morning and welcome to BD's earnings call. I'm Adam Reif, Vice President of Investor Relations. Thank you for joining us. This call is being made available via audio webcast at BD.com. Earlier this morning, BD released its results for the fourth quarter and full year fiscal 2025. The press release and presentation can be accessed on the IR website at investors.bd.com. Leading today's call are Tom Poland, BD's Chairman, Chief Executive Officer and President, and Crystal Arifas, Executive Vice President and Chief Financial Officer. Before we get started, I want to remind you that we will be making forward-looking statements. You can read the disclaimer in our earnings release and the disclosures in our SEC filings on our investor relations website. Unless otherwise specified, all comparisons will be made on a year-on-year basis versus the relevant fiscal period. Revenue percentage changes are on an adjusted FX neutral basis unless otherwise noted. Beginning October 1st, we began operating under our previously disclosed new BD segment structure that includes medical essentials, connected care, biopharma systems, and interventional, and a fifth life sciences segment comprised of biosciences and diagnostic solutions. Reconciliations between gap and non-gap measures are included in the appendices of the earnings release and presentation. With that, I am pleased to turn it over to Tom.

Thank you, Adam, and good morning, everyone. As you saw in our press release, our Q4 and full-year performance was in line with the preliminary results we announced last month. During our prepared remarks today, Chris and I will provide additional context on the drivers of our performance. I'll also provide an update on the immediate steps we are taking to accelerate our strategy as we transition into new BD. And I'll conclude with our fiscal 26 guidance and outlook on Q1, after which we'll take your questions. With that, let's jump in. Q4 revenue of $5.9 billion increased 7% and 3.9% organic. New BD delivered strong organic growth of 4.9%. accelerating 90 basis points sequentially. For the full year, record revenue of $21.8 billion increased 7.7% and 2.9% organic. New BD grew 3.9% organic. We delivered adjusted diluted EPS of $3.96 for Q4 and a record $14.40 for the full year, which represents 9.6% earnings growth, including a two-point impact from tariffs. We also returned $2.2 billion to shareholders, inclusive of a $1 billion share buyback. Earlier this morning, we announced our 54th consecutive year of dividend increases. During the quarter, we had a greater than anticipated impact in macro areas we've been closely monitoring, specifically farm systems vaccines and biosciences academic and government research. Vaccines are approximately 20% of our farm systems business. While we planned for a slowdown in Q4, further reductions in demand evolved rapidly late in the quarter, as most Q4 vaccine demand typically occurs in September and continues into Q1 and Q2. In our biosciences business, research funding remains subdued, but sales in the U.S. and EMEA continue to improve sequentially, led by strong demand for our new Facts Discover platform. In diagnostic solutions, the business returned to positive growth in the quarter. as BD BACTEC utilization continued to recover. Together, biosciences and diagnostic solutions delivered flat growth for the quarter, excluding the impact of discontinued platforms. Outside of these two areas, we delivered strong growth across a broad range of the portfolio, demonstrating new BDs attractive profile with over 90% consumables revenue and a strong cadence of new innovation. This includes high single-digit growth in BD interventional, driven by double-digit growth in PureWIC and advanced tissue regeneration. We delivered double-digit proforma growth in advanced patient monitoring, which in the first year of integration performed well ahead of our deal model and is on track to continue this momentum in fiscal 26 and beyond. In farm systems, biologics grew high single digits, driven by GLP-1s, And MMS had a record quarter for Alaris pump installations, including several new competitive wins, solidifying our leadership position now and for years to come as we complete our fleet upgrade in FY26. Our BD Excellence operating model helped to drive strong P&L leverage throughout the year. With adjusted gross margin up 140 basis points, fueling 80 basis points of adjusted operating margin expansion, while we invested in selling and innovation, which will continue to be our engine for growth in the new BD. This supported robust 9.6% adjusted diluted EPS growth, inclusive of tariffs, while we also delivered on our full-year goal to reach a record 25% adjusted operating margin. While we are navigating specific transitory market dynamics that are expected to continue into fiscal 2026, we have strong business fundamentals, high confidence in our continued long-term mid-single-digit growth profile, and a proven track record of delivering value through periods such as this. We are acting with speed to optimize our performance during this time and emerge stronger. We've already begun implementing decisive actions to accelerate our strategy as we create the new BD with a focus on boldly advancing BD excellence across our commercial and innovation organizations while identifying cost optimization opportunities to reinforce our commitment to long-term profitable growth. Let me highlight three specific initiatives underway. First, as part of accelerating our focus on commercial excellence, we're re-architecting our operating model to build a more focused, agile, vertical organization. This includes commercial teams directly aligned with each business unit to best support customer needs, drive share gains, and accelerate growth. We're also taking immediate action to expand our sales force in targeted high-growth markets, investing an incremental $30 million to capitalize in areas that either are or have the potential to grow in the high single digits or double digits. These include opportunities such as the recent VA reimbursement for PureWik at Home and new surgery innovations launching in Europe and a 15% increase in both the PI and APM sales forces. Finally, we've announced that Mike Feld's role has been expanded to include the newly created position of Chief Revenue Officer. Mike will apply his expertise in BD Excellence to accelerate our initiatives to become a best-in-class commercial organization to deliver incremental growth. Mike will remain President of Life Sciences until the close of the RMT with Waters. Second, over the last several years, we've built positions in multiple attractive markets, and are investing to capture opportunities in new product innovation. Going into FY26, we've moved nearly $50 million of corporate costs into R&D in the businesses to fuel future innovation and growth in attractive high-growth markets, such as tissue regeneration, PureWIC adjacent markets, biologic drug delivery, and connected care. Additionally, we focused investments behind planned new product launches, including our recently launched BDN-CATA AI-enabled platform that unifies BD device data into one intelligent ecosystem, and our next-generation BD PIXIS Pro medication dispensing platform, as well as new plan launches in APM, MDS, UCC, surgery, and MMS. We are pleased we also recently received 510K clearance for Hemisphere Stream, our continuous non-invasive blood pressure monitoring module. An impressive clearance in less than 30 days paves the way for commercial launch in 2026. Third and finally, we initiated a two-year, $200 million cost-out program, proactively addressing stranded corporate costs with approximately half expected this year. Before I turn it over to Chris to provide additional color on our performance, on behalf of the leadership team, I want to take a moment to thank Chris for his leadership, hard work, and dedication to BD over the past four years. I'm confident the CFO transition ahead will be seamless and wish Chris well in his new endeavors. With that, I'll turn it to Chris.