Thermo Fisher Scientific Inc

Good morning, ladies and gentlemen, and welcome to the Thermo Fisher Scientific 2026 First Quarter Conference Call. To ask a question on today's call, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I would now like to introduce our moderator for the call, Mr. Rafael Tejada, Vice President of Investor Relations. Mr. Tejada, you may begin.

Good morning, and thank you for joining us. On the call with me today is Mark Casper, our chairman and chief executive officer, and Jim Meyer, senior vice president and chief financial officer. Please note this call is being webcast live and will be archived on the investor section of our website, thermofisher.com, under the heading News, Events, and Presentations until July 22, 2026. A copy of the press release of our first quarter earnings is available in the investor section of our website under the heading financials. So before we begin, let me briefly cover our safe harbor statement. Various remarks that we may make about the company's future expectations, plans and prospects constitute forward looking statements within the meaning of applicable securities laws. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q under the heading Risk Factors. These forward-looking statements are based on our current expectations and speak only as of the date they are made. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even in the event of new information, future developments, or otherwise. Also, during this call, we will be referring to certain financial measures not prepared in accordance with generally accepted accounting principles or gap. A reconciliation of these non-gap financial measures to the most directly comparable gap measures is available in the press release of our first quarter earnings and also in the investor section of our website under the heading financials. So with that, I'll now turn the call over to Mark.

Thank you, Raf. Good morning, everyone, and thanks for joining us today for our first quarter call. As you saw in our press release, we delivered a strong start to the year. Our end markets are progressing in line with our expectations. We continue to strengthen and add to our capabilities by executing our proven growth strategy and completing the acquisition of Clario. Our progress in the quarter further advances our leadership position as the trusted partner to our customers. And as you know, we're actively managing the company, leveraging our global scale and the strength of our PPI business system to create value for our stakeholders and position our company for a very bright future. To start, let me recap the first quarter financial results. Our revenue grew 6% to $11.01 billion. Adjusted operating income grew 6% to $2.4 billion. Q1 adjusted operating margin was 21.8%, and we grew adjusted EPS by 6% to $5.44 per share. Turning to our end markets, performance played out as we expected. I'll briefly cover each end market, starting with pharma and biotech. We delivered mid-single digit growth during the quarter. Performance was driven by strength in our bioproduction business, our clinical research business, and our research and safety market channel. In academic and government, revenue declined low single digits, driven by muted macro conditions in the US and China. In industrial and applied, growth was flat during the quarter. Growth was led by our chromatography and mass spectrometry business, as well as the research and safety market channel. Finally, in diagnostics and healthcare, revenue declined in the mid single digits. we delivered another quarter of strong growth in our transplant diagnostics business. As I look ahead, we see our end markets progressing as expected in our original guidance. When I think about the broader macroeconomic environment, there is added complexity, of course, given the conflict in the Middle East, and we expect this to create some modest level of inflationary pressure. Our customers remain focused on advancing their priorities and we expect our end markets to prove resilient. We're well positioned to navigate through this period, leveraging our experience management team, global scale, and the strength of our PPI business system. Let me now provide some highlights from our growth strategy this quarter. As a reminder, our growth strategy consists of three pillars, high-impact innovation, our trusted partner status with customers, and our unparalleled commercial engine. Starting with the first pillar of our growth strategy, high-impact innovation. We had an excellent start to the year. Our innovation enables customers to advance science and improve lives around the world. During the quarter, we launched a number of new technologies across our business that strengthen our industry leadership and help customers break new ground in their important work. In our analytical instruments business, we introduced the thermoscientific Glacios III CryoTEM, a next-generation cryotransmission electron microscope that features AI-enabled workflows. What's really exciting about this launch is that it further democratizes access to cryo-EM through the robustness of the instrument that allows its installation in a broader range of lab spaces, bringing high-end structural biology capabilities to more customers. In mass spectrometry, we introduced the thermoscientific TSQ-CIRTIS triple-quad mass spectrometer. This advanced platform delivers faster, high-quality results helping customers enhance productivity and reliability in pharmaceutical and applied markets. We also launched a thermoscientific niton XL5e handheld XRF analyzer, which is a great addition to our handheld portfolio. This new instrument enables industrial and applied customers to identify materials in the field, helping them drive productivity and speed decision-making. In life science solutions, we launched the Gibco CTS COPLIO, fill and finish system. This automated system helps address manual fill and finish challenges in cell therapy manufacturing, enhancing productivity and reliability while enabling scalable manufacturing. In laboratory products, we introduced the FluidEase Pro ClipTip electronic pipette, which improves precision and efficiency in everyday lab work, helping customers generate more reliable results. Let me now cover the remaining pillars of our strategy. Our trusted partner status provides us with unique insights that guide our strategy and continually strengthen our capabilities for our customers. At the same time, our industry-leading commercial engine enables us to deliver those at scale. During the quarter, we continue to strengthen our leading position in both of these areas. Earlier in the year, we announced a strategic collaboration with NVIDIA, combining our leadership and laboratory technologies with Navidius advanced AI capabilities. The team is making great progress working together towards the commercialization of new workflow solutions that will enhance scientific instrumentation and help customers work faster, improve accuracy, and get more value out of each experiment. To further strengthen our U.S. drug product manufacturing capabilities for our pharma and biotech customers, we formed a strategic collaboration with SHL Medical, a leading provider of advanced drug delivery systems. We will be leveraging our recently acquired Richfield, New Jersey, sterile fill finish site to offer fully integrated sterile fill finish and device assembly solutions for our customers. Another great example of our trusted partner status is the continued adoption of our unique accelerated drug development offering, which combines our leading capabilities in pharma services and clinical research. This competitive differentiator is translating into strong performance and share gains in our clinical research business, which delivered strong revenue and authorizations growth once again in the quarter. We also continue to invest in our commercial engine to ensure we're meeting the current and future needs of our customers. Let me share an example. We opened a new Cryo-EM drug discovery center in San Francisco. It provides pharma and biotech customers with hands-on access to further accelerate adoption of our advanced Cryo-EM technologies to advance drug development. So wrapping up on our growth strategy, we made great progress during the quarter, and we're continuing to advance our leadership position. Let me now turn to capital deployment. We continue to successfully execute our disciplined approach to capital deployment, which is a combination of strategic M&A and returning capital to our shareholders. In late March, we completed the acquisition of Clario and had a terrific kickoff with our new colleague. Clario is a market leader in digital endpoint data solutions. This technology business is an outstanding strategic fit and highly complimentary to our clinical research capabilities. It enhances our ability to serve pharma and biotech customers by enabling deeper clinical insights and helping improve the productivity of the drug development process. This acquisition is a great example of the value that our proven M&A strategy creates for the company. Clario further strengthens Thermo Fisher's position as the trusted partner to pharma and biotech customers, delivering important benefits to enable their success. And the acquisition has very attractive return profile for our shareholders. We're also very pleased with the progress we're making with our filtration and separation business, which we acquired from Soventa. I had the chance to visit the team in Germany recently. The business is performing very well. The integration is going smoothly. customer enthusiasm for these capabilities is very high. Finally, in terms of return of capital during the quarter, we repurchased 3 billion of shares and increased our dividend by 10%. Let me now give you a brief update on our PPI business system because of its relevance to our success. PPI is deeply embedded in our culture and empowers colleagues across the company to operate with agility. The mindset of finding a better way every day is a core part of our culture and gives me great confidence in our ability to manage through the current environment. We have a proven track record of actively managing the company and consistently delivering strong operational performance. As a reminder, a few areas of focus for the PPI business system in 2026 are driving an accelerated level of cost productivity, deploying AI at scale to run the company better, and the continued mitigation of tariffs. Our teams are proactively working to mitigate any potential impacts from higher inflation given the current macro environment. Now I'd like to review our 2026 guidance at a high level. We are raising our guidance for the full year on the top and bottom line, incorporating the positive impact of Clario and the strong first quarter earnings performance. We're raising revenue guidance from a range of $46.3 billion to $47.2 billion to a new range of $47.3 billion to $48.1 billion, which represents 6% to 8% reported revenue growth over 2025, and continues to assume 3% to 4% organic revenue growth for the year. And we expect adjusted earnings per share to be in the range of $24.64 to $25.12, which represents 8% to 10% growth over 2025, an increase from our original guidance of $24.22 to $24.80. Jim will take you through the details in his remarks. So to summarize our key takeaways, we delivered a strong start to the year. We're raising our full year revenue and adjusted EPS guidance. Our end markets and our business are progressing in line with our expectations, and we're on track to deliver a strong year. We've advanced our long-term competitive position in the quarter with high-impact innovation and important strategic collaborations. We're incredibly excited about the addition of Clario to our capabilities, and we'll continue to leverage the strength of our PPI business system to create value for our stakeholders while building an even brighter future for our company. With that, I'll turn the call over to Jim.