good morning ladies and gentlemen and welcome to the thermo fisher scientific 2025 fourth quarter conference call during the presentation you can register a question by pressing star followed by one on your telephone keypad if you change your mind please press star followed by two on your telephone keypad i would now like to introduce our moderator for the call mr raphael tojada vice president investor relations mr tojada you may begin the call good morning and thank you

for joining us on the call with me today is mark casper our chairman president and chief executive officer and stephen williamson 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 april 22nd 2026. a copy of the press release of our fourth quarter and full year 2025 earnings is available in the investor section of our website under the heading financials so before we begin let me briefly cover 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 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 GAAP, a reconciliation of these non-GAAP financial measures to the most directly comparable gap measures is available in the press release of our fourth quarter and full year 2025 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 fourth quarter call. As you saw in our press release, we delivered a strong year, capped off by an excellent fourth quarter. Our results reflect outstanding execution from the team, the strength of our proven growth strategy, and excellent operational performance enabled by our PPI business system. Looking to the year ahead, we entered 2026 from a position of strength as the market leader serving attractive end markets. Our growth strategy is resonating with customers, and our PPI business system will enable us to continue to deliver excellent operational performance. To recap our 2025 financial performance, starting with the quarter. Revenue grew 7% year-over-year to $12.21 billion. Adjusted operating income grew 6% to $2.88 billion. Adjusted operating margin was 23.6% and adjusted EPS grew 8% to $6.57 per share. Now turning to our full year results, revenue grew 4% to $44.56 billion. Adjusted operating income grew 4% to $10.11 billion. Adjusted operating margin was 22.7% and adjusted EPS grew 5% to $22.87 per share. As I reflect on the year, first, the environment evolved differently than everyone had envisioned entering 2025. We actively managed the company and our team responded with agility, effectively managing tariffs, and the U.S. policy dynamics to deliver a very strong year. As a trusted partner, we worked closely with our customers, helping them navigate the landscape and enabling their success let me now turn to our performance by end market and provide some context on how the quarter and full year played out starting with pharma and biotech we delivered high single digit growth in q4 and mid single digits for the full year performance in the quarter was led by continued strong growth in our bioproduction business business, as well as our research and safety market channel. As expected, our clinical research business continues to strengthen, delivering mid-single digits growth in the quarter. For the full year, revenue growth was broad-based and was highlighted by strong performance in bioproduction, research and safety market channel, analytical instruments, and pharma services businesses. In academic and government, throughout the year, performance and market was impacted by the macro conditions in the U.S. and China. We declined in the low single digits during the quarter and for the full year. In industrial and applied, we declined in the low single digits during the quarter and grew in the low single digits for the full year. Growth during the year was highlighted by strong performance in our research and safety market channel, as well as our electron microscopy business. Finally, in diagnostics and healthcare, we delivered low single digit growth in q4 reflecting good performance across our specialty diagnostics businesses for the full year growth in this end market was flat with strong contributions from our transplant diagnostics and immunodiagnostics businesses thanks to our proven growth strategy and our team's excellent execution we delivered a strong finish to the year across our end markets and continue to drive meaningful share gain let me now turn to our growth strategy as a reminder our growth strategy consists of three pillars. High-impact innovation, our trusted partner status with customers, and our unparalleled commercial engine. In 2025, we meaningfully advanced the position of the company, becoming even more relevant for our customers and enhancing our competitive position. Let me call out some key highlights for the year, starting with innovation. 2025 was another outstanding year of innovation as we launched a number of high-impact products across our businesses that strengthen our industry leadership and enable our customers to accelerate breakthroughs and enhance their productivity. In chromatography and mass spectrometry, we launched the thermoscientific Orbitrap Astral Zoom. Building on the success of the Astral Mass Spectrometer, Astral Zoom delivers even greater sensitivity, speed, and depth of coverage, enabling researchers to uncover new biological insights and advance precision medicine. customer adoption and feedback have been extremely strong as the platform represents a significant leap forward in mass spectrometry enabling researchers around the world to accelerate discovery and advance the pace of scientific breakthroughs in bioproduction we expanded our single-use portfolio with the launch of the thermoscientific five liter dyna drive single use bioreactor offering pharma and biotech customers increased workflow efficiencies and the ability to seamlessly scale up manufacturing of new therapies. In electromicroscopy, we delivered a series of high-impact innovations across life sciences and advanced materials. This included the thermoscientific Cryo-5, Cryo-TEM, which is advancing structural biology by enabling faster, higher-resolution insights to support drug discovery and development. In the fourth quarter, we launched the thermoscientific the KELIOS MX1 plasma-focused ion beam SEM, a fully automated semiconductor analysis system designed to accelerate time-to-data for yield ramp and FAB process control. In clinical next-gen sequencing, it's great to see the growing application of our ion-torrent Encomind DX target test as a companion diagnostic. During the quarter, this technology received another FDA approval, this time as a companion diagnostic for buyers, new therapy targeted for certain patients with non-small cell lung cancer. In clinical diagnostics, we also achieved US 510 clearance for the XEN system, a first-of-its-kind automated platform that enables earlier and more confident diagnosis for patients with multiple myeloma and related disorders. So another spectacular year of innovation, and we also have an exciting pipeline of launches in 2026 that positions us well for the future. Let me turn to our trusted partner status and industry-leading commercial engine, which we continue to strengthen in 2025. Our trusted partner status with customers has been built over many years by anticipating, understanding, and meeting their needs. Increasingly, customers are relying on us, not just for technologies and services, but for our expertise and deep understanding of how to apply them to enable their success. We help our customers accelerate innovation and improve their productivity. You've heard me talk about our Accelerator drug development solution throughout the year. It's a terrific example of one of our unique capabilities. As a reminder, Accelerator is our integrated CDMO and CRO offering that brings together the strengths of our pharma services and clinical research businesses to help customers reduce development timelines, improve decision making, and enhance returns on on their R&D investment. In 2025, we secured meaningful wins for our clinical research and pharma services businesses and continue to see outstanding customer adoption. During the year, we also expanded and deepened strategic partnerships that create value for our customers and our company. This included a technology alliance with the Chan Zuckerberg Institute for Advanced Biological Imaging to develop new technologies to better visualize human cells. We also announced a strategic collaboration with OpenAI, aimed at increasing our use of artificial intelligence at the company. This will improve productivity across our operations and also allow us to embed AI capabilities in our products and services to accelerate scientific breakthroughs and advance the drug development process. In addition, we continue to expand our global footprint to better support customers. During the fourth quarter this included the expansion of our bioprocess design centers in Asia with the opening of a new site in India. So as you can see it was another excellent year of advancing our growth strategy. Let me now turn to capital deployment. We continue to successfully execute our proven capital deployment strategy which is a combination of strategic M&A and returning capital to shareholders. 2025 was a very active year as we advanced our strategy and added exciting new capabilities that further strengthen our long-term competitive position and create value for all of our stakeholders. During the year, we deployed approximately $16.5 billion, including committing $13 billion to M&A and returning $3.6 billion to shareholders through stock buybacks and dividends. In terms of M&A, we completed the acquisition of our filtration and separation business from Solventum. The addition of filtration is a natural extension of our bioproduction capabilities, where we have leadership in cell culture media and single-use technologies, along with a rapidly growing purification business. Our pharma and biotech customers see real value in Thermo Fisher offering these filtration capabilities for their manufacturing processes. The integration is going smoothly, and our new colleagues are thrilled to be part of Thermo Fisher Scientific. This year, we also expanded our U.S. drug product manufacturing footprint through the acquisition of Sanofi's state-of-the-art sterile fill finish site in New Jersey. Both of these acquisitions enhance our ability to support our customers' growing production needs. During the fourth quarter, we also announced a definitive agreement to acquire Claria. The company is a market leader in digital endpoint data solutions, one of the fastest growing areas and an essential capability in drug development and clinical research. In 2025, the business generated approximately $1.25 billion in revenue. Its differentiated technology and deep medical expertise together enable unique capabilities in generating and delivering digital endpoint data for clinical trials. The business is an outstanding strategic fit, highly valued by our customers, and complementary to our clinical research capabilities. By adding Clario's high growth capabilities, over time, we will be able to deliver even deeper clinical insights for our customers and further accelerate the digital transformation of clinical research. This is an incredibly exciting opportunity to help our pharma and biotech customers improve the return on investment of the drug development process. Financially, the transaction has an attractive double-digit return profile, is expected to be accreted to organic revenue growth and to adjusted operating margin. We expect it to be accreted to adjusted EPS by approximately 45 cents in the first 12 months of ownership, and we expect to close the transaction by the middle of 2026. So overall, an active and high-impact year of capital deployment. Let me now turn to our PPI business system. In 2025, PPI continued to be a critical enabler of our performance. Throughout the year, we leveraged PPI to actively manage our cost base, drive operational excellence, and deliver strong earnings growth, while continuing to invest to strengthen our long-term competitive position. PPI enabled us to operate with agility and discipline as we navigated the environment and delivered excellent results for our customers and shareholders. PPI is deeply embedded in our culture and empowers colleagues across the company to find a better way every day. That's why we're so we're also increasing increasingly using artificial intelligence into PPI which will further enhance its impact across the organization. The combination is helping us improve how we serve customers, streamline internal processes, and operate the company more effectively, strengthening execution today and positioning us well for the future. Before I wrap up on 2025, I want to briefly touch on the progress we made with our corporate social responsibility priorities. Part of our mission-driven culture is a focus on making a positive impact on society by supporting our communities and being a good steward of our planet. You can read more about this on our website, but I'll share a couple of highlights. In terms of the environmental stewardship, we increased the use of renewable energy across our global operations and expanded the number of sites achieving zero-waste certification, keeping us on track with our long-term sustainability commitments. We also continue to launch more sustainable products to help our customers achieve their own sustainability goals. In our communities, we remain focused on expanding access to STEM education and advancing global health equity. In addition, our engaged colleagues and community action councils made a huge impact around the world through their volunteer activities throughout the year as i reflect on 2025 i'm very proud of what our team accomplished and deeply grateful to our colleagues for their unwavering passion for our mission which fuels our success so let me now turn to guidance steven will outline the assumptions that factor into the guidance for the upcoming year so let me quickly cover the highlights in 2026 we will continue to actively manage the company leveraging the ppi business system to enable excellent operational performance and very strong earnings growth. We are also well positioned to continue our share gain momentum. We are initiating a 2026 revenue guidance range of $46.3 billion to $47.2 billion, which represents four to six percent reported revenue growth over 2025 and assumes three to 4% organic growth for the year. We are initiating our earnings guidance with an adjusted EPS range of $24.22 to $24.80 per share, which represents 6% to 8% growth in adjusted earnings per share. So to summarize our key takeaways, we delivered a strong 2025 capped off by an excellent fourth quarter we delivered another year of excellent operational performance and share game reflecting the active management of the company the strength of our proven growth strategy and the power of our ppi business system we advanced our long-term competitive position throughout the year with high impact innovation strategic partnerships and disciplined capital deployment and we enter 2026 with strong momentum our growth strategy is resonating with customers and positions us for a very bright future. With that, I'll turn the call over to our CFO, Stephen Williamson. Stephen?

Thanks, Mark, and good morning, everyone. As you saw in our press release, we had a great Q4 to cap off the year. Throughout the year, the team effectively navigated the external environment and remained focused on delivering for all of our stakeholders. I'll take you through an overview of our fourth quarter and full-year results for the total company, then provide color on our four business segments, and I'll conclude by providing our 2026 guidance. Before I get into the details of our financial performance, let me provide you with a high-level view of how the fourth quarter played out versus our expectations at the time of our last earnings call. In Q4, we delivered 3% organic growth and 8% growth in adjusted EPS. It was another quarter of excellent execution. These results are significantly ahead of the assumptions at the midpoint of our prior guidance on both the top and bottom line. Q4 revenue was approximately $250 million a head, driven by 1% stronger organic revenue growth and a stronger-than-expected tailwind from FX. Adjusted EPS in Q4 was $0.14 a head. This was comprised of $0.25 from very strong operational performance, partially offset by $0.11 of higher FX headwind on the bottom line. The FX impact was driven by continued volatility in rates during the quarter due to trade tensions, and represented an incremental 65 basis points of headwind to margins relative to our prior guidance. So as I said, a great Q4 with a strong beat to cap off the year. Let me now provide you with some additional details on our Q4 and full year 2025 performance. Starting with earnings per share. In the quarter, adjusted EPS grew by 8% to $6.57. For the full year, we delivered adjusted EPS of $22.87, up 5% compared to last year. Gap EPS in the quarter was $5.21, and for the full year, it was $17.74. On the top line, Q4 reported revenue grew 7% year over year. The components of our reported revenue change included 3% organic growth, a 2% contribution from acquisitions, and a 2% tailwind from foreign exchange. For the full year 2025, reported revenue growth increased 4%, organic growth was 2%, and both acquisitions and FX were a 1% tailwind. Turn to our organic revenue performance by geography. In Q4, North America grew low single digits, Europe grew mid-single digits, and Asia Pacific grew low single digits with China declining low single digits. For the full year, North America grew low single digits, Europe grew mid single digits, and Asia Pacific grew low single digits with China declining mid single digits. With respect to our operational performance, we delivered $2.88 billion of adjusted operating income in the quarter, an increase of 6% year over year. An adjusted operating margin was 23.6%, 30 basis points lower than Q4 last year, which includes over 100 basis points of headwind from tariffs and related FX. For the full year, we delivered $10.11 billion for adjusted operating income, a year over year increase of 4% versus 2024. An adjusted operating margin was 22.7%, 10 basis points higher than the prior year, which also includes a headwind from tariffs and related FX of over 100 basis points. Throughout the year, our active management of the business and the power of our PPI business system enabled us to effectively manage the unexpected macro headwinds and continue to grow our adjusted operating income and expand our margins. I'm proud of how the team stepped up this year to enable these results. total company adjusted gross margin in the quarter was 41.8 percent and for the full year it was 41.7 the drivers of gross margin are similar to those of adjusted operating margin moving on to the details of the pnl adjusted sgna in the quarter was 15.3 percent of revenue down 80 basis points for the full year it was 15.9 percent of revenue down 40 basis points total r d expense was 357 million in q4 and 1.4 billion for the full year up one percent year over year reflecting our ongoing investments in high impact innovation r d as a percent of our manufacturing revenue for the year was seven percent looking at results below the line our q4 net interest expense was 107 million dollars net interest expense for the full year was 426 million dollars the adjusted tax rate in q4 was 10.5 percent and 10.4 percent for the full year an average diluted shares with 377 million in q4 6 million lower year over year driven by share repurchases net of option dilution turning to free cash flow on the balance sheet full-year cash flow from operations with 7.82 billion dollars and free cash flow was $6.34 billion after investing $1.48 billion of net capital expenditures. Cash flow was slightly lower than we'd assumed in the prior guide, largely driven by temporary impacts in working capital and the timing of cash taxes. During 2025, we continued to successfully execute our capital deployment strategy, deploying approximately $16.5 billion in 2025. This This includes $4 billion for the acquisitions of our filtration and separation business from Solventum and the sterile fill finish site from Sanofi earlier in the year. Then in Q4, we announced a definitive agreement to acquire Clario for approximately $9 billion in cash plus potential future performance-based payments. We expect to complete the transaction by the middle of 2026, at which point the business will become part of our laboratory products and biopharma services segment. In 2025, we also deployed $3.6 billion to the return of capital to shareholders, $3 billion of share buybacks, and approximately $600 million of dividends. We ended the year with $10.1 billion in cash and short-term investments, and $39.4 billion of total debt. A leverage ratio at the end of the year was 3.5 times gross debt to adjusted EBITDA and 2.6 times on a net debt basis. In concluding my comments on our total company performance, adjusted ROIC was 11.3%, reflecting the strong returns on investment that we're generating across the company. Now provide some color on the performance of our four business segments. In Life Science Solutions, Q4 reported revenue in this segment increased 13% versus the prior year quarter, and organic revenue growth was 4%. Growth in this segment was led by a buyer production business, which had another quarter of excellent growth. For the full year, reported revenue increased 8%, and organic revenue growth was 3%. Q4 adjusted operating income for Life Science Solutions increased 10%, and adjusted operating margin was 35.5%, down 110 basis points versus the prior year quarter. During Q4, we delivered very strong productivity and good volume leverage, which was more than offset by unfavorable mix strategic investments and the expected impact from the acquisition of our filtration and separation business for the full year adjusted operating income increased eight percent and adjusted operating margin was 36.3 down 10 basis points versus 2024. in the analytical instrument segment for both q4 and the full year reported revenue increased one percent and organic revenue growth was flat growth in the quarter was led by a chromatography and mass spectrometry business in the segment q4 adjusted operating income decreased 12 percent adjusted operating margin was 26.3 down 420 basis points versus the year ago quarter the majority of the year over year margin change was driven by the impact of tariffs and related fx outside of that impact strong productivity was partially offset by strategic investments an unfavorable mix. For the full year, adjusted operating income decreased 11 percent and adjusted operating margin was 23 percent, 320 basis points lower than 2024. Tension specialty diagnostics in Q4 reported revenue grew 5 percent year-over-year and organic revenue growth was 3 percent. In Q4, growth in this segment was led by our clinical diagnostics, transplant diagnostics, and immunodiagnostics businesses for the full year reported revenue increased four percent and organic revenue growth was two percent q4 adjusted operating income for specialty diagnostics increased 19 and adjusted operating margin was 26.6 300 basis points higher than q4 2024 during the quarter to deliver good productivity and volume leverage and have favorable mix which is partially upset by headwinds from foreign exchange for the full year adjusted operating income was eight percent higher than 2024 and adjusted operating margin was 26.9 percent an increase of 120 basis points versus the prior year and finally laboratory products and biopharma services segment reported revenue increased seven percent and organic revenue growth was five percent with broad-based strengths across our research and safety market channel and our pharma services and clinical research businesses For the full year, reported revenue grew 4%, and organic revenue was 3% higher year-over-year. Q4 adjusted operating income in the segment increased 12%, and adjusted operating margin was 14.5%, 50 basis points higher than Q4 2024. In the quarter, we delivered very strong productivity and good volume leverage, which was partially offset by unfavorable mix, strategic investments, and headwinds foreign exchange. For the full year, adjusted operating income increased 8%, and adjusted operating margin was 14%, 70 basis points higher than 2024. Turning now to guidance, as Mark outlined, we're initiating a 2026 revenue guidance range of $46.3 billion to $47.2 billion, and an adjusted EPS guidance range of $24.22 to $24.80, representing 6% to 8% growth. The guidance assumes 3% to 4% organic revenue growth, a $300 million revenue tailwind from foreign exchange, and 50 basis points of adjusted operating margin expansion. All of this will enable a really strong 6% to 8% growth in adjusted EPS. This guidance is consistent with the financial framing for 26 and 27 that we shared with you back on our Q2 earnings call. It reflects a continued improvement in our organic growth in 26, coupled with very strong earnings growth. The strength of our guidance reflects our industry-leading position, our proven growth strategy, and the power of our PPI business system. Let me now provide some detailed context behind the guide. The midpoint of our guidance assumes organic revenue growth to slightly above 3%. This is a step up from 2025. We think this is appropriate to start at 3% at the beginning of the year, and as we execute through 2026 we can retire risk as we go and progress higher in the range as is our normal practice we've not included any future acquisitions or advantages within our guidance the guide therefore does not include the benefit of the pending acquisition of clario as a reminder we expect this deal to close by the middle of 2026 should that be the case we would expect 20 to 25 cents of incremental adjusted eps for this year reflecting the strongly accretive nature of the acquisition. That would represent roughly one additional point of adjusted EPS growth for 2026, taking the total company growth into the range of seven to nine percent. In terms of the macro environment, our guidance is based on the tariffs that are in place as up today. It doesn't contemplate any future changes in tariffs, nor their potential impact on FX rates. Should additional tariffs be levied, as we did last year, we will act with speed and scale to minimize them and provide our usual level of transparency as to their impact. The guidance includes 600 million dollars of inorganic revenue from the acquisitions closed in 2025. In that inorganic period, these acquisitions are expected to contribute 60 million dollars of adjusted operating income, the math of which adds a 20 basis point headwind to adjusted operating margins in 2026 after factoring in the financing costs they represented seven cents of adjusted eps solution for 2026. these acquisitions are progressing well versus ideal model expectations we're in the integration and investment phase in 2026 which is setting us up to deliver strong accretion and very attractive returns going forward to help you with your modeling here are a few additional assumptions behind the guide we expect approximately 500 million dollars of net interest expense in 2026 we assume that the adjusted income tax rate will be 11.5 percent in 2026 largely driven by the increased earnings we're expecting between 1.8 and 2 billion dollars of net capital expenditures in 2026 the increase over 25 is driven by our investment in u.s manufacturing in terms of free cash flow we're expecting that to be in the range of 6.8 billion dollars to 7.3 billion dollars for the year in terms of capital employment we're assuming three billion dollars of share buybacks which were already completed in january we estimate the full year average diluted share count will be between 370 and 375 million shares i'm assuming we'll return approximately 700 million dollars of capital to shareholders this year through dividends then finally i wanted to touch on phasing for q1 embedded in the guidance is the assumption the Q1 organic revenue growth will be a couple of points lower than the full year 26. This is largely driven by selling days and the expected phasing of our revenue in our pharma services business over the course of 2026. And we're expecting low single digit adjusted EPS growth in Q1. So in conclusion, Q4 capped off a very successful 2025. The team is focused on continuing to maximize share gain, delivering very strong earnings growth, and generating great returns from our capital deployment, all to enable an excellent 2026 and advance our strategy for an even brighter future. With that, I'll turn the call back over to Mark.

Thanks, Stephen. So before we turn to Q&A, I just want to say a few words. As you know, Stephen will retire at the end of March. Let me start with thank you to Stephen for all of your contributions to the success of Thermo Fisher and the deep friendship we have developed over the past 25 years and let me say a heartfelt congratulations on a spectacular career at Thermo Fisher including being our CFO for the past 10 years. You have played such an active leadership role in our growth and success and we're all very grateful. What is both so cool and so important is your consistent passion for developing people and also in building a world-class finance function. I'm thrilled to have opportunity to work with Jim Meyer, who will be taking the reins as CFO in March, having spent 17 years at the company. Stephen, on behalf of all of your colleagues and stakeholders of Thermal Fisher, thank you and congratulations. We wish you a wonderful retirement. And Jim, congratulations

on your promotion. Thanks a lot for those incredibly kind words. It's been an honor to be part of this amazing company. I'm really excited about my next chapter and I'm also excited about the continued success of Thermo Fisher with Jim as the CFO. Let me turn it back

to Raph to start the Q&A. Operator, we're ready for the Q&A portion of the call. Thank you. To

ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. In order to allow everyone in the queue an opportunity to address the thermo fisher management team please limit your time on the call to one question and only one follow-up if you have any additional questions please return to the queue our first question comes from michael riskin from bank of america your line is now open michael please go ahead

great thanks for taking the question and uh first off um i'll mirror mark's comments congrats stephen uh been great run it's been a pleasure working with you and wish you all the best going forward. Mark, maybe I'll start with a high-level one on the guide. As you laid out, you guys had a framework previously that you talked to, and the guide falls in that range. But still, you're talking about the acceleration from 2% that you did in 2025 organic to the 3% to 4%. Just can you talk a little bit more about what's underpinning that, what gives you confidence about the acceleration? Any particular end markets or customer groups where you're seeing the most improvement in activity as you'll go ahead? And I have a quick follow-up. Thanks.

Sure. So, Mike, thanks for the question. You know, when I think about the way we're opening up our guidance for the year, we're actually assuming market conditions are going to be pretty similar to 2025. As a reminder, we had just under one point of pandemic runoff in our 2025 results. So, you know, adjusted for that, we roughly had 3% growth last year. And we're assuming that we're going to be in the three to four range. And as Stephen said, you know, start with the assumptions, you know, around three. What we expect over time in this two-year timeframe is that just the absence And so the negatives will start to allow for conditions to improve and build within that range. But we don't want to make any major changes into the markets to start the year. There's lots of things I'm optimistic about, actually, just based on how January is in terms of customer meetings and so forth. But we just want to set ourselves up in the industry for success this year.

Okay. And then maybe as a quick follow-up, again, Stephen, you referred to that prior framework you gave on the 2Q guide last year at the time. I think you talked about 3% to 6% over the course of 2026 and 2027 combined. Just want to make sure that entire framework is still intact, especially how you think about next year, about 2027. Nothing's really changed in your forward outlook there.

Yeah, I think when we gave the – back in the time when we gave that framework and where we are now, yeah, we see it as consistent in terms of our assumptions about the future, and we're executing towards that.

Yeah. And what I would add is that, you know, one of the key focuses back in April is that irrespective of market conditions, we were just going to deliver great earnings growth, right? And, you know, we did a great job of navigating 2025. There was a lot of, you know, headwinds around tariffs and so forth that we just worked our way through and delivering 5% EPS growth for the year. I feel very good about in our opening position with effectively around 3% growth. We're assuming 6% to 8% of EPS growth without any of the capital deployment embedded into that. So that's what we can control. That's what we're going to deliver. And I'm optimistic about the progression of the industry as well, but we wanted to keep ourselves focused on controlling our destiny, which is just great earnings growth, drive share gain, and that's going to serve us well.

thanks mike good thanks i'll leave that thanks guys thank you our next question comes from dan arias from stifle your line is now open please go ahead good morning guys thank you mark i wanted

to ask about biopharma here one of the ideas seems to be that sentiment on spending at a high level is has improved just because these companies are seemingly breathing a little easier now that you have some of these mfn deals in place i'm just curious are you finding that that's actually translating the spending plans or 26 pharma budgets actually looking better you know to the extent that you can tell with these with these meetings that you're having so far yeah dan so

so it's a it's a great question so um we have a really unique set of capabilities to serve farmer and biotech right when i think about the year last year you know mid single digit growth um you know obviously we had some headwinds around the final roll off of the pandemic embedded in that to finish the quarter, the last quarter at high single digital team is doing a great job. And our customers really value trusted partner. And I'll come back to that in a moment. So when I think about the tone of, you know, what we heard in the healthcare conference and certainly in my meetings in Europe in January, I saw quite a number of customers. Pharma consistent with what we've been hearing for a while, which is good confidence around the ability to navigate governments and feel good about the, you know, things that have been agreed to, and excitement around their pipeline. So, you know, the tone feels good in pharma, and I think that ultimately we'll see that in activity. And then from a biotech, you know, you're seeing the data to show that funding is starting to improve, but the tone was incredibly positive. Now, there's, of course, there's a lag between when funding flows and when money is spent, but I would say January in terms of what the sentiment is in our customer base was quite positive.

You know, trusted partner is the other aspect of it, right?

There's one is what is the industry, and two is what is our role in all of this? You know, when I think about trusted partner, I've talked about it for a number of years, and, you know, so what does it really mean? And I thought maybe two anecdotes might be helpful to just bring it to reality, right? because we see lots of customers and all of our industry peers do. So I was at a healthcare conference. I was meeting with the CEO of one of our larger customers and discussing objectives for the year, where we can be helpful, what were the challenges. The discussion was so positive that he literally said, can we go and find my head of development, which we did, and let's talk about the specifics right literally just kind of real time we tracked his peer down or his colleague down and we got into the details and the right follow-ups happened from that and if I think about you know spending a half day with the management team of you know one of our larger biotech customers and just working through systematically about what are their priorities how we can help them and then the the long list of follow-ups about what the new opportunities are and why that's so relevant to their success, I hope that brings, you know, that a little bit more to life. And it's across our whole management team, we're having these dialogue, right? And that's the super cool thing about our role in pharma and biotech and why we're so well positioned

there. Yep. Okay. Helpful perspective. Maybe just to sort of summarize the point that you kind of touched on there, mid-single-digit growth in 2025 and biopharma in a year with some obvious headwinds is mid singles plus the right way to think about things or or something different

yeah i think that's the right way to frame it um there's obviously different ways we can get to the three to four but that's i think that's a way to frame the year as we stand here now

thank you dan okay thank you thank you our next question comes from jack mehan from nephron research your line is now open jack please go ahead thank you good morning guys um wanted to

build off of where Dan left off, but focusing on the LPBS segment. So in pharma services, Mark, how are you feeling about industry supply demand dynamics entering 2026? And any color you can

share on what's reflected in the guide for that business? Yeah, so when I think about our pharma services business, really executing very well. You know, as a reminder, we have, you know, the leading positions in the drug product sterile full finish and in our clinical trials logistics packaging business. And we have a smaller position, but meaningful in biologic drug substance as well. So when I think about industry demand capacity, really sterile full finish has been the area where there is heightened demand relative to industry capacity as part of the reason that we acquired the Sanofi site in New Jersey. It's really, in a way, a capital project to expand our capacity. We're winning contracts to meet our pharmaceutical customers' needs for reshoring to the U.S. So the demand profile is good, and our business has had a strong year and will continue to step up in growth over the next couple of years. So well positioned there, and I would believe that that will continue to be a nice contributor to our long-term growth in this

business. Excellent. Okay, and then next one to talk about the channel. So if you do some relatively simple benchmarking, it seems like you're doing pretty well there competitively. I was wondering if you could just talk about what's resonating in terms of investments you've made there, and do you see this competitive advantage as stable or expanding, weakening entering this

year just any color on that business would be great yeah jack um thanks for the question on our channel business so so when i think about um how we serve the you know the research and safety market um it's a business that's performed well for us for a long time um we have an excellent portfolio of supplier partners that has what our customers need. And you see the strength of the performance broad-based. We've done well in pharma and biotech in terms of winning business. We have done well in serving industrial customers, we call that out. And while academic and government is certainly more pressured as the end market is. Actually, our share position has been quite stable there. So I think competitive dynamics remain pretty consistent. We've been a methodical share gainer over many years, and that trend continues. And we'll continue to do a great job serving our customers and helping them meet their innovation and productivity needs.

Excellent. Thank you, Mark. Thank you, Jack.

Thank you. Our next question comes from Matt LaRue from William Blair.

your line is now open. Please go ahead. Hi, good morning. You know, since you launched Accelerator in late 2024, now there's a number of pretty big changes in the drug development and manufacturing ecosystem in terms of manufacturing, regionalization, rising use of AI and drug discovery. Mark, you referenced outstanding customer adoption of that solution. Just curious how some of these ecosystem changes are affecting customer preferences for outsourcing in general, and I guess more specifically in the Accelerator offering?

Yeah, that's a great question. So when I think about, let me start with this clinical research more broadly, and then I'll delve into change and a little bit about Accelerator. So, you know, the clinical research business for Thermo Fisher is performing very well. And the year played out really exactly as we thought it would play out and with a steady progression of revenue building sequentially quarter over quarter and then returning to growth in Q3 and mid-single-digit growth in Q4 organically. And authorizations have been far ahead of our revenue throughout the year and is showing the strong momentum in our competitive position. So when I think about, you know, accelerated drug development, which was something that we worked on creating for almost three years, we launched it in the fourth quarter of 2024. What it really is about is how do you shave a week off here, a month off there? How do you get waste out of the system and ultimately meaningfully bring the drugs to market more quickly or have insights that a drug is not performing well and therefore end a clinical trial more quickly, both of which add value to our customers. And it's really resulting in very meaningful authorizations wins for both our clinical research business and new total contracts for our pharma services business. So it is a differentiated capabilities. It's one that we've really worked hard to understand where the best opportunity is and then apply it to customers. When I think about how we are collaborating with open AI, really focus on the clinical research side of the thing, the equation, is how do you further shave time and cost out of the process and have even more insights. And that's going to be a journey because it's a highly regulated industry. And we'll go on that journey with our customers and look for new opportunities to drive an even more efficient drug development process. And our experience is the higher the returns our sponsors get on their investment, the more indications they want to go after in terms of the scale of the clinical trials. And they actually, you know, in a way pursue their pipeline more aggressively. So we're really excited about what the future holds in terms of drug development more broadly both in the manufacturing of the medicines as well as executing the clinical research. Okay thanks for that so

so you're encouraged about drug development activities but you know thinking about the drug discovery side I think still some debate about whether AI is a headwind or tail a tailwind to the amount of wet lab work moving forward just would be curious what your experience has been with customers, be it, you know, AI first biotechs and then larger pharma companies that were perhaps more aggressively using AI, what you've seen about their wet lab activity, their demand for

instruments, etc. So, what we're seeing is a recovery in the early research part of our business in terms of demand for the bioscience reagents, the basic R&D labs and pharma from the channel. So you're seeing that methodically strengthened. Some of that will come with biotech funding as well as that improves. What I would say is on the application of AI, we're doing a lot of work with customers on the wet lab, dry lab combination, meaning that we're actually working with our customers to better link what goes on in their wet labs with their data management and insights from AI. Our experience to date, and certainly our experience historically, is the more confidence you have in the research, you wind up doing actually more wet lab experimentation. You're probably going to work on less things that are just going to fail. So there is some waste that comes out of the system. But customers want to have total confidence in the work they're doing. And that's been our experience. And so we're actually quite optimistic about the intersection between AI and the demand for wet lab research. Thanks, Matt,

for the questions. Thank you. Thank you. Our next question comes from Casey Woodring from JT Morgan. Your line is now open. Please go ahead.

Oh, thank you for taking my questions. And first, just want to reiterate the comments. Congratulations, Stephen, on retirement. And Jim, looking forward to working with you moving forward. Wanted to touch on analytical instruments performance in 4Q. Curious on how its performance played out relative to your expectations in the quarter. Obviously, a tough comp, but curious to hear what you're seeing in that business across the different regions and end markets, and whether you saw a budget flush in the quarter or any sort of stimulus in China.

Casey, thanks for the question. So, you know, the analytical instruments team did a really good job in the fourth quarter. As you said, we had a more challenging comparison and we were flat growth in the quarter and we grew modestly in the full year. And when I think about that dynamic, that's in a dynamic where you have pressures on academic and government funding. You also have pressures in China more broadly throughout the year. So two of the important sectors of that part of the business face the headwinds. We did very well with our pharma and biotech customers, so I feel good about that. And I feel good about the performance in aggregate. For us, a lot of what drives it is the quality of our innovation and the impact. We have an incredible year. And if you think about where I allocated time, even in my remarks today, I spent more time on innovation than anything because customers want those breakthrough solutions that matter. And whether it was what we're doing in mass spectrometry, the next generation of our cryo-electro-microscope for tomography and structural biology, for all of those insights that we're bringing, that's what drives demand here. So the business is well-positioned. We're applying AI to the capabilities as well and announced an interesting collaboration with NVIDIA at the beginning of the year. And so we'll continue to strengthen that business. And it's an important part of our company.

That's helpful. And then relatedly, as we think about your analytical instrument and market, you know, the U.S. academic market specifically there, Mark, at our conference a few weeks ago, you had talked about the expectation for U.S. academic and government customers to really remain cautious until a finalized NIH budget is passed and then for spending to increase thereafter. I guess what's assumed for U.S. academic and government growth in 2026 and really how quickly would you expect spending to pick up after that budget is finalized? You know, last year we saw a bit of a discrepancy between fund appropriations and ultimate, you know, spending with tools. So just any further color on the expectations for U.S. academic and government in 2026. Thanks.

Yeah, so Casey, when I think, let me, first globally, our assumption for academic and government embedded in our guidance is similar conditions to last year in aggregate, right? And when I think about the U.S. environment, our assumption here is that there'll be a level of customer caution that will probably abate as the year goes down, but I would still We'll assume in our guidance it'll be a more cautious environment as customers are navigating the landscape. You know, it seems likely that we'll get a flat to slightly up NIH budget. That's going to be a good, you know, a point in time exactly when that happens, you know, TBD. So that should create tailwinds. When I think about over the next couple of years, I would expect that that will be one of the drivers of us higher in the range. but for now our assumption is that relatively cautious um for 2026. so thank you uh casey great

operator we have time for one more questions thank you our last question comes from dan brennan

from td cowen your line is now open dan please go ahead great thank you uh thanks mark steven

obviously congrats uh nice working with you um maybe just one housekeeping and then i'll follow up with more of like a deeper question. Just on the housekeeping. So, Stephen and Mark, you want investors to put like 3%, start at 3% for 2026 and around 1% in the first quarter

for organic. Is that right? That's what I indicated in my script. That's how I think

about it. Terrific. And then, Mark, I just wanted to ask maybe one more follow-up just on biopharma, given it's your largest end market, obviously, and really strong growth to finish out the year. I know you've mentioned a couple of times, you know, the guy doesn't assume any change in end market conditions. And I know Dan asked this, but I think, you know, most of us are hoping or assuming that with all these deals in place and, you know, the level of obviously cost assist we think has persisted that there will be some increase in spending. So I'm just wondering, and you obviously mentioned the commentary that you had with that one customer that was pretty favorable. So is that just conservatism or maybe you were out punching the market in 2025 so that for you, really, there's not going to be any change, even if the environment gets better? Just wondering if you can kind of maybe speak to that a little bit.

Thank you. Dan, I truly appreciate the question. So when I think about we've been consistently gaining share, so I love creating difficult comparisons. That's our job. So that's a good thing. And we'll continue to build our momentum in pharma biotech. I think the way we're viewing the year is we're starting out with market conditions are roughly the same as last year in aggregate. And we don't have the repeat of the roll off of the effect of the pandemic last of the revenue, right? So that's the starting assumption. And as Steven said, our goal is to retire risk as the year goes on and work our way up in the range. And when I think about what would be the factors that would drive that, it's largely going to be, as you said, farm and biotech, biotech in particular, as funding flows. There's a lag between when funding flows and when money is spent usually in roughly six months on average but that bodes for a strengthening environment and you know one could envision that it continues to strengthen you know into the following year as well but i think just we all learned a lot over the last couple of years i think starting out with you know a you know prudent a set of assumptions to start the year is helpful we're going to just deliver great earnings calls right i mean we're not looking at what the market's going to be. We have a plan to deliver 6% to 8% growth plus the benefits of capital deployment. And we're excited about Clario. So we're setting ourselves up for the right way to start the year. And ultimately, 26% will be another year of excellent performance with Thermal Fisher Scientific. So Dan, thank you for the questions. And let me from here, just wrap up with, thanks everyone for participating in the call today. And I think you got a sense our enthusiasm, we entered this year in a great position to deliver an excellent 2026. Of course, thank you for your support of Federal Fisher Scientific, and we look forward to updating you as the year progresses. Thanks, everyone. Thank you. This now concludes today's call.

Thank you all for joining. You may now disconnect your lines.