Thermo Fisher Scientific Inc.: Form 10-Q for the period ended Sep 26, 2026

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, and are often identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” or similar expressions or words with similar meanings. Any statements contained herein that are not statements of historical fact should be considered forward-looking statements.

Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations include, among others, statements regarding:

• financial expectations, including projections of revenues, expenses, margins, earnings, cash flows, liquidity, capital allocation plans, and tax matters;
• operational matters, including business strategies, productivity initiatives, restructuring activities, cost-reduction programs, and new product or service developments;
• market and competitive conditions, including customer demand trends, industry dynamics, pricing, and competitive positioning;
• strategic actions, including planned acquisitions, divestitures, investments, and partnerships;
• legal, regulatory, macroeconomic, geopolitical, public health, supply chain, technology, and cybersecurity developments and their potential impacts on the company; and
• the timing and outcomes of any of the foregoing.

Each forward-looking statement contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is inherently uncertain and involves significant risks, assumptions, and factors that could cause actual results to differ materially from those expressed or implied. Important risks and uncertainties that could cause such differences are detailed under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025, which is on file with the Securities and Exchange Commission (SEC).

Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations speak only as of the dates on which they are made. While the company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, in the event of new information, future developments, or otherwise, except as required by law.

The company refers to various amounts or measures not prepared in accordance with generally accepted accounting principles (non-GAAP measures). These non-GAAP measures are further described and reconciled to their most directly comparable amount or measure under the section “Non-GAAP Measures” later in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Certain amounts and percentages reported within this Quarterly Report on Form 10-Q are presented and calculated based on underlying unrounded amounts. As a result, the sum of components may not equal corresponding totals due to rounding.

Overview

Thermo Fisher Scientific Inc. enables customers to make the world healthier, cleaner and safer by helping them accelerate life sciences research, solve complex analytical challenges, increase laboratory productivity, and improve patient health through diagnostics and the development and manufacture of life-changing therapies. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics. The company’s operations fall into four segments (Note 11): Life Sciences Solutions; Analytical Instruments; Specialty Diagnostics; and Laboratory Products and Biopharma Services.

Consolidated Results

(Dollars in millions except per share amounts)

Organic Revenue Growth

During the third quarter of 2026, customer activity remained strong across our end markets. Revenue growth was very strong in the pharma and biotech market, as underlying market conditions continued to strengthen. Revenues in the academic and government market were flat. Revenue in the industrial and applied market was very strong, driven by customer demand for our innovative high-end instruments. Revenue to customers in the diagnostics and healthcare market also grew slightly. During the third quarter of 2026, sales increased across all major geographies. Revenue growth was strong in North America and Europe and very strong in Asia-Pacific, including China. Contributions to organic revenue during the third quarter of 2026 were led by the Laboratory Products and Biopharma Services segment and the Analytical Instruments segment.

During the first nine months of 2026, revenue growth in the pharma and biotech market was strong, with performance driven by strengthening underlying market conditions. Revenues in the academic and government market were flat. Revenues to customers in the industrial and applied market were also strong, driven by customer demand for our innovative high-end instruments. Revenues in the diagnostics and healthcare market grew slightly. During the first nine months of 2026, sales grew in North America. Revenue growth in Asia-Pacific, including China, and Europe was strong. Contributions to organic revenue during the first nine months of 2026 were led by the Laboratory Products and Biopharma Services segment.

The company continues to execute its proven growth strategy which consists of three pillars:

• High-impact innovation;
• Our trusted partner status with customers; and
• Our unparalleled commercial engine.

GAAP operating income margin and adjusted operating income margin increased in the third quarter of 2026 due primarily to very strong productivity improvements, including tariff refunds realized, offset in part by strategic investments. GAAP operating income margin in the third quarter of 2026 also benefited from the recognition of net credits for changes in contingent consideration that did not occur in 2025, a gain on the sale of the microbiology business (Note 12), and lower levels of restructuring and other charges incurred for headcount reductions and consolidation of facilities when compared to the third quarter of 2025 (Note 6); however, this was largely offset by a held-for-sale loss (Note 12).

GAAP operating income margin and adjusted operating income margin increased in the first nine months of 2026 due primarily to very strong productivity improvements, offset in part by unfavorable business mix and strategic investments. GAAP operating income margin also benefitted from lower levels of restructuring and other charges incurred for headcount reductions and consolidation of facilities (Note 6), largely offset by a held-for-sale loss (Note 12).

The company’s references to strategic investments generally refer to targeted spending for enhancing commercial capabilities, including expansion of geographic sales reach and e-commerce platforms, marketing initiatives, expanded service and operational infrastructure, research and development projects and other expenditures to enhance the customer experience, as well as incentive compensation and recognition for employees. The company’s references throughout this discussion to productivity improvements generally refer to the impact of its Practical Process Improvement (PPI) Business System to address inflation, drive cost efficiencies, improve profitability and, in 2026, the impact of tariff refunds realized. The benefits of PPI include optimized price realization, reduced costs resulting from implementing continuous improvement methodologies, global sourcing initiatives, a lower cost structure following restructuring actions including headcount reductions and consolidation of facilities, and low cost region manufacturing.

Notable Recent Acquisitions and Divestiture

On March 24, 2026, the company acquired, within the Laboratory Products and Biopharma Services segment, Clario Holdings, Inc., a U.S.-based leading provider of endpoint data solutions for clinical trials. The acquisition expands the segment’s portfolio with the addition of highly complementary clinical research offerings, enabling customers to gain critical insights from clinical data to improve decision-making, accelerate innovation and drive greater productivity.

On September 1, 2025, the company acquired, within the Life Sciences Solutions segment, our filtration and separation business, a leading provider of purification and filtration technologies used in the production of biologics as well as in medical technologies and industrial applications, from Solventum Corporation. The business strengthens the segment’s bioproduction offerings with advanced filtration technologies that improve quality and efficiency across upstream and downstream workflows. In addition, its industrial filtration and membrane solutions will expand our reach into industries including battery, semiconductor and medical device manufacturing.

On August 12, 2026, the company sold its microbiology business to Astorg. The business was part of the Specialty Diagnostics segment.

Segment Results

The company’s management evaluates segment operating performance using operating income before certain charges/credits as defined in Note 11 to the Consolidated Financial Statements of the company’s Annual Report on Form 10-K for 2025. Accordingly, the following segment data are reported on this basis.

(Dollars in millions)

32

Life Sciences Solutions

(Dollars in millions)

The increase in organic revenues in the third quarter of 2026 was primarily driven by the bioproduction business. On a reported basis, the bioproduction business grew $79 million, which contributed 3 percentage points of reported growth in the segment, driven by higher demand from pharma and biotech customers, as well as the impact from the 2025 acquisition of the filtration and separation business. The increase in segment income margin resulted primarily from exceptionally strong productivity improvements, offset in part by unfavorable business mix, and the impact from the acquisition of the filtration and separation business.

(Dollars in millions)

The increase in organic revenues in the first nine months of 2026 was driven by the bioproduction business. On a reported basis, the bioproduction business grew $496 million, driven by higher demand from pharma and biotech customers, as well as the impact from the 2025 acquisition of the filtration and separation business. The increase in segment income margin resulted primarily from exceptionally strong productivity improvements, partially offset by the impact from the filtration and separation business acquisition, and unfavorable business mix.

Analytical Instruments

(Dollars in millions)

The increase in organic revenues in the third quarter of 2026 was driven by growth in the electron microscopy and chromatography and mass spectrometry businesses. On a reported basis, the electron microscopy and chromatography and mass spectrometry businesses increased $94 million and $18 million, respectively, which contributed 5 percentage points and 1 percentage point of reported growth in the segment, respectively. The increase in segment income margin was driven by very strong productivity improvements, favorable volume leverage and business mix, offset in part by strategic investments.

THERMO FISHER SCIENTIFIC INC.

(Dollars in millions)

The increase in organic revenues in the first nine months of 2026 was primarily due to growth in the electron microscopy and chromatography and mass spectrometry businesses. On a reported basis, the electron microscopy and chromatography and mass spectrometry businesses grew $123 million and $81 million, respectively, which contributed 2 percentage points each of reported growth in the segment. The increase in segment income margin was primarily driven by strong productivity improvements.

Specialty Diagnostics

(Dollars in millions)

Organic revenues were flat in the third quarter of 2026. On a reported basis, segment revenues declined, primarily driven by the impact of the microbiology business divestiture. The increase in segment income margin was driven by exceptionally strong productivity improvements.

(Dollars in millions)

Organic revenues in the first nine months of 2026 increased, led by the transplant diagnostics and the immunodiagnostics businesses. On a reported basis, the impact of the microbiology business divestiture was offset by modest growth across the segment’s other businesses. The increase in segment income margin was primarily due to strong productivity improvements.

Laboratory Products and Biopharma Services

(Dollars in millions)

The increase in organic revenues in the third quarter of 2026 was primarily due to growth in the pharma services business, research and safety market channel, and the clinical research business. On a reported basis, the clinical research business grew $425 million, which contributed 7 percentage points of reported growth in the segment, primarily driven by the impact of the Clario acquisition. The pharma services business and research and safety market channel grew $306 million and $169 million, respectively, which contributed 5 percentage points and 3 percentage points, respectively, of reported growth in the segment. The increase in segment income margin was primarily due to strong productivity improvements, the impact of the Clario acquisition, partially offset by strategic investments.

THERMO FISHER SCIENTIFIC INC.

(Dollars in millions)

The increase in organic revenues in the first nine months of 2026 was primarily due to growth in the clinical research business, research and safety market channel, and pharma services business. On a reported basis, the clinical research business grew approximately $1.05 billion, which contributed 6 percentage points of reported growth in the segment, primarily driven by the impact of the Clario acquisition. The pharma services business and research and safety market channel grew $539 million and $422 million, respectively, which contributed 3 percentage points and 2 percentage points, respectively, of reported growth in the segment. The increase in segment income margin was primarily due to strong productivity improvements, offset in part by strategic investments.

Non-operating Items

(Dollars and shares in millions)

Net interest expense (interest expense less interest income) in the third quarter and first nine months of 2026 increased, due primarily to the increase in debt for general corporate purposes and the company’s capital deployment initiatives, which included financing stock buybacks, paying dividends, and acquiring Clario (Note 12). In the third quarter and first nine months of 2026, the company’s net interest expense was reduced by $102 million and $296 million, respectively, as a result of its interest rate swap and cross-currency interest rate swap arrangements. In the third quarter and first nine months of 2025, the company’s net interest expense was reduced by $66 million and $199 million, respectively, as a result of its interest rate swap and cross-currency interest rate swap arrangements (Note 10).

GAAP other income/(expense) and adjusted other income/(expense) include currency transaction gains/losses on non-operating monetary assets and liabilities, and net periodic pension benefit cost/income, excluding the service cost component. GAAP other income/(expense) in the third quarter and first nine months of 2026 also includes $(13) million and $10 million, respectively, of net gains/(losses) on investments. GAAP other income/(expense) in the first nine months of 2026 also includes $6 million of business interruption recoveries. GAAP other income/(expense) in the third quarter and first nine months of 2025 also includes $7 million and $9 million, respectively, of net gains on investments, and $2 million and $8 million, respectively, of settlement charges for pension plans.

The company’s GAAP and adjusted tax rates in the third quarter of 2026 were impacted by a $161 million deferred tax benefit resulting from the recognition of tax attributes related to a domestication transaction. The company’s GAAP tax rate in the third quarter of 2026 was also impacted by a $171 million tax expense related to the tax gain associated with the sale of the microbiology business that was completed during the quarter. The company’s GAAP and adjusted tax rates in the first nine months of 2026 were impacted by $175 million of deferred tax benefits resulting from the recognition of tax attributes related to domestication transactions and a deferred tax benefit of $148 million in jurisdictions where the deferred tax assets are now expected to be realized due to forecasted income. The company’s GAAP and adjusted tax rates in the third quarter of 2025 were impacted by an $86 million tax benefit from tax return reassessments. The company’s GAAP tax rate in the third quarter of 2025 was also impacted by tax legislation enacted during the quarter. The company’s GAAP and adjusted tax rates in the first nine months of 2025 were impacted by a $125 million deferred tax benefit resulting from the recognition of a tax attribute related to a domestication transaction, a deferred tax benefit of $153 million related to capital losses generated as part of intra-entity transactions, and a $93 million benefit in jurisdictions where the deferred tax assets are now expected to be realized due to forecasted income (Note 7).

The effective tax rates in both 2026 and 2025 were also affected by relatively significant earnings in lower tax jurisdictions. Due primarily to the non-deductibility of intangible asset amortization for tax purposes, the company’s cash payments for income taxes are higher than its income tax expense for financial reporting purposes and are expected to total approximately $1.5 billion in 2026.

The company expects its GAAP effective tax rate in 2026 will be between 9% and 11% based on currently forecasted rates of profitability in the countries in which the company conducts business and generates foreign tax credits. The effective tax rate can vary significantly from period to period as a result of discrete income tax factors and events. The company expects its adjusted tax rate will be approximately 11.5% in 2026.

The company has operations and a taxable presence in approximately 70 countries outside the U.S. Some of these countries have lower tax rates than the U.S. The company’s ability to obtain a benefit from lower tax rates outside the U.S. is dependent on its relative levels of income in countries outside the U.S. and on the statutory tax rates in those countries. Based on the dispersion of the company’s non-U.S. income tax provision among many countries, the company believes that a change in the statutory tax rate in any individual country is not likely to materially affect the company’s income tax provision or net income.

Weighted average diluted shares decreased in 2026 compared to 2025, primarily due to share repurchases, net of option dilution.

Liquidity and Capital Resources

The company’s proven growth strategy has enabled it to generate free cash flow as well as access the capital markets. The company deploys its capital primarily via mergers and acquisitions and secondarily via share buybacks and dividends.

(In millions)

Approximately half of the company’s cash balances and cash flows from operations are generated outside the U.S. The company uses its non-U.S. cash for needs outside of the U.S., including acquisitions, capacity expansion, and repayment of third-party foreign debt by foreign subsidiaries. In addition, the company also transfers cash to the U.S. using non-taxable intercompany transactions, including loans and returns of capital, as well as dividends where the related U.S. dividend received deduction or foreign tax credit equals any tax cost arising from the dividends. As a result of using such means of transferring cash to the U.S., the company does not expect any material adverse liquidity effects from its significant non-U.S. cash balances for the foreseeable future.

The company believes that its existing cash and cash equivalents and its future cash flow from operations together with available borrowing capacity under its revolving credit agreement will be sufficient to meet the cash requirements of its existing businesses for the foreseeable future, including at least the next 24 months.

As of September 26, 2026, the company’s short-term obligations and current maturities of long-term obligations totaled $2.26 billion. The company has a revolving credit facility with a bank group that provides up to $5.00 billion of unsecured multi-currency revolving credit (Note 3). If the company borrows under this facility, it intends to leave undrawn an amount equivalent to outstanding commercial paper to provide a source of funds in the event that commercial paper markets are not available. As of September 26, 2026, no borrowings were outstanding under the company’s revolving credit facility.

THERMO FISHER SCIENTIFIC INC.

(In millions)

Operating Activities

During the first nine months of 2026, cash provided by net income was offset in part by investments in working capital. An increase in accounts receivable used cash of $0.54 billion. A decrease in accounts payable used cash of $0.43 billion. Cash payments for income taxes were $0.94 billion during the first nine months of 2026.

During the first nine months of 2025, cash provided by income was offset in part by investments in working capital. Changes in other assets and liabilities used cash of $1.21 billion primarily due to the timing of payments for compensation and income taxes. Cash payments for income taxes were $1.60 billion during the first nine months of 2025.

Investing Activities

During the first nine months of 2026, acquisitions used cash of $8.88 billion, and proceeds from the sale of the company’s microbiology business provided cash of $1.02 billion (Note 12). Purchases of property, plant and equipment for capacity and capability investments used cash of $1.26 billion.

During the first nine months of 2025, acquisitions used cash of $4.04 billion. The company’s investing activities also included $1.06 billion for the purchase of property, plant and equipment for capacity and capability investments.

The company expects that for all of 2026, expenditures for property, plant and equipment, net of disposals, will be between $1.9 billion and $2.0 billion.

Financing Activities

During the first nine months of 2026, issuance of debt provided $5.24 billion of cash. Repayment of debt used cash of $2.52 billion. The company’s financing activities also included the repurchase of $4.00 billion of the company’s common stock (6.9 million shares), and the payment of $0.51 billion in cash dividends. On November 6, 2025, the Board of Directors authorized the repurchase of up to $5.00 billion of the company’s common stock. All of the shares of common stock repurchased by the company during the first nine months of 2026 were under this program. At October 30, 2026, $1.00 billion was available for future repurchases of the company’s common stock under this authorization.

During the first nine months of 2025, issuance of debt and net commercial paper activity provided $3.34 billion of cash. Repayment of debt used cash of $1.63 billion. The company’s financing activities also included the repurchase of $3.00 billion of the company’s common stock (5.8 million shares), of which $0.04 billion settled in the fourth quarter of 2025, and the payment of $0.47 billion in cash dividends.

The company’s commitments for purchases of property, plant and equipment, contractual obligations and other commercial commitments, did not change materially subsequent to December 31, 2025, except in connection with the completion of the Clario acquisition, which occurred on March 24, 2026 (Note 12).

Non-GAAP Measures

In addition to the financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures such as organic revenue growth, which is reported revenue growth, excluding the impacts of revenues from acquired/divested businesses and the effects of currency translation. We report organic revenue growth because Thermo Fisher management believes that in order to understand the company’s short-term and long-term financial trends, investors may wish to consider the impact of acquisitions/divestitures and foreign currency translation on revenues. Thermo Fisher management uses organic revenue growth to forecast and evaluate the operational performance of the company as well as to compare revenues of current periods to prior periods.

We report adjusted operating income, adjusted operating income margin, adjusted other income/(expense), adjusted tax rate, and adjusted EPS. We believe that the use of these non-GAAP financial measures, in addition to

GAAP financial measures, helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company’s core operating performance, especially when comparing such results to previous periods, forecasts, and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes. To calculate these measures we exclude, as applicable:

• Certain transaction-related costs, including charges for the sale of inventories revalued at the date of acquisition, significant transaction-related third-party costs, changes in estimates of contingent acquisition-related consideration, and other costs associated with obtaining short-term financing commitments for pending/recent acquisitions. We exclude these costs because we do not believe they are indicative of our normal operating costs.
• Costs/income associated with restructuring activities and large-scale abandonments of product lines, such as reducing overhead and consolidating facilities. We exclude these costs because we believe that the costs related to restructuring activities and large-scale abandonment of product lines are not indicative of our normal operating costs.
• Equity in earnings/losses of unconsolidated entities; impairments of long-lived assets; and certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, including gains/losses on investments, the sale of businesses, product lines, and real estate, significant litigation-related matters, curtailments/settlements of pension plans, and the early retirement of debt. We exclude these items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.
• The expense associated with the amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of up to 20 years. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.
• The noncontrolling interest and tax impacts of the above items and the impact of significant tax audits or events (such as changes in deferred taxes from enacted tax rate/law changes), the latter of which we exclude because they are outside of our normal operations and difficult to forecast accurately for future periods.

We report free cash flow, which is operating cash flow less net capital expenditures, to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities. The company also uses this measure as an indication of the strength of the company. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt service that are not deducted from the measure.

The non-GAAP financial measures of the company’s results of operations and cash flows included in this Form 10-Q are not meant to be considered superior to or a substitute for the company’s results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth within the “Consolidated Results” and “Segment Results” sections and below.

(Dollars in millions except per share amounts)

38

THERMO FISHER SCIENTIFIC INC.

(Dollars in millions except per share amounts)

(a) Adjusted results exclude accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations and charges/(credits) for the sale of inventory revalued at the date of acquisition. Adjusted results in 2026 also exclude $16 million of transaction-related costs.

(b) Adjusted results exclude certain third-party expenses, principally transaction/integration costs, charges/credits for changes in estimates of contingent acquisition consideration, accelerated depreciation on fixed assets to be abandoned due to facility consolidations, and charges for product liability litigation.

(c) Adjusted results exclude restructuring and other costs consisting principally of severance, impairments of long-lived assets, net charges/credits for pre-acquisition litigation and other matters, net gains/losses on the sale of real estate, and abandoned facility and other expenses of headcount reductions and real estate consolidations. Adjusted results in 2026 exclude $72 million of gain on the sale of a business and $244 million for a held-for-sale loss. Adjusted results in 2025 also exclude $51 million of charges for disposition of a consolidated joint venture.

(d) Adjusted results exclude net gains/losses on investments and settlement charges for pension plans. Adjusted results in 2026 also exclude $6 million of business interruption recoveries.

(e) Adjusted results exclude incremental tax impacts for the reconciling items between GAAP and adjusted net income, incremental tax impacts as a result of tax rate/law changes, and the tax impacts from audit settlements.

(f) Adjusted results exclude the incremental impacts for the reconciling items between GAAP and adjusted net income attributable to noncontrolling interests.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis and Note 1 to the Consolidated Financial Statements of the company’s Annual Report on Form 10-K for 2025 describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no significant changes in the company’s critical accounting policies during the first nine months of 2026.

Recent Accounting Pronouncements

A description of recently issued accounting standards is included under the heading “Recent Accounting Pronouncements” in Note 1.

The company’s exposure to market risk from changes in interest rates and currency exchange rates has not changed materially from its exposure discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Management’s Evaluation of Disclosure Controls and Procedures

The company’s management, with the participation of the company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the company’s chief executive officer and chief financial officer concluded that, as of the end of such period, the company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in the company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the fiscal quarter ended September 26, 2026, that have materially affected or are reasonably likely to materially affect the company’s internal control over financial reporting.

The risks that we believe are material to our investors are detailed under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025 (which is on file with the SEC).