Danaher’s third quarter was marked by solid execution across its core businesses, with management citing bioprocessing momentum and a stronger-than-anticipated performance in respiratory diagnostics as key drivers. CEO Rainer Blair highlighted that demand for monoclonal antibody production remained robust, propelling bioprocessing growth, while Cepheid’s respiratory testing revenues benefited from customers ordering earlier than usual. Management also pointed to disciplined cost management and ongoing productivity initiatives as contributing to improved margins, despite continued softness in academic and government funding.
Is now the time to buy DHR? Find out in our full research report (it’s free for active Edge members).
Danaher (DHR) Q3 CY2025 Highlights:
- Revenue: $6.05 billion vs analyst estimates of $6.01 billion (4.4% year-on-year growth, 0.8% beat)
- Adjusted EPS: $1.89 vs analyst estimates of $1.72 (9.8% beat)
- Adjusted EBITDA: $1.88 billion vs analyst estimates of $1.73 billion (31% margin, 8.4% beat)
- Revenue Guidance for Q4 CY2025 is $6.70 billion at the midpoint, below analyst estimates of $7.03 billion
- Management reiterated its full-year Adjusted EPS guidance of $7.75 at the midpoint
- Operating Margin: 19.1%, up from 16.5% in the same quarter last year
- Organic Revenue rose 3% year on year vs analyst estimates of 2.2% growth (79.3 basis point beat)
- Market Capitalization: $156.1 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Danaher’s Q3 Earnings Call
- Michael Ryskin (Bank of America) asked about the 3% to 6% growth range for next year and what factors could drive outcomes to the higher or lower end. CEO Rainer Blair explained that while bioprocessing demand and productivity initiatives support the outlook, persistent policy and market uncertainties justify starting at the lower end.
- Tycho Peterson (Jefferies) questioned the potential for an equipment recovery in bioprocessing and what would trigger accelerated orders. Blair replied that while customer confidence is improving, actual order growth depends on clearer policy developments and tariff stability.
- Scott Davis (Melius Research) probed the mix shift within Cepheid’s business between respiratory and sexual health diagnostics. CFO Matt McGrew clarified that respiratory revenues are expected to be flat, while sexual health and other non-respiratory areas should continue delivering high single-digit to low double-digit growth.
- Douglas Schenkel (Wolfe Research) inquired about the impact of productivity investments on margin expansion in 2026. McGrew confirmed the company expects north of 100 basis points of margin improvement, driven by $250 million in net savings from cost actions.
- Vijay Kumar (Evercore ISI) asked about drivers behind the anticipated sequential uptick in diagnostics outside China and respiratory. McGrew indicated that improved comparisons due to lapping policy headwinds in China would drive the improvement, rather than changes in underlying demand.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will monitor (1) whether bioprocessing equipment demand rebounds as policy clarity emerges and capital projects move forward, (2) the pace of diagnostics growth as China policy headwinds subside and new product adoption accelerates, and (3) realization of margin improvements from announced cost actions. The evolution of regulatory environments and the impact of regional manufacturing strategies will also be important to watch.
Danaher currently trades at $219, up from $208.28 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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