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DANAHER CORP /DE/

DHR
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Business Summary

Danaher Corporation is a global science and technology innovator committed to accelerating the power of science and technology to improve human health, comprised of more than 15 operating companies with leadership positions in the biotechnology, life sciences and diagnostics sectors, organized under three segments: Biotechnology, Life Sciences and Diagnostics. The Company's business research and development, manufacturing, sales, distribution, service and administrative facilities are located in approximately 50 countries. Danaher strives to create shareholder value primarily through three strategic priorities: strengthening competitive advantage through consistent application of the Danaher Business System (DBS) tools and culture; enhancing the portfolio in attractive science and technology markets through strategic capital allocation; and consistently attracting and retaining exceptional talent.

Although the Company's businesses generally operate in highly competitive markets, management believes that the Company has a leadership position in many of the markets it serves. The Company encounters a wide variety of competitors, including well-established regional competitors, competitors who are more specialized than it is in particular markets, as well as large companies or divisions of large companies with substantial sales, marketing, research and financial capabilities. The Company is facing increased competition in a number of its served markets as a result of the entry of well-resourced companies into certain markets, the entry of competitors based in low-cost manufacturing locations, the development of competitive technologies by early-stage, emerging and other companies and increasing consolidation in particular markets.

Danaher generates revenue through the design, manufacture and marketing of professional, medical, research and industrial products and services, which are typically characterized by strong brand names, innovative technologies and major market positions. The Company's businesses are typically characterized by a high level of products and services that are sold on a recurring basis, primarily through a direct sales model and to a geographically diverse customer base. For the year ended December 31, 2025, recurring revenue was $20.127 billion and nonrecurring revenue was $4.441 billion out of total sales of $24.568 billion .

The Biotechnology segment offers a broad range of equipment, consumables, software and services primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines, supporting a broad range of biotherapeutics including monoclonal antibodies, recombinant proteins, replacement therapies such as insulin and vaccines, as well as novel cell, gene, mRNA and other nucleic acid therapies. For the year ended December 31, 2025, the Biotechnology segment generated sales of $7.293 billion and operating profit of $1.864 billion , with operating profit as a percentage of sales of 25.6% . The Life Sciences segment offers a broad range of instruments, consumables, services and software primarily used by customers to study the basic building blocks of life, including DNA and RNA, nucleic acid, proteins, metabolites and cells, and also provides products and consumables used to filter and remove contaminants from a variety of liquids and gases. For the year ended December 31, 2025, the Life Sciences segment generated sales of $7.334 billion and operating profit of $520 million , with operating profit as a percentage of sales of 7.1% . The Diagnostics segment offers clinical instruments, consumables, software and services that hospitals, physicians' offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions. For the year ended December 31, 2025, the Diagnostics segment generated sales of $9.941 billion and operating profit of $2.650 billion , with operating profit as a percentage of sales of 26.7% .

During 2025, there were no acquisitions. During 2024, the Company acquired three businesses for total consideration of $558 million in cash, net of cash acquired, which complement existing units of the Company's Life Sciences segment, and the Company recorded an aggregate of $305 million of goodwill related to these acquisitions. On December 6, 2023, the Company acquired Abcam plc for a cash purchase price of approximately $5.6 billion , which is now part of the Company's Life Sciences segment. On February 16, 2026, the Company entered into a definitive agreement to acquire all of the outstanding shares of Masimo Corporation for an aggregate cash purchase price of approximately $9.9 billion , including assumed indebtedness and net of acquired cash. On October 10, 2025, DH Switzerland Finance S.a.r.l. completed an underwritten offering of Swiss franc-denominated bonds and received net proceeds of approximately CHF 1.2 billion (approximately $1.6 billion based on currency exchange rates as of the date of the pricing). The Company repurchased shares of Company common stock during 2025 and 2024, with payments for repurchase of common stock of $3.088 billion in 2025 and $5.979 billion in 2024. The Company declared a regular quarterly cash dividend of $0.32 per share of Company common stock that was paid on January 30, 2026 to holders of record on December 26, 2025.

For the year ended December 31, 2025, total sales increased 3.0% on a year-over-year basis, core sales increased 2.0% , and the impact of currency translation increased reported sales by 1.0% . Net earnings from continuing operations for the year ended December 31, 2025 totaled approximately $3.6 billion or $5.03 per diluted common share, compared to approximately $3.9 billion or $5.29 per diluted common share for the year ended December 31, 2024. Operating profit margins decreased 130 basis points from 20.4% for the year ended December 31, 2024 to 19.1% for the year ended December 31, 2025. Gross profit margin was 59.1% for 2025 compared to 59.5% for 2024. Operating cash flows from continuing operations were approximately $6.4 billion for 2025, a decrease of $272 million , or 4% , as compared to 2024.

Business Outlook

The Company expects its 2026 effective tax rate to be approximately 17.0% which is higher than the 2025 rate due primarily to the impact of net discrete tax benefits on the 2025 effective tax rate. In 2026 within the Biotechnology segment, the Company is assuming that the Bioprocessing sales growth trend will be similar to 2025, including continued growth in consumables driven by monoclonal antibody demand and the Company's product offerings across the biologics workflow. In the Life Sciences segment, the Company assumes a modest improvement in end markets in 2026 compared to 2025, but anticipates sales growth rates will remain below historical levels given the current macro environment. In the Diagnostics segment, the Company assumes higher sales growth in 2026 compared to 2025 as the Company moves past the peak of headwinds from policy changes in China.

The Company's growth strategy depends in part on its ability to further penetrate markets outside the U.S. and increase the localization of its products and services, and the Company plans to continue to increase its sales and presence outside the U.S., particularly in the high-growth markets. In 2025 approximately 59% of the Company's sales from continuing operations were derived from customers outside the U.S., and high-growth markets represented approximately 29% of the Company's total sales in 2025. The Company believes that future growth depends in part on its ability to continue developing products and sales models that successfully target high-growth markets. The Company also continues to pursue acquisition and investment opportunities within its targeted markets, and the pending acquisition of Masimo Corporation is expected to be included within the Diagnostics segment.

The Company is making significant investments, organically and through acquisitions and investments, to address the rapid pace of technological change in its served markets and to position its manufacturing, R&D and customer-facing resources to be responsive to the Company's customers throughout the world and improve the efficiency of the Company's operations. The Company's growth also depends on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation, and the Company anticipates that it will continue to make significant expenditures for R&D as it seeks to provide a continuing flow of innovative products and services to maintain and improve its competitive position.

Operating profit margins decreased 130 basis points from 20.4% for the year ended December 31, 2024 to 19.1% for the year ended December 31, 2025. The year-over-year decrease in gross profit margin during 2025 as compared with 2024 was due primarily to the impact of currency exchange rates, tariff costs and the 2025 impairment charges, net of the net positive impact from the gross profit margin of recent acquisitions, the 2024 acquisition-related charge and the impact of product mix. The Company largely offset the 2025 operating profit impact of the enacted tariffs with manufacturing footprint changes, supply chain adjustments, surcharges and additional productivity and cost savings actions.

Capital expenditures totaled approximately $1.2 billion and $1.4 billion in 2025 and 2024, respectively. In 2025 and 2024, the Company recorded amounts related to government assistance that offset operating expenses of $50 million and $43 million , respectively, and purchases of property, plant and equipment of $107 million and $198 million , respectively. The Company anticipates paying approximately $24 million of excise tax related to the 2025 share repurchases in 2026. During 2026, the Company's cash contribution requirements for its U.S. and its non-U.S. defined benefit pension plans are forecasted to be approximately $8 million and $41 million , respectively.

Based on the tariffs enacted and in effect as of December 31, 2025, the Company incurred incremental tariff costs for 2025 of less than $300 million . These incremental costs reflect increased costs of parts and materials used by the Company to produce products, as well as increased costs the Company incurred on finished goods shipped to customers. If delayed or additional tariffs are implemented, the Company would incur additional tariff costs that could be material and the Company's revenue and profitability could be adversely impacted. In addition to changes in trade policy, the U.S. government has implemented a number of other regulatory, policy and personnel changes, including the elimination, downsizing and reduced funding of certain government agencies and programs and the cancellation or delay of government contracts and research grants, the full impact of which remains uncertain.

Risk Factors

The Company faces intense competition in its served markets, and if it is unable to compete effectively, it may experience decreased demand and decreased market share. The Company's growth depends on the timely development and commercialization of new and enhanced products based on technological innovation, and if it fails to develop innovative products on a timely basis, its offerings will become obsolete. The healthcare industry is undergoing significant changes to reduce costs, including government pricing programs in China that have unfavorably impacted revenues and may continue to adversely affect the business. The Company is subject to extensive regulation by the FDA and comparable agencies, and failure to comply could result in significant penalties, including recalls, fines, and exclusion from government healthcare programs. As of December 31, 2025, the net carrying value of goodwill and other intangible assets totaled approximately $61.0 billion , and significant negative industry or economic trends could require impairment charges that would adversely affect financial statements.

Management Priorities

Management's message emphasizes the Company's commitment to its three strategic priorities: strengthening competitive advantage through consistent application of DBS tools and culture; enhancing the portfolio in attractive science and technology markets through strategic capital allocation; and consistently attracting and retaining exceptional talent. Management highlights that DBS is not only the set of business processes and tools used on a daily basis in the pursuit of continuous improvement, but also represents the Company's culture, guided by five Core Values: The Best Team Wins, Customers Talk, We Listen, Kaizen is our Way of Life, Innovation Defines our Future, and We Compete for Shareholders. Management notes that the Company measures its progress against these strategic priorities over the long-term based primarily on financial metrics relating to revenue growth, profitability, cash flow and capital returns, as well as certain non-financial metrics. Management expects the 2026 effective tax rate to be approximately 17.0% , which is higher than the 2025 rate due primarily to the impact of net discrete tax benefits on the 2025 effective tax rate.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Results of Operations; Note 5, Revenue
  2. [2] Item 7, MD&A — Results of Operations; Note 5, Revenue
  3. [3] Item 7, MD&A — Results of Operations; Consolidated Statements of Earnings
  4. [4] Item 7, MD&A — Business Segments; Note 6, Segment Information
  5. [5] Item 7, MD&A — Business Segments; Note 6, Segment Information
  6. [6] Item 7, MD&A — Business Segments
  7. [7] Item 7, MD&A — Business Segments; Note 6, Segment Information
  8. [8] Item 7, MD&A — Business Segments; Note 6, Segment Information
  9. [9] Item 7, MD&A — Business Segments
  10. [10] Item 7, MD&A — Business Segments; Note 6, Segment Information
  11. [11] Item 7, MD&A — Business Segments; Note 6, Segment Information
  12. [12] Item 7, MD&A — Business Segments
  13. [13] Note 2, Acquisitions
  14. [14] Note 2, Acquisitions
  15. [15] Note 2, Acquisitions
  16. [16] Note 2, Acquisitions — Pending Acquisition
  17. [17] Item 7, MD&A — Liquidity and Capital Resources; Note 13, Debt
  18. [18] Item 7, MD&A — Liquidity and Capital Resources; Note 13, Debt
  19. [19] Consolidated Statements of Cash Flows
  20. [20] Consolidated Statements of Cash Flows
  21. [21] Item 7, MD&A — Liquidity and Capital Resources; Dividends
  22. [22] Item 7, MD&A — Overview; Results of Operations
  23. [23] Item 7, MD&A — Overview; Results of Operations
  24. [24] Item 7, MD&A — Overview; Results of Operations
  25. [25] Item 7, MD&A — Overview; Consolidated Statements of Earnings
  26. [26] Consolidated Statements of Earnings
  27. [27] Item 7, MD&A — Overview; Consolidated Statements of Earnings
  28. [28] Consolidated Statements of Earnings
  29. [29] Item 7, MD&A — Results of Operations
  30. [30] Item 7, MD&A — Results of Operations
  31. [31] Item 7, MD&A — Cost of Sales and Gross Profit
  32. [32] Item 7, MD&A — Cost of Sales and Gross Profit
  33. [33] Item 7, MD&A — Liquidity and Capital Resources; Consolidated Statements of Cash Flows
  34. [34] Item 7, MD&A — Liquidity and Capital Resources
  35. [35] Item 7, MD&A — Liquidity and Capital Resources
  36. [36] Item 7, MD&A — Results of Operations; Income Taxes
  37. [37] Item 7, MD&A — Overview
  38. [38] Item 7, MD&A — Overview
  39. [39] Item 7, MD&A — Results of Operations
  40. [40] Item 7, MD&A — Results of Operations
  41. [41] Item 7, MD&A — Liquidity and Capital Resources; Capital Expenditures
  42. [42] Item 7, MD&A — Liquidity and Capital Resources; Capital Expenditures
  43. [43] Note 1, Business and Summary of Significant Accounting Policies
  44. [44] Note 1, Business and Summary of Significant Accounting Policies
  45. [45] Note 1, Business and Summary of Significant Accounting Policies
  46. [46] Note 1, Business and Summary of Significant Accounting Policies
  47. [47] Item 7, MD&A — Liquidity and Capital Resources
  48. [48] Item 7, MD&A — Liquidity and Capital Resources
  49. [49] Item 7, MD&A — Liquidity and Capital Resources
  50. [50] Item 7, MD&A — Overview
  51. [51] Item 1A, Risk Factors — Financial and Tax Risks
  52. [52] Item 7, MD&A — Results of Operations; Income Taxes
  53. [53] Consolidated Statements of Earnings
  54. [54] Consolidated Statements of Earnings
  55. [55] Consolidated Statements of Earnings
  56. [56] Consolidated Statements of Earnings
  57. [57] Consolidated Statements of Earnings
  58. [58] Consolidated Statements of Earnings
  59. [59] Consolidated Statements of Earnings
  60. [60] Consolidated Statements of Earnings
  61. [61] Consolidated Statements of Earnings
  62. [62] Consolidated Statements of Earnings
  63. [63] Consolidated Statements of Earnings
  64. [64] Consolidated Statements of Earnings
  65. [65] Item 7, MD&A — Results of Operations
  66. [66] Item 7, MD&A — Results of Operations
  67. [67] Item 7, MD&A — Results of Operations
  68. [68] Item 7, MD&A — Cost of Sales and Gross Profit
  69. [69] Item 7, MD&A — Cost of Sales and Gross Profit
  70. [70] Item 7, MD&A — Cost of Sales and Gross Profit
  71. [71] Consolidated Balance Sheets
  72. [72] Consolidated Balance Sheets
  73. [73] Item 7, MD&A — Liquidity and Capital Resources
  74. [74] Item 7, MD&A — Liquidity and Capital Resources
  75. [75] Consolidated Statements of Cash Flows
  76. [76] Consolidated Statements of Cash Flows
  77. [77] Consolidated Statements of Cash Flows
  78. [78] Item 7, MD&A — Results of Operations; Note 10, Goodwill and Other Intangible Assets
  79. [79] Note 6, Segment Information
  80. [80] Note 6, Segment Information
  81. [81] Note 6, Segment Information
  82. [82] Note 6, Segment Information
  83. [83] Note 6, Segment Information
  84. [84] Note 6, Segment Information

Analysis on 6/9/2026