THERMO FISHER SCIENTIFIC INC.

Thermo Fisher Scientific Inc. is the world leader in serving science, enabling customers to make the world healthier, cleaner and safer. The company serves customers in pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental, industrial, research and development, quality and process control settings. The company operates in four segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Biopharma Services. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics.

The company encounters aggressive and able competition in virtually all of the markets it serves. Competitors include a broad range of manufacturers, third-party distributors and service providers. Success primarily depends on technical performance and advances in technology (including artificial intelligence), product and service differentiation, availability and reliability, the depth of capabilities, reputation among customers, customer service and support, active research and application-development programs, and relative prices. The company's global team delivers an unrivaled combination of innovative technologies, purchasing convenience and pharmaceutical services through industry-leading brands including Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific, Unity Lab Services, Patheon and PPD.

The company generates revenue through the sale of products and services. Product revenues were $25.965 billion ¹ in 2025 and service revenues were $18.592 billion ² in 2025. Revenues are categorized as consumables, instruments, and services. Consumables revenues consist of single-use products recognized at a point in time upon transfer of control. Instruments revenues are recognized at a point in time for the substantial majority of sales. Service revenues, primarily clinical research, pharmaceutical, and instrument and enterprise services, are recognized over time as customers receive and consume the benefits. The company markets and sells through a direct sales force, customer-service professionals, electronic commerce and third-party distributors, with approximately 14,000 sales personnel ³ including highly trained technical specialists.

The Life Sciences Solutions segment provides an extensive portfolio of reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines as well as diagnosis of disease. It includes three primary businesses: biosciences, genetic sciences, and bioproduction. In 2025, segment revenues were $10.374 billion ⁴ and segment income was $3.768 billion ⁵ with a segment income margin of 36.3% ⁶. The Analytical Instruments segment provides a broad offering of instruments and supporting consumables, software and services used for a range of applications, including three primary businesses: chromatography and mass spectrometry, chemical analysis, and electron microscopy. In 2025, segment revenues were $7.554 billion ⁷ and segment income was $1.736 billion ⁸ with a segment income margin of 23.0% ⁹. The Specialty Diagnostics segment offers diagnostic test kits, reagents, culture media, instruments and associated products for healthcare, clinical, pharmaceutical, industrial, and food safety laboratories, with five primary businesses: clinical diagnostics, immunodiagnostics, microbiology, transplant diagnostics and the healthcare market channel. In 2025, segment revenues were $4.676 billion ¹⁰ and segment income was $1.256 billion ¹¹ with a segment income margin of 26.9% ¹². The Laboratory Products and Biopharma Services segment offers virtually everything needed for the laboratory, including lab consumables, equipment and chemicals, a research and safety market channel, pharma services for drug development and commercial manufacturing, and clinical research services. In 2025, segment revenues were $23.984 billion ¹³ and segment income was $3.350 billion ¹⁴ with a segment income margin of 14.0% ¹⁵.

The Life Sciences Solutions segment's biosciences business includes reagents, instruments and consumables for molecular biology and protein biology research, drug and vaccine discovery, and disease diagnosis. The genetic sciences business provides genomic and proteomic solutions for research, clinical, healthcare and applied markets. The bioproduction business provides solutions for biologics production and industrial manufacturing, including upstream cell culture, downstream purification, analytics, filtration and separation, and single-use solutions. The Analytical Instruments segment's chromatography and mass spectrometry business provides analytical instrumentation for organic and inorganic sample analysis. The chemical analysis products fall into three main categories: production, process and analytics; field and safety instruments; and environmental and process instruments. The electron microscopy business serves life sciences, materials sciences, and semiconductor markets. The Specialty Diagnostics segment's clinical diagnostics products include immunodiagnostic reagent kits, calibrators, controls, protein detection assays, and instruments for applications including drugs-of-abuse testing, therapeutic drug monitoring, thyroid hormone testing, sepsis screening, and tumor markers testing. The immunodiagnostics offerings include complete blood-test systems for allergy, asthma and autoimmune diseases. The microbiology offerings include dehydrated and prepared culture media, collection and transport systems, instrumentation and consumables to detect pathogens. The transplant diagnostics products include human leukocyte antigen typing and testing for the organ transplant market. The healthcare market channel offers a broad array of consumables, diagnostic kits and reagents, equipment, instruments, solutions and services for hospitals and clinical laboratories. The Laboratory Products and Biopharma Services segment's laboratory products include lab consumables, equipment and chemicals for life science research and drug discovery. The research and safety market channel offers a mix of products manufactured by Thermo Fisher, by third parties on a private-label basis, and by third parties under their brands. The pharma services business provides the entire spectrum of development, manufacturing and clinical trials services for small-molecule and large-molecule pharmaceuticals. The clinical research business offers comprehensive, integrated clinical development and analytical services including all phases of development (Phases I-IV), peri- and post-approval and site and patient access services.

On July 10, 2024, the company acquired Olink Holding AB (publ), a Swedish-based provider of next-generation proteomics solutions, within the Life Sciences Solutions segment. On September 1, 2025, the company acquired the filtration and separation business from Solventum Corporation, a leading provider of purification and filtration technologies used in the production of biologics as well as in medical technologies and industrial applications, within the Life Sciences Solutions segment. The company also has an agreement to acquire Clario Holdings, Inc. In 2025, the company recorded restructuring and other costs of $362 million ¹⁶, including charges for headcount reductions and facility consolidations, net charges for disposition of a consolidated joint venture, impairments of long-lived assets, and net charges for pre-acquisition litigation and other matters. Severance actions in 2025 affected approximately 5% ¹⁷ of the company's workforce. The company estimates that charges for restructuring and related actions incurred for headcount reductions and facility consolidations, which were approximately $0.3 billion ¹⁸ in 2025 and $0.3 billion ¹⁹ in 2024, will realize annual cost savings of approximately $0.5 billion ²⁰ and $0.2 billion ²¹, respectively, primarily due to reduced employee and facility expenses.

Total revenues for 2025 were $44.556 billion ²², compared to $42.879 billion ²³ in 2024, representing 4% ²⁴ growth. GAAP operating income was $7.746 billion ²⁵ in 2025 versus $7.337 billion ²⁶ in 2024, with GAAP operating income margin of 17.4% ²⁷ compared to 17.1% ²⁸ in the prior year. Adjusted operating income (non-GAAP) was $10.109 billion ²⁹ in 2025 versus $9.707 billion ³⁰ in 2024, with adjusted operating income margin of 22.7% ³¹ compared to 22.6% ³² in the prior year. GAAP diluted earnings per share (EPS) attributable to Thermo Fisher Scientific Inc. was $17.74 ³³ in 2025 compared to $16.53 ³⁴ in 2024. Adjusted EPS (non-GAAP) was $22.87 ³⁵ in 2025 compared to $21.86 ³⁶ in 2024. Net cash provided by operating activities was $7.818 billion ³⁷ in 2025, and free cash flow (non-GAAP) was $6.337 billion ³⁸.

The company expects its GAAP effective tax rate in 2026 will be between 7% ³⁹ and 9% ⁴⁰ based on currently forecasted rates of profitability in the countries in which the company conducts business and expected generation of foreign tax credits. The company expects its adjusted tax rate will be approximately 11.5% ⁴¹ in 2026.

The company is pursuing a number of strategies to improve internal growth, including strengthening its presence in selected geographic markets, allocating research and development funding to products with higher growth prospects, developing new applications for technologies, expanding service offerings, continuing key customer initiatives, combining sales and marketing operations in appropriate markets, finding new markets for products and services, and continuing the development of commercial tools and infrastructure to increase and support cross-selling opportunities. The company's growth strategy includes significant investment in and expenditures for product and service development. The company's R&D efforts focus on developing new technologies, enhancing the performance and usability of existing offerings, and expanding the applications for which products are used, including internal development programs, initiatives leveraging licensed or acquired technologies, and collaborations with leading research institutions. The company is incorporating AI and machine learning technologies into its products, services and internal processes.

The company's growth depends in part on the growth of the markets it serves. Any decline or lower than expected growth in served markets would diminish demand for products and services. The company is pursuing strategies to improve internal growth including strengthening presence in selected geographic markets, allocating R&D funding to higher growth prospects, developing new applications, expanding service offerings, continuing key customer initiatives, combining sales and marketing operations, finding new markets, and continuing development of commercial tools to support cross-selling. International markets contribute a substantial portion of revenues, and the company intends to continue expanding its presence in these regions. The company's strategy to grow in emerging markets may not be successful, and growth rates in these markets may not be sustainable due to various factors including geopolitical relations, sanctions, sovereign debt issues, and higher incidence of corruption.

GAAP operating income margin and adjusted operating income margin increased in 2025 due primarily to very strong productivity improvements, partially offset by unfavorable business mix and strategic investments. GAAP operating income margin in 2025 also benefited from lower amortization expense when compared to 2024, partially offset by higher transaction-related costs. The company estimates that charges for restructuring and related actions incurred for headcount reductions and facility consolidations, which were approximately $0.3 billion ⁴² in 2025 and $0.3 billion ⁴³ in 2024, will realize annual cost savings of approximately $0.5 billion ⁴⁴ and $0.2 billion ⁴⁵, respectively, primarily due to reduced employee and facility expenses. As of February 26, 2026, the company has identified restructuring actions, primarily in the Laboratory Products and Biopharma Services, Life Sciences Solutions, and Analytical Instruments segments, that it expects will result in additional charges of approximately $250 million ⁴⁶, primarily in 2026, and expects to identify additional actions in future periods.

The company expects that for all of 2026, expenditures for property, plant and equipment, net of disposals, will be between $1.8 billion ⁴⁷ and $2.0 billion ⁴⁸. The company's R&D expenses were $1.397 billion ⁴⁹ in 2025, $1.390 billion ⁵⁰ in 2024, and $1.337 billion ⁵¹ in 2023. The company anticipates that it will continue to make significant expenditures for research and development as it seeks to provide a continuing flow of innovative products to maintain and improve its competitive position.

On November 6, 2025, the Board of Directors authorized the repurchase of up to $5.00 billion ⁵² of the company's common stock. Early in the first quarter of 2026, the company repurchased $3.00 billion ⁵³ (4.9 million shares ⁵⁴) of the company's common stock. At February 26, 2026, $2.00 billion ⁵⁵ was available for future repurchases of the company's common stock under this authorization. In the first quarter of 2026, the company issued $3.80 billion ⁵⁶ of senior notes. Dividends paid in 2025 were $636 million ⁵⁷, compared to $583 million ⁵⁸ in 2024 and $523 million ⁵⁹ in 2023. Dividends declared were $1.72 per share ⁶⁰ in 2025, $1.56 per share ⁶¹ in 2024, and $1.40 per share ⁶² in 2023.

The company's business is affected by general economic conditions and related uncertainties affecting markets in which it operates. Both domestic and international markets experienced significant inflationary pressures in 2025 and inflation rates in the U.S., as well as in other countries in which the company operates, continue at elevated levels. If the global economy and financial markets, or economic conditions in Europe, the U.S. or other key markets, are unstable, that could adversely affect the business, results of operations and financial condition of the company and its customers, distributors, and suppliers, having the effect of reducing demand for some products and services, increasing the rate of order cancellations or delays, increasing the risk of excess and obsolete inventories, increasing pressure on prices, causing supply interruptions, creating longer sales cycles, and greater difficulty in collecting sales proceeds and slower adoption of new technologies.

The company faces risks associated with public health emergencies, pandemics, epidemics, or other health outbreaks. These events have had an adverse impact on certain operations, supply chains and distribution systems in the past, and may again in the future, and the company may experience unpredictable reductions in supply and demand for certain products and services. National, state and local governments may implement safety precautions including quarantines, border closures, increased border controls, travel restrictions, shelter in place orders and shutdowns and other measures that may disrupt normal business operations. The company's ability to continue to manufacture products is highly dependent on its ability to maintain the safety and health of its factory employees. The company also faces risks from tariffs imposed by the U.S. on goods from other countries and tariffs imposed by other countries on certain U.S. goods, including volatility resulting from the imposition of and changing policies around tariffs and related countermeasures.

The company's growth depends on the growth of the markets it serves, and any decline or lower than expected growth would diminish demand for its products and services. The company faces risks from rapid and significant technological change, and failure to keep pace with developments in AI technologies could adversely affect its competitive position. The company has significant goodwill of $49.36 billion ⁶³ and indefinite-lived intangible assets of $1.23 billion ⁶⁴ as of December 31, 2025, and if it is not able to realize the value of these assets, it may be required to incur material impairment charges. The company is subject to risks associated with public health emergencies, pandemics, epidemics, or other health outbreaks that could disrupt operations and supply chains. The company's pharma services offerings are highly complex and subject to strict quality and regulatory requirements; a failure of quality control systems could result in problems with facility operations, product destruction, or regulatory actions including product recalls, seizures, injunctions, civil sanctions, and criminal actions. The company had approximately $39.38 billion ⁶⁵ in outstanding indebtedness as of December 31, 2025, and its leverage could have negative consequences including increasing vulnerability to adverse economic conditions and limiting ability to obtain additional financing or acquire new products and technologies.

Management's message emphasizes the company's proven growth strategy which consists of three pillars: high-impact innovation, trusted partner status with customers, and the unparalleled commercial engine. The company continues to execute this strategy, and during 2025 revenues grew in the pharma and biotech market due to increased demand from customers, partially offset by reduced demand for COVID-19 vaccine and therapy related products and services. Revenues in the academic and government market declined, driven by customer hesitancy in a more uncertain environment in the U.S. and macro conditions in China. Revenue to customers in the industrial and applied market grew, while revenues to customers in the diagnostics and healthcare market were flat. During 2025, sales grew in North America, Europe and Asia-Pacific, but declined in China. Contributions to organic revenue during 2025 were led by the Laboratory Products and Biopharma Services and Life Sciences Solutions segments. The company expects its GAAP effective tax rate in 2026 will be between 7% ⁶⁶ and 9% ⁶⁷ and its adjusted tax rate will be approximately 11.5% ⁶⁸ in 2026. The company expects that for all of 2026, expenditures for property, plant and equipment, net of disposals, will be between $1.8 billion ⁶⁹ and $2.0 billion ⁷⁰.