Bruker Q3 2026 Earnings Call Transcript

Bruker (NASDAQ:BRKR) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://events.q4inc.com/attendee/635511356

Summary

Bruker Corporation reported Q3 2026 revenues of $874 million, a 1.6% increase year-over-year, with organic growth of 0.7%.

Non-GAAP gross and operating margins improved to 51.3% and 16.3%, respectively, with non-GAAP EPS rising 24% to $0.56.

Bookings trends remain positive with a book-to-bill ratio greater than one for the fifth consecutive quarter.

Strong performance in the U.S. academic and government sectors, China, and semiconductor metrology markets.

The company expects future revenue growth driven by advances in post-genomic disease biology solutions, drug discovery, and strategic collaborations.

Bruker updated its fiscal year 2026 outlook, expecting reported revenue growth of 2.5% to 3.5% and maintaining non-GAAP EPS guidance.

Recent acquisitions, including Mimetas, are expected to complement Bruker’s multiomics and drug discovery capabilities.

Management highlighted significant progress in cost-saving initiatives, with a focus on margin expansion and profitability improvements.

The company sees continued growth opportunities in AI-driven chemistry R&D and semiconductor metrology fueled by AI megatrends.

The sentiment of the call was cautiously optimistic, with management emphasizing de-risking of Q4 and confidence in future growth.

Full Transcript

OPERATOR

Good morning everyone and welcome to the Bruker Corporation third quarter 2026 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation there will be an opportunity to ask questions. To ask a question you may press star and then one on your touchtone phones. To withdraw your questions you may press star and two.

Please also note today’s event is being recorded. At this time I’d like to turn the floor over to Joe Costa, Director of Investor Relations. Please go ahead.

Joe Costa (Director of Investor Relations)

Good morning. I would like to welcome everyone to Bruker Corporation’s third quarter 2026 earnings conference call. My name is Joe Costa and I am the Director of Bruker Investor Relations. Joining me on today’s call are our President and CEO Frank Laukien and our EVP and CFO Gerald Herman. In addition to the earnings release we issued earlier today, during today’s conference call we will be referencing a slide presentation that can be downloaded from the Events and Presentations section of Bruker’s Investor Relations website.

During today’s call we will be highlighting non-GAAP financial information. Reconciliations of our non-GAAP to GAAP financial measures are included in our earnings release and are posted on our website at ir.bruker.com. Before we begin, I would like to reference Bruker’s Safe Harbor Statement which is shown on slide two of the presentation. During this conference call, we will or may make forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to our recent acquisitions, geopolitical risks, wars or blockades, market demand, tariffs, currency exchange rates, competitive dynamics, or supply chains. The company’s actual results may differ materially from such statements.

Factors that might cause such differences include, but are not limited to, those discussed in today’s earnings release and in our Form 10-K for the period ending December 31, 2025, as updated by our other SEC filings, which are available on our website and on the SEC’s website. Also, please note that the following information is based on current business conditions and on our outlook as of today, November 4, 2026. We do not intend to update our forward-looking statements based on new information, future events, or for other reasons, except as may be required by law prior to the release of our fourth quarter and full year 2026 financial results expected in February 20. You should not rely on these forward-looking statements as necessarily representing our views or outlook as of any date after today.

We will begin today’s call with Frank providing an overview of our business progress. Gerald will then cover the financials for the third quarter of 2026 in more detail and comment on our full year 2026 financial outlook. Now I’d like to turn the call over to Bruker CEO Frank Laukien.

Frank Laukien (Chief Executive Officer)

Thank you, Joe. Good morning everyone and thank you for joining us on today’s third quarter 2026 earnings call. Bruker continues to drive significant advances in post-genomic disease biology solutions and drug discovery, from proteoforms to glycobiology and from functional protein interactions to spatial biology. These foundational advances in disease biology, together with strong growth drivers in specialty infectious disease diagnostics and in our deep tech and semiconductor metrology franchise, are expected to lead to significant revenue growth acceleration and further margin expansion.

Bruker’s positive bookings trends continued in the fifth consecutive quarter of Bruker Scientific Instruments, or BSI, book-to-bill greater than one, as we see increasing strength in most of our end markets. And I will highlight three areas in particular. First, U.S. academic and government, or EchoGov. In the third quarter our BSI organic bookings in the U.S. EchoGov market grew in the double digits percentage year over year. This was the first quarter with year-over-year bookings growth in U.S. EchoGov since the NIH funding disruption in 2025.

The prior year comparison was a weak one, but this is nonetheless encouraging. And by the way, we also expect year-over-year organic bookings growth in U.S. EchoGov in the fourth quarter. One could speculate that last night’s blue wave in the midterms could also bode well for U.S. EchoGov funding in fiscal 2027 and beyond. Second, China. BSI organic bookings in China were up over 20% both in the third quarter and year to date. This consists of broad-based demand strength as almost all of our BSI end market orders in China grew nicely.

Third, year to date we’ve seen greater than 30% organic bookings growth in BSI semicon metrology markets in the quarter. This robust order growth is being fueled by the AI megatrend which requires our metrology solutions for logic chip foundries, high bandwidth memory, and advanced packaging. While the lead times on these orders are longer than most of our life science tools, we expect to see these semi orders convert into revenue mostly in fiscal year 2027 and some in fiscal year 2028.

Speaking of AI, artificial intelligence, in August we started a strategic collaboration with and we did a minority investment in Atenery Technologies, a pioneer of self-driving labs and agentic AI-driven chemistry R&D. Atenery integrates our Chemspeed lab automation and Bruker analytical measurement instruments into its agentic AI workflows. The Atenery Lab in Boston includes Chemspeed robotics and Bruker benchtop NMR for small molecule synthesis and catalysis in pharmaceutical R&D and process development.

All right, let’s dive into the numbers. Let’s turn to slide 4 now for the P&L performance in the third quarter, where we achieved significant margin expansion and non-GAAP EPS growth driven by our focus on cost discipline and execution. Our third quarter 2026 reported revenues of $874 million increased 1.6% year over year with organic growth of 0.7%. Our third quarter 2026 non-GAAP gross and operating margins were 51.3% and 16.3% respectively, both up significantly year over year.

Our Q3 2026 diluted non-GAAP EPS was $0.56, up 24% from Q3 2025. Moving to slide 5, our year-to-date nine months Q3 2026 revenues increased by 3.1% to $2.54 billion with organic revenue essentially flat. Our year-to-date non-GAAP gross margin, operating margin, and EPS were all up nicely year over year, and their year-to-date performance is summarized on slide 5. As Gerald will explain in more detail shortly, in Q3 and year to date our free cash flow also has improved considerably and we have made excellent progress with deleveraging.

Please turn to slides 6 and 7 now, where we highlight the year-to-date third quarter performance of our now reorganized three Scientific Instruments groups and of our BEST segment, all on a constant currency, or CER, and year-over-year basis. Year to date, the BioSystems group revenue was $1.2 billion, up low single-digits percentage year over year in CER. Strength in biopharma and translational research was partially offset by weakness in EchoGov.

BioSystems saw strong CER growth in IR/Raman spectroscopy and in mass spectrometry, driven in part by the Toffwork acquisition, which was partially offset by softness in NMR. Year to date 2026, our new, or newly elevated, Microbiology and Infection Diagnostics group had revenues of $396 million, which increased in the low single-digits percentage, driven primarily by robust molecular diagnostics revenue growth. Turning to slide 7, year to date Bruker Nano revenue was $770 million with a low single-digits percentage CER decline. Robust year-to-date growth in semi metrology and biopharma was offset by weakness in EchoGov and industrial. Semi revenues were down double digits in the third quarter, primarily driven by our previously communicated pushouts of semi metrology instruments from the third quarter. We had been very explicit about that in our Q2 earnings call when Gerald gave Q4 color, and that we expected the $20 million pushout from Q3 in semicond metrology.

Finally, year-to-date BEST revenues were up 8.3% in CER net of intercompany eliminations, with strong growth in Research Instruments, or RI, and solid growth also in superconductors. Right, moving to slide 8 we highlight our recent acquisition of Mimetas, a leading humanized organ-on-a-chip, or NAM, platform. NAM stands for new approach methodology. It’s a commonly used term in the industry and also by the FDA. I’ll let you read some of the background on Mimetas.

I think it’s a reading slide rather than me going to every bullet, but I think it is very important to get the higher-level perspective that in addition to multiomics and spatial and structural biology and AI-augmented drug discovery, one of the pain points and one of the reasons for the failure rates of so many drugs when promising drugs get translated from mouse models or animal models to humans are toxicities—off-target toxicities that are unique to humanized models and human physiology.

And Mimetas, with its humanized organs on a chip which can be nicely automated, which have many disease models, and are poised for very significant double-digit growth with high gross margins, we think are probably the best type of systems of this type on the market. Which is why, after extensive research on that market, we acquired a majority in Mimetas. We’re very excited and we think this will complement our multiomics, spatial biology, structural biology in drug discovery, in particular drug discovery and development, in a very important way.

It’s a high priority for just about every biopharma company. Right, on slide 9 we touch on a few recent advances in functional proteomics with novel workflows for drug discovery and disease biology, launched at the recent international UPRO conference in Singapore. Again I will not read every bullet, but we had very significant further advances in this multi DIA method on our TIMS altrop, or bottom-up roach omics, for plasma proteomics, single-cell proteomics, where we see, in that net, more peptides and protein groups and also more isoforms, sequence variants, and all the other things that traditional MS-based methods or the affinity methods simply cannot see.

But they’re functionally very important for better AI frontier models or better drug discovery. On the right-hand side, our TIMS Omni continues to be a very, very successful system in the market with significant orders, and here are new workflows that are really very, very important: one in glycobiology where, with our unique trapped electron-based fragmentation—I won’t go into technical details—but it’s really crucial to do this at scale, at speed, and in very sensitive manners.

And glycobiology is tremendously important but has been traditionally very difficult to study. Moreover, oligonucleotides and native RNA analysis is another important area. Whether mRNA is a drug target or a potential drug, a potential RNA drug, the instrument can perform outstanding workflows now in this area as well. We think this bodes well for further rapid adoption in academic medical centers which have good funding as well as in pharma companies and biotech companies.

All right, that about does it for me. In summary, in the third quarter we achieved significant margin expansion and non-GAAP EPS growth and our positive booking trends continued. Our BSI organic bookings and BSI backlog are both up mid single-digits percentage year to date. This helps de-risk our fourth quarter and sets us up for meaningful further performance improvements and growth acceleration in fiscal year 2027 and beyond. Let me turn the call over to our CFO, Gerald.

Gerald Herman (Chief Financial Officer)

Thank you, Frank, and thanks, everyone, for joining us today. I’m pleased to provide more detail on Bruker’s third quarter 2026 financial performance. Starting on slide 11, in 3Q26 our results were roughly in line with our expectations on the top line, but meaningfully ahead of our expectations on margins and EPS, largely confirming the benefit of our cost-saving actions together with a positive mix in the quarter. In the third quarter of 2026, Bruker’s reported revenue increased 1.6% to $874 million, with organic revenue growth of 0.7%. Acquisitions added 1.7% to our top line, while foreign exchange was a 0.6% headwind, resulting in constant exchange rate revenue growth of 2.4% year over year. BSI organic revenue declined 0.4% in 3Q26, with BSI instrument revenue down mid-single digits and BSI aftermarket revenue up high single digits organically year over year.

The organic decline in 3Q26 instruments revenue was primarily driven by the previously communicated pushouts of semi metrology instruments from the third quarter. Geographically, on a year-over-year organic basis, in the third quarter of 2026 European revenue was up low-single-digit percentage, Americas revenue was roughly flat, while Asia Pacific revenue declined in the mid-single digits percentage. BSI revenues in China were up in the low-double-digit percentage in the third quarter of 2026, and for our EMEA region revenue was up over 30%.

Our BSI segment order book performance was up organically in the low-single-digit percentage year over year, driven by strong growth in semi and double-digit growth in U.S. academic government research and China academic government research, partially offset by declines in European and Japanese ACAD/GOV and biopharma in the third quarter, mostly due to quarterly fluctuations. Third quarter 2026 non-GAAP gross margin increased 120 basis points. The 51.3% non-GAAP operating margin was 16.3%, up 400 basis points. Driven by our cost-saving actions and favorable mix, we are on track to achieve our $140 million annualized run-rate cost-out target on a non-GAAP basis. Third quarter 2026 diluted EPS was $0.56, up 24.4% from the $0.45 we posted in 3Q25. Our non-GAAP effective tax rate was 28.4% compared to 24.4% in 3Q25 due to unfavorable jurisdictional mix in 3Q26.

On a GAAP basis, we reported a diluted loss per share of $0.81 compared to a GAAP diluted loss per share of $0.41 in the third quarter 25. Our third quarter 26 GAAP results include a non-cash goodwill impairment charge of approximately $175 million related to Bruker Spatial Biology, where U.S. academic government research market conditions have been weak. Weighted average diluted shares outstanding in the third quarter of 2026 were 153.2 million, an increase of 1.2 million shares from 3Q25.

Slide 12 shows Bruker’s performance for the year to date 2026, which has similar drivers to the third quarter. Turning to Slide 13, in the third quarter of 2026, free cash flow improved $151 million year over year, driven mainly by higher net income excluding the non-cash goodwill impairment and improved working capital. We continued our debt deleveraging in the quarter, paying down an additional $58 million in debt. Our net leverage ratio was 2.4 times as of September 30, 2026 and now is below our previously communicated leverage target.

Turning now to Slide 15, we’re updating our fiscal year 26 financial outlook for currency and reconfirming our prior fiscal year 26 organic revenue growth and non-GAAP EPS guidance. We now expect reported revenue of $3.52 to $3.56 billion, representing reported growth of 2.5% to 3.5% compared to fiscal year 25. We continue to expect organic revenue growth of 1% to 2% and contribution from acquisitions of approximately 1.5%. We now expect currency to be approximately neutral to reported revenue for fiscal year 26 after the recent strengthening of the U.S. dollar.

We continue to expect non-GAAP operating margin expansion of 250 to 300 basis points year over year, largely driven by our cost-saving actions. On the bottom line, we continue to expect non-GAAP EPS for fiscal year 26 in a range of 210 to 215, up 15% to 17% compared to fiscal year 25. Other guidance assumptions are listed on the slide. Our fiscal year 26 ranges have been updated for foreign currency rates as of September 30, 2026. Now some color on the fourth quarter of 2026: we expect fourth quarter organic revenue to grow in the lower mid-single digits percentage year over year. We expect meaningful sequential and year-over-year increases in operating margin and EPS due to higher volume and favorable mix in the fourth quarter, as well as due to the compounding effects from our cost-saving actions.

To wrap up, third quarter 2026 was a solid quarter for Bruker, giving us improved confidence in a market recovery in many key market segments and geographies. Our cost-saving actions are well on track, positioning us for significant margin and profitability improvements in fiscal year 26, and we’re driving towards further margin improvement and double-digit EPS growth in 2027. With that, I’d like to turn the call back over to Joe. Thank you very much.

Joe Costa (Director of Investor Relations)

Thanks, Gerald. We will now begin the Q&A portion of the call. As a reminder, to allow everyone time for questions, we ask that you limit yourself to one question and one follow-up. Operator.

OPERATOR

We will now begin the question-and-answer session. Once again, to ask a question, you may press star and then one on your touchtone phones. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys. To withdraw your question, you may press star and two. Our first question today comes from Puneet Sudha from Leerink Partners. Please go ahead with your question.

Puneet Sudha (Analyst at Leerink Partners)

Hi, Frank. Gerald, thanks for taking my questions here. First one on margin improvement, margin expansion this quarter. Great to see that, but just wondering in terms of factors that give you confidence on the step up in the fourth quarter, it is still sizable, 500 bps sequential. So just wondering in terms of cost savings that you’re seeing and recognizing in the quarter, in fourth quarter, any gigahertz magnets that are landing in the fourth quarter, ACAD/GOV and other AI and the order $20 million order shift that you talked about as well, what are some of the drivers that give you confidence on that, on that step up in margin?

Frank Laukien (Chief Executive Officer)

Good morning, Puneet. Yeah, thank you for your questions. I think, you know, I mean we, I think we’ve significantly de-risked the fourth quarter. By my math, we do no longer need a 500 bps sequential step up. That was, I think, previously correct. But now we need to step up from where we were at 16.3%, and I think we need to step up to the high teens. And that seems much more achievable given that it’s likely to be about a billion-dollar in revenue quarter.

And indeed the recent U.S. order pickup probably mostly will benefit us in 27. China ACAD/GOV orders have picked up earlier and they would begin to help us in Q4. For the semi shift, some of that goes into Q4, some of that may go into early 27, but that’s all good. So I think the margin and the revenue margin EPS ramp into Q4, I mean it’s never without risk, but we think what we’re saying about the color there is prudent at this point in time. But I think this is much significantly de-risked with another strong Q3.

And obviously the margin performance and EPS performance in particular makes this much more achievable.

Puneet Sudha (Analyst at Leerink Partners)

Thanks for clarifying that. And then on AI, Frank, obviously an important theme for Bruker, you’re levered to it multiple ways, uniquely on the semi side, and obviously the AI bio discovery, as that starts to take shape as companies are investing more in discovery and platforms there, can you maybe, is there a way to sort of quantify the contribution today from AI, and then how are you thinking about 2027 here for AI overall across the enterprise?

Frank Laukien (Chief Executive Officer)

Thank you. Yeah, two pieces to that. As you’ve pointed out, the semiconductor metrology and within our BEST segment at RI, also some contribution to the ASML supply chain ultimately, although that’s still smaller because that goes into the latest and greatest tools that they are beginning to now get more adopted. That has been quantified. I think you’ve written notes on that, others have written notes on that, so I won’t jump into that. And that continues to, I believe the year-to-date order growth in that area has been 30% or higher year to date.

And again, it also was really strong in Q3 in order performance. So that’s just humming along, and obviously one of the very strong growth drivers in our deep tech, broader deep tech area, but particularly in the semi metrology and a little bit in the lithography supply chain. Biodiscovery, or bio and chemistry discovery and materials discovery, benefits our Chemspeed automation orders, benefits our CY software, and more and more I think it’ll also benefit those Deep Biology 2.0 tools, whatever you want to call it — you know, from bottom-up proteomics of course to isoforms to incomplete proteoforms, top-down glycobiology, spatial biology, and structural biology I think are all going.

There’s an excellent article in the Wall Street Journal today where, yeah, taking more shots on goal, meaning on drug targets, is helping a little bit, but it may not lead to the expected breakthroughs of curing all diseases anytime soon, which is optimistic anyway. But, you know, I think unless you feed these frontier models with much, much deeper insights into disease biology and drug targets and mechanisms of action, we’re not going to make all that much progress.

So there I think maybe not uniquely, but I mean more than any other company, I think we’re positioned for really providing these deep disease biology tools. We think that will, you know, that’s still not moving the needle so far, but I think that’s quite promising for 27 and I think could be seeing a very significant ramp up in the next few years, whereas people begin to move from scratching the surface with more shots on goal — which is half of sort of the initial approach, which is fine — to, I think, the much more impactful deeper biology for which you need our tools.

That was a long answer. I apologize.

Puneet Sudha (Analyst at Leerink Partners)

I know. It’s all good. Thanks. Thanks, Frank.

OPERATOR

Our next question comes from Tycho Peterson from Jefferies. Please go ahead with your question.

Tycho Peterson (Analyst at Jefferies)

Hey, thanks, Frank. Obviously a lot of improvement here in end markets. I’m wondering if you could just kind of give us a state of the various end markets. You’ve obviously talked a lot about academic picking up — you know, how much of what you’re seeing here and now you think is durable? And then what’s going on in pharma? It seems like, you know, pharma orders were down both in the EU, and I don’t know if in the U.S. as well, but maybe touch on that as well.

Frank Laukien (Chief Executive Officer)

Yeah, gladly. Tycho, thank you. So AcaGov. Nice to see a little bit of order growth in the US, importantly also in China. That’s been going on throughout year to date, so for several quarters. Japan is relatively weak. It’s a small part of the total demand now, but it is weak. And Europe was quite very strong in Q3 of last year ’25 and was a bit weaker in AcaGov than in Q3 of ’26. And so that’s how you know it’s not all—we’re not firing on all cylinders—but more and more, and year to date I think are the better trends.

Any given quarter these things can fluctuate and they do. But year to date I think the overall, as we said, mid‑single‑digit BSI backlog and bookings, I think that kind of is a good predictor of where we might end up in revenue growth, organic revenue growth next year. Pharma/biopharma also has some fluctuations. I think we had an excellent Q4, Q2, Q3 a bit weaker. Q1 was actually not that strong. But overall the pharma/biopharma trends are good. They’re not as strong as those who are more in the regulated space of pharma—they see stronger growth as we’ve seen yesterday, for instance. But I’m encouraged that in the more capex‑heavy drug discovery front end the trends are good, although there’s some quarterly fluctuations, also for automation and software tools.

Tycho Peterson (Analyst at Jefferies)

Okay, that’s helpful. And then what’s your latest framing on ’27? You know, given mid‑single‑digit bookings growth here, you know BSI book‑to‑bill above one. Obviously the incremental cost savings look like they’ll continue to flow through here. So can you just provide any update, updated thoughts on ’27 at this point?

Frank Laukien (Chief Executive Officer)

Well, not really beyond what we’ve said already. I mean as you know, when we report probably in early February, report Q4, we’ll give guidance. But, you know, I mean having—we put our neck out and feel pretty comfortable and are very committed to double‑digit EPS growth, but refining that further, it’s too early. Right now we are seeking more than 100 bps of further operating margin expansion. Hopefully more than just 100, not 300 or 250—like 300 this year—but another meaningful step and, you know, from this year still relatively flattish because for us it’s always that orders kick in six to nine months before the revenue growth kicks in, as you’ve seen. And then we have this very strong deep tech orders which have even longer conversion times but come in at very good margins and with very good order trends.

So, you know, anticipating that we will accelerate in organic bookings growth—sorry, in organic revenue growth—from this year is easy because it’s going to be an easy comparison, but nonetheless, you know, that should bring us to at least the lower mid‑single digits.

Tycho Peterson (Analyst at Jefferies)

Okay. And then just quickly on margins before I hop off. Mix contributed 90 bps this quarter. Can you just unpack, you know, where you’re seeing the biggest mix benefits?

Gerald Herman (Chief Financial Officer)

Yeah, hi Tycho. Oh, it’s Gerald. I’d say we saw some significant mix improvement both in our NMR business as well as in our optical microscopy business in the quarter, and that’s better than what we actually anticipated. Clearly we still have, you know, good solid performance in a number of other areas, but I’d highlight those two.

Tycho Peterson (Analyst at Jefferies)

Okay, thank you.

Gerald Herman (Chief Financial Officer)

You’re welcome.

OPERATOR

Our next question comes from Luke Surgot from Barclays. Please go ahead with your question.

Luke Surgot (Analyst at Barclays)

Great, thanks. Just wanted to follow up on the margin side. So big margin step‑up here and came in well above what anybody was looking for. And so you talked about de‑risking that Q4. So just wanted to know, like, is there a pull‑forward on any of the cost‑outs or is this just—you talked about, you know, on Tycho’s question, the 90 bps mix—just anything there from a conservatism or what’s embedded in Q4, because your revenue dollar didn’t change.

So just trying to figure out, like, what the difference is there versus your prior expectations for a big Q4 step‑up.

Gerald Herman (Chief Financial Officer)

Yeah. Again, Luke, Gerald. I would just say with respect to the margin performance for the third quarter, I mentioned we had two more favorable elements on the mix side, on the cost‑saving side. Recall that actually most of our cost‑saving actions didn’t kick in really until the fourth quarter of 2025 historically. So we have quite a big step‑up in cost‑saving improvements in the third quarter of 2026, and that’s part of the more significant element here.

But I would say, you know, mix was clearly better than we had expected to see even back in Q2.

Luke Surgot (Analyst at Barclays)

Okay. And then I guess on the BEST beat that you guys had, you know, continued strength here all year long. Can you talk a little bit more about what is driving this? Is it, like, you know, some of the newer energy technologies like fusion, or is this—just trying to think about how much is, like, just pricing given the supply chain constraints, etc.

Frank Laukien (Chief Executive Officer)

Yeah, good question. So I should observe that BEST was pretty weak last year. So it also is—sometimes a weaker comparison helps—but nonetheless we’re very pleased with the BEST order trends, which are even stronger. And we don’t break those out because some of our MRI superconducting wire orders, they come sort of every five years in big framework agreements, but very, very strong order growth in the research instrument side, and that is driven, to your question, by ITER and fusion orders that ultimately will go towards fusion energy, certainly fusion energy research.

There are other high‑energy physics and advanced light sources and free‑electron lasers and similar projects around the world where we just have pretty unique capabilities and unique technology that really play a role, and where the order growth also has been very, very strong. As I said, we’re also plugged in a little bit into this ASML lithography supply chain in a small way. But, you know, being designed in is a good thing—so you want to be into the newest tool.

So we’re just delighted with that segment. And it also has seen nice margin improvement. So it’s not just the growth—and the bookings growth is even higher there, even though the revenue growth is really quite nice. So it’s an exciting part of our normally less appreciated deep tech, in addition to the deep tech semiconductor metrology that we’ve quantified and that you have had, you’ve all had more interest and insights in this year.

Luke Surgot (Analyst at Barclays)

Appreciate it, thanks.

OPERATOR

Our next question comes from Subu Nambi from Guggenheim. Please go ahead with your question.

Subu Nambi (Analyst at Guggenheim)

Hey guys, good morning. Thank you for taking my question. As you think about 2027 framing, given all the events that have happened in the last two years, how are you approaching the philosophy when rolling all the end markets up? Should we expect a bit more conservatism next year given the jump‑off point, or is it full steam ahead with some of the higher‑growth businesses like semis? Just any color on a prudent start point would be helpful.

Frank Laukien (Chief Executive Officer)

Super good questions. Obviously guidance coming then in early February. I’m afraid I might repeat a little bit what I said to Tycho earlier. Yeah, there is upside, but I think it’s also—we’ve all been burned by unexpected events in ’25 in particular. Right. And still things are—there’s still a lot of times that a lot of areas are very dynamic and timing is hard to call. But I think, you know, looking for double‑digit EPS growth—of course you’ll want to know how much double‑digit; we’re not prepared to say that yet—and greater than 100 bps margin expansion. And I think this lower mid‑single‑digit organic growth range seems reasonable to us and not overly conservative. I think we’re really going to, I think, get to the more typical Bruker 200–300 bps above market. That’s more of a ’28 or ’29 thing—hopefully ’28. ’27 I think will still be a transition year but with very significant organic growth improvement compared to this year.

Subu Nambi (Analyst at Guggenheim)

Thank you for that. A follow‑up. Last quarter you indicated two‑thirds of the fourth‑quarter revenue was covered by backlog. Are you almost fully de‑risked at this point?

Gerald Herman (Chief Financial Officer)

I’d say pretty much at this stage we have pretty clear visibility into the backlog for the fourth quarter and we’re—you know, we still have execution‑related issues, but other than that I would say pretty much.

Frank Laukien (Chief Executive Officer)

Yeah. I mean you have, you know, about 60% instruments revenue, 40% consumables. Obviously on consumables and services you have limited backlog, and on the instruments you tend to have the backlog. And then it depends on sometimes issues with suppliers and then also more typically customer site readiness, which—I mean at any given quarter, this is not a fourth‑quarter thing—any given quarter it could be you kind of, even if you execute perfectly, just from the customers, it’s sort of a plus/minus 20 million uncertainty that you have because you don’t know exactly when they’ll be ready to take shipment.

But again, all in I think we feel—obviously it was not excessive, but there was more risk in our Q4 ramp previously—and now it’s not, it’s not a shoo‑in, it never is. It’s a big quarter, but it seems achievable.

Subu Nambi (Analyst at Guggenheim)

All right, thank you so much guys.

Frank Laukien (Chief Executive Officer)

Thank you. Thank you, Subu.

OPERATOR

Our next question comes from Luli from Bank of America. Please go ahead with your question.

Luli (Analyst at Bank of America)

Great, thank you for taking my questions. Maybe on the first one on the margin, I guess for Q4 do you still expect to see kind of favorable mix impact? And then maybe can you comment on kind of like the cost inflation that you’ve seen in the quarter and then full Q as well?

Gerald Herman (Chief Financial Officer)

Yeah, hi, it’s Gerald. With respect to the fourth quarter we are pretty comfortable now where we stand. As I said earlier, we have already put in place cost‑saving actions that will impact the fourth quarter, and I think that’s going to be favorable. When we look at the rest of our mix, we are expecting an ultra‑high‑field system, you know, into the mix that will also help our overall picture. We do have a stronger performance also in the semi space, which also will help our mix.

So I think fundamentally the fourth‑quarter pieces look pretty solid, I think, for us at this stage, and as I said earlier cost‑saving actions are already in place. So it’s more about execution on the revenue piece at this stage.

Frank Laukien (Chief Executive Officer)

Cost‑saving actions are accumulating throughout the year. It’s kind of a compounding effect and should be even more also visible in Q4 and certainly was very visible in Q3.

Luli (Analyst at Bank of America)

Got it. And then second question probably on China. So definitely year to date has been pretty strong performance. It seems like the money has fallen into capex orders. I’m wondering, kind of like looking forward in 2027, do you still expect kind of a pretty, like, durable bookings growth, and maybe just, like, what do you hear from the customer on the market? Thank you.

Frank Laukien (Chief Executive Officer)

China is—really, revenue earlier in the year was still going down because of weak orders in ’25. I think that has reversed in Q3 with some broad revenue growth and then year to date in China. That’s exactly—you’re exactly right—our order growth in China, and for BSI it has been really quite, quite good. And we don’t expect that to—we expect that to continue in Q4. It’s hard to read China beyond a few quarters. China sometimes we say, well, you’ve got to finish the quarter to know.

I think we have reasonable confidence that in Q4 the strength will continue. Hopefully that can be extrapolated into ’27. We have no reason to believe otherwise. But it’s just also more difficult to read China over one‑ or two‑year periods. But we’re encouraged: this year the trends have been—order trends have been very good—expected to be continued in Q4. And by the way, also in China AcaGov—it was not only US AcaGov that was weak but also China—and that has really turned in orders already earlier this year and continued in Q3.

OPERATOR

Our next question comes from Doug Schenkel from UBS. Please go ahead with your question.

Doug Schenkel (Analyst at TD Cowen)

Hey, good morning, guys. Thank you for taking my questions. I have one on BSI and then I’m going to ask another 2027 question. So BSI book-to-bill has now exceeded one for five consecutive quarters, yet BSI organic revenue remains under pressure. I think you were down 1% year to date. With US academic bookings now double-digit positive, China above 20%, and semiconductor metrology above 30% year to date, why aren’t we seeing a more meaningful revenue inflection?

And what gives you confidence that the bookings you’ve been talking about are going to start to convert in 2027? So that’s the first topic. And then more broadly on 2027, given the momentum you’ve described based on trends over the last few quarters, in a scenario where you’re growing, call it 4% to 5% next year, which I think is consistent with your commentary, it seems that momentum continues, that BSI would grow something like 3% to 4% and BEST closer to 10%. Again, not asking you to guide, but I just want to make sure there’s nothing in my logic that is off. Thank you very much.

Frank Laukien (Chief Executive Officer)

Your logic and math are impeccable as always, Doug. So I’m trying to get through all the parts of your question. BSI book-to-bill — why has it not shown yet in Q3? The biggest part is that semi pushout that we had highlighted when Gerald gave color on Q3 during our Q2 earnings call, because otherwise semi bookings have been just very strong year to date, greater than 30%. The other part that also has longer conversion times is NMR and sometimes related MRI, preclinical MRI. And that certainly felt the impact of 2025 AcadGov weakness in the US and in China. So the NMR part, until that grows again, also takes a little bit longer. So NMR and the semi pushout are why you haven’t seen it as much yet.

You will see it, as we’re predicting. This all implies BSI organic revenue growth in Q4. Not saying that the Q4 rate will then therefore be indicative as an exit rate for ’27, but it’ll probably be closer. And other than that, I think your logic isn’t something that I would object to or detect a flaw. This is one of the scenarios that you’ve just outlined with numbers. I’m not confirming that, but I’m also not contradicting it. It’s one of the scenarios of how it could play out.

It’s reasonable.

Doug Schenkel (Analyst at TD Cowen)

Okay. All right. Thanks, Frank. I appreciate you indulging me on that.

OPERATOR

Thank you. Our next question comes from Jack Meehan from Oberon Research. Please go ahead with your question.

Jack Meehan (Analyst at Oberon Research)

Thank you. Good morning, guys. I wanted to ask about the new MID segment. So it looks like it grew low singles in the quarter. Can you just talk about what you think is the right ongoing growth rate for this business in the medium term and any moving parts you would call out? I’m not sure if there’s any respiratory exposure to ELITech or anything like that. Just helping us frame that segment would be great.

Frank Laukien (Chief Executive Officer)

Yeah, great. Good question, Jack. Yeah, so no, we don’t have very much respiratory — not since COVID. That’s de minimis for us. It’s also one of the specialty diagnostics businesses that doesn’t have that China headwind that you’ve seen with some others, so it’s clean in that sense. Its infectious disease diagnostics tools had seen lower growth recently in microbiology and continued very nice growth in primarily ELITech-derived sample-to-answer molecular diagnostics there.

Just like last year, placements of these InGenius platforms — that’s the product name — have been well ahead of business plan, and that then bodes well for consumables acceleration next year and beyond. And they’re also developing some very, very cool new capabilities. We hope to get FDA clearance maybe before the end of the year, maybe in Q1, for the WAVE product, which is the antibiotic susceptibility testing for the US. There we’re going to go for the US market first, and that will further strengthen our microbiology and sepsis testing and, by the way, because of faster time to resolve, can potentially save quite a few lives or shorten ICU times and longer-term health effects. So it has an important societal function.

Wrapping up, I think while right now it’s a little bit slower, this is a high single-digit growth area long term, and it has very, very nice margins.

Jack Meehan (Analyst at Oberon Research)

Great, thank you for all that. Gerald, one below-the-line follow-up for you. So in the guide you raised the tax rate assumption from 26.5% to 27.5%. I was just wondering, as a 2027 question as we look forward, what you think is the right ongoing tax rate for the business and if there are any moving parts that have changed that we should be thinking about. Thanks.

Gerald Herman (Chief Financial Officer)

I mean, I think generally our position on taxes has been relatively consistent here. We’re tracking somewhere in that 27.5% range, and we have been for a period of time. We have a number of tax planning initiatives which we won’t discuss here, but just fundamentally we’ve got a number of initiatives underway that are expected to benefit the tax rate going forward, particularly in ’27 and ’28. We could talk more about that another time. But just fundamentally I would say the goal for us is to continue to drive that rate down at least 50 basis points on a year-over-year basis in ’27 and then consistently thereafter.

That’s our target.

Jack Meehan (Analyst at Oberon Research)

Perfect. Thank you.

OPERATOR

Our next question comes from Kyle Boucher from TD Cowen. Please go ahead with your question.

Kyle Boucher (Analyst at TD Cowen)

Hey, good morning. Thank you for taking my questions. I wanted to go back and build off of maybe a couple that were asked just around using the order book improvement. I guess how much of the improvement that you’re seeing is really easier comparisons from the back half of 2025 versus more tangible improvement in sentiment amongst those customers?

Frank Laukien (Chief Executive Officer)

It’s both, Kyle. Certainly the comparison was easier, right? We all know that. And I think the US AcadGov sector still suffers from lack of conviction. As you know, in the last federal fiscal year a lot of the funding and budget flush came late. It wasn’t linearly spent even though the budget overall wasn’t bad. And now people will begin to look: does this change with a different Congress — same president, different Congress, who knows. But I’m not saying that US AcadGov is bouncing back, snapping back, but it is getting better. Weaker comparisons help, and people are back to, okay, well, we need these new tools. We really need them to understand disease biology. And you really do — you’re just not going to get there with more of the same of what you have already. That’s foundational — what you have already, sequencing, etc. But you need much deeper insights to understand — and you all really need it.

It’s really shown the people that do have the money, which is in biotech and big pharma — they get these latest and greatest tools, and I think that’s kind of the… And also overseas, where they do have the budgets in AcadGov, they’re going for these tools, fully appreciating that they need to understand targets and mechanism of action, biology, and off-target effects — all these complexities much, much better if they want to have a better drug discovery and fundamental disease translational approaches.

So yeah, I think this inevitably also then strengthens. There still is a lot of state and philanthropic and other funding, and these days it’s not so much traditionally the Department of Chemistry needing more NMRs or mass specs. Now it’s the cancer or neurodegeneration or autoimmunity or cardiovascular disease academic medical centers, and they have other sources of funding. So that part is really getting stronger.

Kyle Boucher (Analyst at TD Cowen)

Got it. Thank you. Maybe just one more sort of conceptual question. You mentioned during the call that you’re below your target leverage range. I guess can you just talk a little bit about how you’re thinking about M&A going forward now that you’re under your leverage target?

Frank Laukien (Chief Executive Officer)

Well, we did some M&A this year. Mimetas was an important one, and it gets us into a new area. In addition to our preclinical imaging, the preclinical humanized organs-on-a-chip model that are in some ways closer to human physiology than animal models are, are tremendously important. It wasn’t very, very large M&A. You’re right, we didn’t do any of that this year, and we did some other, a couple of smaller acquisitions that were really very important for the BEMID — for diagnostic infectious disease diagnostic sequencing, including sequencing the metagenome, which also can help sometimes in extreme cases in detecting infections directly from blood without a blood culture — and then some enrichment technology.

So we did some smaller bolt-ons that were technically very, very important for our BEMID group and which I think also have, in addition to good market demand — and to Jack’s question earlier — in terms of new solutions that you’ll see launched in ’27 and ’28 in that group, microbiology and molecular diagnostics, I think they’ll also outgrow their markets perhaps quite significantly. So we’ve done some M&A. We have now again some more capacity for M&A, you know, but we also like EPS accretion, so we’ll be very disciplined.

Kyle Boucher (Analyst at TD Cowen)

Got it, thank you.

OPERATOR

Our next question comes from Dan Arias from Stifel. Please go ahead with your question.

Dan Arias (Analyst at Stifel)

Good morning, guys. Thank you. Frank, on the $20 million in pushed-off revenues, can you just refresh the view on confidence and timing there, and then more broadly, I guess, how are you finding the conversation on timing associated with semi product acceptance, revenue recognition? Obviously you’re seeing pushback on data center build-outs — that seems like it could build based on last night’s results — but then if you read about permits and construction activity, that still seems pretty good.

So I guess what would you say about the error bars around timing? Are they getting wider, narrower, or kind of just staying the same?

Frank Laukien (Chief Executive Officer)

It’s a good question, Dan. I’d say it’s kind of staying the same. I mean, these big fab projects — or within a fab, adding additional lines — are remarkably on time. I mean, that’s one industry that is extremely well managed, but that doesn’t mean you cannot have a one-quarter shift or sometimes a two-quarter shift. But that all continues as before — actually, usually you can really plan very well. Things don’t get delayed by a year in that industry.

Rev rec is not problematic there — when we ship and install, these systems work. I mean, these are very robust high-volume manufacturing metrology systems. These are not finicky scientific — I mean, they’re extreme nanoscience, but they’re very, very robust and high-throughput systems. Data center build-out in the U.S. — but we have to realize the U.S. is only a fraction; not a small fraction — it’s increasing but still a smallish fraction compared to what’s going on in Japan and in APAC. A little bit in Europe, but it’s mostly in China itself, where we can only deliver lower-end systems, but that’s booming. And then the rest of APAC and big build-out in Japan and, of course, Taiwan and Korea and Singapore are all investing very heavily.

So that build-out is, if anything, accelerating.

Dan Arias (Analyst at Stifel)

Yep. Okay. Okay, helpful. And then just, Gerald, maybe a bookings clarification. Were BSI bookings up during the quarter? You had said mid singles year to date, but the first two quarters of the year were double digits. So just trying to square away the 3Q number in order to get to the nine-month range here. Thank you.

Gerald Herman (Chief Financial Officer)

Yeah, I think the bookings performance is low single-digit in the third quarter. Third quarter last year was very, very strong — so actually I think that’s Q3 of ’25, and bookings were very strong. So, yeah, it is up year over year, low single digits, and it’s up sequentially in the mid to high single digits compared to Q2 of ’26. It’s all good. That’s.

Frank Laukien (Chief Executive Officer)

Yeah, it’s all moving. The momentum is there. I’d say yes. Yeah, you’re welcome.

OPERATOR

Our next question comes from Albert Hu from Citi. Please go ahead with your question.

Albert Hu (Analyst at Citi)

Perfect. Thanks for taking the question. Maybe on the previous question on semis you guys called out, you know, nothing’s really changed here. So are you guys still expecting that business to be around, call it 300 million to end the year, mid to high single digit growth, 30% EBIT margins, and does that translate to, just given the bookings, to maybe like a mid-teens grower, call it 400 million business next year? Appreciate the color. And I have a follow-up.

Frank Laukien (Chief Executive Officer)

Good question. You may have stumped us slightly. I think we’re not prepared to discuss that type— we’re not, we don’t give 27 guidance. We’re certainly not giving granularity yet. But directionally, I can’t reproduce all the math that you have in your head right now. But I think the direction is correct. And yeah, that business, if anything, would accelerate in revenue growth next year compared to this year. That is also correct. And its order growth has already been very good.

And we hope that we think that will continue into 27 and then, you know, beyond 27, we follow what the industry thinks. And the industry hasn’t really taken a position on 28, 29 yet, but they’re pretty sure that 27 things will continue to hum along with very fast growth rates.

Albert Hu (Analyst at Citi)

Got it. Okay. And then I think you previously called out some potential NIH budget flush in September. Is that what you guys saw that drove the double-digit A and G bookings this quarter? And I guess, do you expect that to flow through given the six to nine month conversion time for AG to grow next year? Or how should we kind of juggle just the strong double-digit bookings and the forward thinking? Appreciate it.

Frank Laukien (Chief Executive Officer)

Yeah, right, Albert. I think the double-digit bookings in Q3 had a lot to do with the weak Q3 of last year and maybe some incremental orders that came. But there was a budget flush at NIH for sure, that’s well documented. Most of that we think will help us with Q4 orders, and perhaps some of that will still, you know, take a little bit of time and go into Q1 orders. So the budget flush was not significantly responsible for improved bookings in Q3.

I think it’s just, you know, there’s a lot of pent-up demand. People need the newer tools. At some point they just do whatever it takes within their university or academic medical center or research hospital to get the new tools. And they’re getting used to this slightly less predictable federal funding, and they’re just dealing with this new— and, you know, they’re settling into that and are now kind of back to where they’re placing orders for what they really need.

And then the budget flush that did take place probably for us primarily will help Q4 and Q1 bookings.

Albert Hu (Analyst at Citi)

Perfect. Thanks so much.

OPERATOR

And with that, ladies and gentlemen, we will be ending today’s question and answer session. I would like to turn the floor back over to Joe Costa for closing comments.

Joe Costa (Director of Investor Relations)

Thank you for joining us today. Bruker’s leadership team looks forward to meeting with you at an event or speaking with you directly during the fourth quarter. Feel free to reach out to me to arrange any follow-ups. Have a good day.

OPERATOR

And with that, ladies and gentlemen, we’ll conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.

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