丹纳赫 (DHR) 2026年第三季度业绩电话会议：核心增长加速，上调每股收益指引lg...

核心要点

• 丹纳赫公布2026财年第三季度销售额为66亿美元。核心营收增长3%，扣除呼吸道业务营收后增长5.5%，增速较第二季度加快100个基点。
• 调整后营业利润率达到29%，同比提升110个基点。调整后稀释每股收益增长约11.5%至2.11美元。
• 生物技术核心营收增长5%，生命科学增长4.5%，扣除呼吸道业务营收后的诊断业务增长7%。
• 在上游耗材和树脂的推动下，生物工艺订单录得15%左右的增长。管理层维持对2026年生物工艺核心业务实现中个位数增长的预期。
• 丹纳赫将2026全财年调整后稀释每股收益指引从8.45-8.60美元上调至8.57-8.62美元。
• 展望2027年，管理层将扣除呼吸道业务营收后的核心营收增长4%-5%定为当前基准起点，同时强调正式指引将于明年1月发布。

核心财务业绩

业务与运营表现

生物技术业务

生物技术核心营收增长5%。生物工艺增长接近中个位数区间的上限，其中耗材增长中个位数，设备增长低个位数。

在上游耗材和树脂的引领下，订单增长达15%左右。今年迄今设备订单保持强劲的双位数增长。管理层表示，健康的商业化生产活动和强劲的新项目管线支撑了需求。

研发与医疗核心营收录得低个位数下降。蛋白质研究仪器的增长被实验室耗材的出货节点因素所抵消。

生命科学业务

生命科学核心营收增长4.5%。在航空航天和微电子业务支撑下，颇尔的应用过滤业务增长中个位数。受制药及生物制药客户对SCIEX产品的需求、美国学术界支出的适度改善以及ZenoTOF 8600的强劲势头带动，生命科学仪器业务亦增长中个位数。

生命科学耗材增长低个位数。IDT受益于微小残留病变和下一代测序产品，而Abcam则受益于学术界需求的改善以及制药和生物制药项目的推动。

管理层表示，大型制药和生物制药需求保持强劲。学术界需求虽仍低于历史水平，但已出现环比改善。

诊断业务

扣除呼吸道产品后，诊断业务核心营收增长7%。若计入约650个基点的呼吸道业务逆风，该部门核心增长率为0.5%。

临床诊断业务增长中个位数。徕卡生物系统在数字病理领域保持强劲势头，贝克曼库尔特诊断创下两年来北美核心增长最高的季度。管理层提到了包括DxI 9000在内的本土/新产品以及中国政策相关压力的缓解。

赛沛的非呼吸道分子诊断营收实现低双位数增长，主要由A群链球菌、病毒学及性健康检测领跑。

区域市场趋势

发达市场核心营收持平。西欧增长中个位数，而北美则录得低个位数下降，这主要是由于呼吸道业务营收减少。

高增长市场增长约10%。中国市场实现高个位数增长，三大业务板块均取得增长。管理层将这一改善归因于生物技术和生命科学领域的资金与投资状况更加健康，以及诊断业务受医疗政策变化的影响有所减弱。

人工智能、创新与并购

丹纳赫推出了首个由AI驱动的自主实验室，集成了Abcam、思拓凡、贝克曼库尔特生命科学、Genedata、IDT和美谷分子仪器的技术。管理层表示，该平台旨在将从创意到验证试剂的过程缩短最高达8倍，产出量比现有模式提升最高达10倍。

该公司还在与英伟达合作，将丹纳赫的仪器、自动化设施和软件与AI及先进计算能力相结合。管理层表示，AI相关需求目前尚不显著，但已开始对订单和营收带来适度贡献。

Masimo在并入丹纳赫后的首个完整季度实现了高个位数的营收增长。管理层表示整合进展顺利，成本节约和商业协同效应机会正在开发中。徕卡生物系统还在第四季度初完成了对StatLab的收购。

管理层指引

基于当前的订单趋势，管理层预计生物工艺业务的增长将在2027年继续改善，但未提供具体的部门正式指引。丹纳赫继续将生物工艺视为长期可持续实现高个位数营收增长的业务。

风险与关注焦点

• 呼吸道业务营收对感染率和流感季的时间节点依然敏感。管理层表示，年度预订量可能在其基线假设上下浮动数亿美元。
• 学术界需求环比有所改善，但仍低于历史水平。
• 丹纳赫的2027年增长框架属于初步性质。管理层计划在1月发布详细指引之前，先按常规完成第四季度的规划程序。
• 制造业回流通过旧厂改造活动对当前订单产生了适度贡献，但更大的新建项目仍处于规划阶段。管理层预计对损益表的更为显著的贡献将在2028年或更晚开始显现。
• 第三季度调整后营业利润率适度受益于关税退款。

分析师问答环节要点

商业执行力： 首席执行官朱莉·蒙哥马利（Julie Montgomery）将盈利性核心增长和明确的市场份额提升列为丹纳赫的核心绩效衡量标准。公司计划通过丹纳赫商业系统推进销售执行标准化，并扩大各运营子公司之间的协同销售。管理层表示，其一体化诊断方案已创造了数亿美元的增量营收机会。

2027年增长框架： 管理层将扣除呼吸道业务营收后4%-5%的核心增长描述为基准起点，而非正式指引。会议讨论了生物工艺订单改善、中国政策压力缓解以及终端市场复苏，但公司希望在提供详细展望之前先评估第四季度的表现。

资本配置： 蒙哥马利表示，并购（M&A）仍是丹纳赫首选的资本配置方式。重点将放在深化现有业务地位并符合公司回报标准的交易上。她将Masimo描述为战略互补的连续诊断资产，而非转向更广泛的医疗科技并购。

生物工艺与制造业回流： 管理层预计生物工艺增长率将在2027年得到改善。公司表示，美国制造业回流可能代表着10亿美元的市场机遇，但预计该收益将在数年中逐渐显现，并主要从2028年开始。

AI战略： 丹纳赫计划通过涵盖实验设计、试剂生产和检测的自主工作流程，将AI与物理实验相连接。在内部，管理层预计AI和丹纳赫商业系统将改善商业流程、研发周期和生产力。

电话会议全文实录

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完整财报电话会议逐字稿

管理层陈述

Operator

My name is Chelsea, and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to Danaher Corporation's Third Quarter 2026 Earnings Results Conference Call. [Operator Instructions]

I will now turn the call over to Ms. Rachel Vatnsdal, Vice President of Investor Relations. Ms. Vatnsdal, you may begin your conference.

Rachel Vatnsdal Olson

Good morning, everyone, and thanks for joining us on the call. With us today are: Julie Sawyer Montgomery, our President and Chief Executive Officer; and Matt Gugino, our Executive Vice President and Chief Financial Officer. I'd like to point out that our earnings release quarterly report on Form 10-Q, the slide presentation supplementing today's call, the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call and a note containing details of historical and anticipated future financial performance are all available on the Investors section of our website, www.danaher.com, under the heading Quarterly Earnings.

The audio portion of this call will be archived on the Investors section of our website later today under the heading Events and Presentations and will remain archived until our next quarterly call. A dial-in replay of this call will also be available until November 4, 2026.

During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. Our Form 10-Q and the supplemental materials I referenced describe additional factors that impacted year-over-year performance. Unless otherwise noted, all references in these remarks and supplemental materials to company-specific financial metrics relate to results from continuing operations in the third quarter of 2026, and all references to period-to-period increases or decreases in financial metrics are year-over-year. We may also describe certain products and devices which have applications submitted and pending for certain regulatory approvals or are available only in certain markets.

During the call, we will make forward-looking statements within the meaning of our federal securities laws, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements, except as required by law.

With that, I'd like to turn the call over to Julie.

Julie Montgomery

Thank you, Rachel, and good morning, everyone. Before we get into the quarter, I'd like to share my perspective on Danaher today and the opportunity ahead as I begin this next chapter as CEO. The opportunity for Danaher is straightforward, to become the defining leader in life sciences and diagnostics, a company that unambiguously gained share, delivers sustainable profitable growth and helps our customers improve outcomes for patients around the world.

The foundation we built at Danaher is strong. We operate leading businesses, foster deep customer relationships and empower talented people, all enabled by the Danaher Business System. At the same time, growth over the past several years has not consistently reflected the full potential of our portfolio. We've navigated significant changes in our markets but regardless of the environment we hold ourselves to a higher standard. We see a meaningful opportunity to accelerate sustainable core revenue growth, gain share more consistently and more fully translate the strength of our portfolio into differentiated performance. I'm confident in what we've built and I'm energized by what I've seen across Danaher these last few months. Our focus now is strengthening execution and delivering on that potential.

Recently, I had a conversation with one of our executives preparing for a customer meeting related to Alzheimer's disease. What started as a discussion about how one of our businesses could help address a particular part of that customer's challenge, quickly expanded to cover the role seven different operating companies could play across discovery, AI-enabled target selection, laboratory automation, process development, scale-up and diagnostic testing.

And when the challenge is Alzheimer's disease, speed matters, both to the scientists working to understand it and the families waiting for answers. That conversation reinforced something important. Our customers don't think about their challenges through the lens of our organizational structure. They have a problem to solve, and they want the best partnership and solutions we can bring them. I see this as critical to Danaher's next chapter and some of our greatest opportunities sit at the intersections of our businesses. We will preserve what makes our operating company structure advantage, the customer intimacy, the accountability while making it easier to bring the full power of Danaher to our customers.

A foundation and the power of the Danaher Business System have given us leadership positions across the life sciences and diagnostic markets and a unique role in helping accelerate the translation of scientific discovery and to human impact. Our Life Science businesses enable discovery, our Biotechnology businesses help turn those discoveries into scale and accessible therapies and our diagnostics businesses helped guide treatment. Together, Danaher spans a broad path from experiment to patients with DBS adding speed and operating discipline at scale. We call that innovation at the speed of life, helping close the distance between human need and the science that answers it. And as we enter this next chapter, we'll accelerate that ambition by focusing on four strategic priorities: commercial excellence, innovation, talent and effective capital allocation. Each is important, but our most immediate opportunity is commercial execution.

Danaher has successfully repositioned its portfolio with three platforms across the life sciences and diagnostics markets. With that portfolio transformation largely complete, our focus is shifting from reshaping the portfolio to delivering more growth from the businesses we own. We will focus our leadership attention on exceptional commercial execution, enhancing our pursuit of unambiguous share gain across Danaher. We will drive consistency and rigor and commercial execution across our businesses. This means simplifying and strengthening our commercial processes and empowering our leaders to make more entrepreneurial decisions.

We also have an opportunity to make it easier for our customers to take advantage of the full power of Danaher. Our operating companies have important brands and deep customer relationships. These will remain fundamental to how we compete, but Danaher has tremendous scale and breadth, and we can do more to use that advantage. That means making the broader strength of our portfolio and capabilities more accessible to customers.

We've already taken practical steps to show up as a more connected Danaher. In diagnostics, for example, we are successfully deepening customer relationships by bringing leaders from our cross our businesses together with key customers to look across the portfolio, better understand their priorities, and identify where a more coordinated approach can create additional value. We do this by having our key diagnostics leaders in the same room at the same time with our key customers to understand their biggest pain points and where we can drive incremental value. This approach has generated meaningful incremental revenue opportunities and is helping drive share gains across our diagnostics businesses.

And as we bring more of Danaher to our customers, we can also become more systematic about connecting capabilities across our businesses to solve more customer needs. Danaher Cytiva's recent collaboration deliver an end-to-end mRNA solution is a great example, helping streamline our customers' development processes while meaningfully accelerating time lines.

Ultimately, our commercial strategy is straightforward: execute better and more entrepreneurially, show up together as Danaher for our customers and connect our capabilities where we can create greater value. We will make it easier for customers to access the full strength of Danaher and look to us when trying to solve their most important challenges.

Our second priority is delivering more innovation. Danaher is already at the forefront of innovation, but I believe strengthening our innovation capabilities represents one of our largest opportunities to accelerate long-term growth. Delivering on our brand promise, innovation at the speed of life means we will be deliberate and strategic about where we invest in R&D and ensure we appropriately allocate resources behind our best ideas. That means more closely linking strategy and R&D investments, concentrating resources behind the highest potential initiatives and working more closely across our businesses and external partners to move promising innovations faster.

We will also fund transformational opportunities at the enterprise level when we believe Danaher has a clear right to win and larger investment can create meaningful competitive advantage. These decisions will require clear choices and greater enterprise level conviction about where we can create the most value. Innovation cycles take time, but over the long term, we believe this more focused approach can support higher and more durable core revenue growth while turning more scientific discoveries into meaningful human impact. And to me, this is the heart of innovation at the speed of life, helping promising science move faster towards the patients who need it.

Our third priority is being the home and destination for exceptional talent. We believe our ability to attract and develop exceptional talent and scientific, AI, commercial and operating disciplines will increasingly set us apart from competitors. We also need to develop and deploy our people more intentionally against Danaher's highest priority growth and innovation opportunities.

Danaher has given me that kind of exposure in my own career learning DBS and then applying it across commercial, R&D and business leadership. I want us to continue to create exceptional opportunity for the next generation of leaders. As we evolve DBS for the AI era, I believe we can create an even more compelling place for the best talent in our industry.

And our fourth priority is being more disciplined with our capital and resources. M&A and capital deployment have been essential drivers of Danaher's growth and will remain so. We will maintain the robust investment criteria that has served us well for many decades while bringing strategic clarity and discipline to how we allocate capital and resources. We are focused on deepening our positions in attractive markets and identifying strategically compounding areas that build from the strengths we already have in our businesses. Our objective is to deliver high returns on our investments with greater consistency while positioning Danaher to sustainably differentiated and profitable growth.

Across each of these priorities, there is a common idea. We create more value by building a stronger, more connected company. That doesn't mean changing what makes our operating companies successful. It means preserving their customer intimacy and accountability while making it easier to share ideas, capabilities, talent and resources across Danaher and using our scale where it gives us an advantage.

AI is one capability we believe can help us do just that. We believe the combination of AI and DBS will be an important competitive advantage. CBS gives us a common way to solve problems, improve processes and scale what works across Danaher. We believe that approach can help us bring AI solutions to life faster and more effectively than many. Over time, we believe AI can make DBS simpler and more powerful while DDS can help us implement AI with the rigor and consistency to have long defined Danaher.

We see opportunities for AI to strengthen commercial execution and innovation. For example, helping our teams identify opportunities earlier, improved sales funnel management and dramatically reduce R&D time lines. AI can help simplify work and drive greater productivity. But AI isn't only about making Danaher better. It is also changing the needs of our customers and creating new opportunities across our portfolio. For example, we see growing demand for solutions that cut across our life sciences businesses that enable more automated and autonomous labs and workflows.

We also see longer-term opportunities across our Biotechnology and diagnostics platforms to make therapies more efficiently and make treatment decisions more precisely. This is why we are accelerating AI deployment across the enterprise and establishing AI partnerships.

Stepping back, we believe a more connected Danaher with a stronger focus on commercial excellence, innovation and talent can be a stronger Danaher. We intend to bring the best of Danaher to our customers to better leverage our talent, platforms and brand and simplify how we operate, so our teams can focus on the opportunities that matter most. Together, these actions could help us move faster and more fully realize the potential of our portfolio.

So I am incredibly excited about what lies ahead. We are starting from a position of strength with meaningful room to deliver more. That will take time, and we know credibility will be earned through results. Our focus now is making clear choices about where we invest and executing with greater speed and consistency. We believe that can accelerate profitable growth, drive share gains, and most importantly, help our customers improve outcomes for patients around the world.

With that, let me turn to our third quarter results. Our third quarter came in ahead of our expectations on both the top and bottom line with Biotechnology, Life Sciences and Diagnostics core revenue, excluding respiratory revenue, all growing mid-single digits or better. Core revenue growth, excluding respiratory revenue improved to 5.5%, and we delivered a nearly 30% adjusted operating profit margin. These results reflect both improved end market conditions and the benefit of strong commercial and operational execution across the portfolio.

We're particularly encouraged by the improved momentum we saw across our businesses. Underlying demand across large pharma and biopharma remain robust. Biotech activity continued to strengthen and while academic demand remained below historic levels, demand improved sequentially, meanwhile, clinical and applied end markets remain healthy and continued to perform well.

Having spent considerable time with our teams over the past several weeks, I've seen firsthand talent, innovation and customer focus that make Danaher unique. Let me walk you through a few notable examples from across Danaher this quarter.

During a recent visit, Cytiva site in Upsala, Sweden, I have the opportunity to spend time with the teams developing and manufacturing some of our industry-leading products. Seeing firsthand the depth of science and engineering behind these technologies reinforce my confidence in our competitive position. I was particularly impressed by the process development team and how closely that team works side-by-side with customers to solve their most difficult challenges. That partnership has long been important and traditional monoclonal antibodies and it becomes even more valuable as our customers move towards more complex molecules and modalities.

We're bringing innovation and process expertise to help customers solve those challenges. And importantly, we're seeing that differentiated approach help us win more specifications with customers.

Next, we recently announced our first AI-powered autonomous lab. Based on Abcam, this lab brings together AI, robotics and technologies from across our portfolio, including Cytiva, Beckman Coulter Life Sciences, gene data, IDT and molecular devices to offer connected design, make and test workflow. By continuously learning from each experiment, the platform designed to help researchers move from idea to validated reagent up to 8x faster while generating up to 10x higher volume compared to existing models, helping accelerate scientific discovery while providing the rigorous quality and reproducibility required to advance AI-driven drug discovery.

Our partnership with NVIDIA, announced last week, will further advance this vision by connecting our instruments and workflows with NVIDIA's capabilities to help shape autonomous science for our customers.

On the capital allocation front, Leica Biosystems closed the acquisition of StatLab in early Q4. StatLab strengthens Leica's value proposition by enabling a more complete pathology workflow, while advancing our integrated delivery network strategy and helping clinicians diagnose cancer faster and more precisely. We're very pleased to welcome the StatLab team to Danaher.

Finally, Masimo, our other recent acquisition, continued to track ahead of our initial expectations and delivered another quarter of high single-digit revenue growth. Having spent time with the team just last week, the integration is progressing well across the business with a healthy funnel of cost savings and commercial synergy opportunities.

The team has also continued to innovate at an impressive pace recently receiving FDA clearance for its Smartset platform that can help detect atrial fibrillation, a common heart rhythm disorder that often goes undetected and significantly increases the risk of stroke. This technology can help patients earlier who may benefit from further medical evaluation and care. I want to congratulate the Masimo team for their sixth FDA clearance this year and for extending the value of their technology beyond monitoring to help detect important clinical conditions like atrial fibrillation.

And with that, I'll turn the call over to Matt, who will walk you through our Q3 results and guidance in more detail.

Matthew Gugino

Thanks, Julie, and good morning, everyone. As Julie stated, we delivered a solid third quarter with better-than-expected growth, earnings and cash flow. Sales were $6.6 billion and core growth, excluding respiratory revenue, was up 5.5%, and encouraging 100 basis points acceleration from the second quarter and a continuation of the improvement we've seen throughout the year.

Respiratory revenue, while slightly better than expected, represented an approximately 250 basis point headwind in the quarter, resulting in core revenue growth of 3%. Geographically, core revenues in developed markets were flat. Western Europe grew mid-single digits and North America was down low single digits, primarily driven by lower respiratory revenue.

Core revenues in high-growth markets increased approximately 10% with healthy growth across all major regions. China was up high single digits, with growth in all three of our segments. Biotechnology and Life Sciences were supported by healthier funding and investment levels, and Diagnostics continue to move beyond the most significant impacts of China's health care policy changes.

Our gross profit margin for the third quarter was 58.5%. Our adjusted operating profit margin of 29% was up 110 basis points and exceeded expectations, driven primarily by strong operational execution with a modest benefit from tariff refunds received during the quarter.

Adjusted diluted net earnings per common share of $2.11 were up approximately 11.5%. We generated $1.6 billion of free cash flow in the quarter and $4 billion in the first 3 quarters of the year, resulting in a year-to-date free cash flow to net income conversion ratio of 128%, further underwriting the differentiated quality of our earnings.

Now turning towards our business segments. Core revenue in our Biotechnology segment increased 5%. Core revenue in Discovery and Medical decreased low single digits with solid growth in protein research instrumentation more than offset by timing in lab consumables. Core revenue in bioprocessing grew towards the upper end of mid-single digits, modestly better than our expectations. Consumables were up mid-single digits, led by upstream consumables, while equipment increased low single digits.

Orders grew mid-teens in the quarter with particular strength in both upstream consumables as well as There's no change to our full year expectation of mid-single-digit core revenue growth for bioprocessing. Demand trends remain healthy across the business supported by strong commercial production activity and a robust pipeline of new programs. These underlying market trends combined with Cytiva's differentiated portfolio, deep scientific expertise and recent innovations reinforce our confidence in the business' ability to deliver sustainable, high single-digit long-term revenue growth while helping customers improve yields, increased manufacturing efficiency and scale new therapies.

Now turning to our Life Sciences segment. Core revenue increased 4.5%. Core revenue in Pall's applied filtration business increased mid-single digits driven by continued robust growth in aerospace and microelectronics. Core revenue in our Life Sciences instruments businesses increased mid-single digits in the quarter. SCIEX led the way with strong demand from pharma and biopharma customers, a modest improvement in U.S. academic spending and continued momentum for new products, such as ZenoTOF 8600. Beckman Coulter Life Sciences also delivered strong results, including in automation where the team has seen increased demand for AI-enabled solutions and services.

Core revenue in our Life Sciences consumables businesses collectively grew low single digits in the quarter, driven by continued momentum in IDT's MRD and next-generation sequencing product lines while Abcam saw improved academic demand and solid traction from pharma and biopharma commercial initiatives.

Now moving to our Diagnostics segment. Core revenue growth, excluding respiratory revenue was up 7%. Respiratory revenue was an approximately 650 basis point headwind in the quarter, resulting in core revenue growth of 50 basis points. Core revenue in our Clinical Diagnostics businesses increased mid-single digits in the quarter. We saw notable performance at Leica Biosystems with particular strong momentum in digital pathology as well as advanced

Beckman Coulter Diagnostics also delivered its highest core growth quarter in North in 2 years. The traction we saw from new product introductions, including the DxI 9000, together with easing China policy-related headwinds reinforces our confidence in Beckman's competitive position and ability to accelerate their growth trajectory.

In Molecular Diagnostics, core revenue in Cepheid's nonrespiratory business increased low double digits led by growth in Group A Strep, virology and sexual health assays.

Respiratory revenue was approximately $350 million in the third quarter, down year-over-year due primarily to lower global infection rates but modestly ahead of our expectations as we saw customers purchase ahead of the upcoming respiratory season.

Now let's turn to our fourth quarter and full year 2026 outlook and give you an initial perspective on how we're thinking about 2027. In the fourth quarter, we expect core revenue growth, excluding respiratory revenue to be in the 4% to 5% range. We expect respiratory revenue to be an approximately 150 basis point headwind. Additionally, we expect the fourth quarter adjusted operating profit margin of approximately 29.5%.

For the full year 2026, we are increasing our full year adjusted diluted net EPS guidance to $8.57 to $8.62 versus our prior range of $8.45 to $8.60. This reflects the benefit of our third quarter outperformance and represents double-digit year-over-year EPS growth.

Now turning to 2027. While it's still too early to provide a formal outlook, we want to give you some perspective on how we're thinking about core growth next year. We're encouraged by the improvement in the end markets and the growth we've delivered throughout 2026. Excluding respiratory revenue, core revenue growth has averaged 4% to 5% over the past several quarters.

So as we look to 2027, we think that 4% to 5% core revenue growth, excluding respiratory revenue is the right starting point as we sit today. We'll provide a more quantitative and detailed guidance outlook in January, but hopefully, this gives you a helpful starting point for how we're thinking about next year.

With that, I'll turn the call back over to Julie.

Julie Montgomery

Thanks, Matt. So to wrap up, we're pleased to deliver better-than-expected third quarter results and encouraged by the improving growth trends we saw across the business. As I reflect on my first few weeks as CEO -- where I spent time with our teams and customers has only strengthened my conviction and the solid foundation Danaher has built.

My focus now is simple, create more value for customers, accelerate innovation, attract and develop great talent and deploy capital in ways that strengthens Danaher for the long term. These priorities are designed to drive faster and more durable core growth deliver unambiguous share gains and more fully translate the strength of our portfolio into differentiated performance.

While realizing the full potential of these opportunities will take time, I am confident that with DBS as our foundation, we're uniquely positioned to turn those opportunities into results for our customers and the patients they serve, our associates and our shareholders. I'm excited about what we can accomplish together and the results we can deliver as we continue building an even stronger Danaher.

So with that, I'll turn the call back over to Rachel.

Rachel Vatnsdal Olson

Thanks, Julie. That concludes our formal comments. We're now ready for questions.

Operator

[Operator Instructions] Our first question will come from Doug Schenkel with UBS.

分析师问答

Unknown Analyst

Julie, welcome to the call. So as the new CEO, you're new to the role, but as we all know, you are certainly not new to Danaher. So recognizing that and also that this has been a challenging period for the company, but also that Danaher has a legacy of operational excellence and solid capital deployment, how are you balancing the legacy of a company that has business school case study is written about its strategy and execution versus the opportunity and need to make change? Essentially, as you sit here today, what's foundational? And how do you think about evolving the playbook?

Julie Montgomery

Thank you for the thoughtful question. Danaher is a great company and one I am incredibly proud to lead. And we have a great heritage with HBS case studies written about us. And I know exactly what you are referring to as I read that case study when I decided to join Danaher 9 years ago.

We also have truly unique differentiators that continue to serve us well today. Exceptional talent, a great portfolio and a continuous improvement culture supported by a business system that is unparalleled. At the same time, as I said in my prepared remarks, we have an opportunity to grow at a higher rate than we have in recent years. And when I talk to our teams, I'd say the unambiguous share gain is our true report card. So I want to preserve what makes us great, but also ensure we are focused on the most important priorities for who we are today.

So let me break that down a bit. You heard me talk about becoming a more connected Danaher. When that Harvard case study was written, our businesses were lower growth markets and our customers typically brought from a single operating company. We are in a very different situation today. Higher-growth scientific markets with the same customers buying across 3, 6, 12 operating companies. So we will keep the advantages of our operating company structure in place. I think of that as the accountability, the customer and technical intimacy and the unique development opportunities for our people. But we will also work in a more connected way that makes it easier for customers to access the full power of Danaher.

I still talk to customers who are surprised to learn that company XYZ is part of Danaher, and yet we are a strategic partner to those customers. These customers are inevitably interested in a broader conversation that can lead to higher share of wallet for us and better solutions for the customer.

In the same thinking, ensuring we are focused on what matters most for the company we are today extends to our other priorities. You heard me say we will focus more on commercial excellence. Now that we are in a growthier markets, more leadership focus on commercial prowess leads to more value creation.

I also spoke about strategy-led innovation. This is important because our markets today are fueled by scientific discovery. And as a result, we need to know where the puck is going and to make focused higher impact investments.

In talent, for this age in these markets, we need to develop and attract the best AI science technology and operating talent to innovate at the speed of life. And we will want to continue to focus on capital allocation while ensuring we do so in strategically compounding ways to help the flywheel of our businesses turn better and faster.

So what you hear me saying is, I don't view these priorities as a generic playbook, but as what best enables us to become that defining leader now that we are a fully scaled life sciences and diagnostics company.

Unknown Analyst

One follow-up on your prepared remarks from earlier on the call. You outlined several priorities. What's the biggest one that you expect to have the greatest impact over the near term, say, over the next 12 to 18 months? And what operating or financial metrics should investors use to assess progress pursuant to that top priority?

Julie Montgomery

Sure. Step one is really prioritizing and aligning our teams around accelerated profitable growth and unambiguous share gain as the report card, and that's what our investors should be looking for. And that leads to a clear near-term opportunity to further drive commercial excellence across the enterprise. This means being super clear on simple but powerful expectations for our sales team and what leaders will drive and inspect. And frankly, this is where DBS creates a real advantage for us.

What will then further accelerate this is when we consistently go up as a more connected Danaher. There are pockets across the business where this is working extremely well. I mentioned, we've seen a lot of success with this in diagnostics where we started to speak to customers as diagnostic solutions in addition to individual operating companies and this has led to much more senior and strategic dialogues and value propositions that have created several hundred millions of dollars of opportunity in a short time.

We are also seeing this in our life sciences approach to the new tech bias, and we have approached these AI-native drug development companies this way from the start, and I really like the traction we are seeing. And one of the things I've been pleased to learn over the course of my transition to CEO is that when I talk to customers across all three of our platforms, they want to see more of this from us. So these changes will take some time, but our report card is higher core growth, profitable core growth, an unambiguous share gain.

Operator

Our next question will come from Vijay Kumar with Evercore ISI.

Vijay Kumar

Julie, congratulations to you. I guess my first question, Matt, I think you made some helpful comments here on the fiscal '27 framework. Curious, when I look at your bioprocessing segments came in quite solid year in 3Q, and you have a few moving pieces in '27. Instrument orders have been quite solid year-to-date. You could see some activity from onshoring. You do have a catch-up from this order push out in consumables. So I'm curious, should bioprocessing be pushing very high singles, low double digits when you think about fiscal '27?

Matthew Gugino

Yes. Vijay, thanks for the question here. So I think just to start with bioprocessing here for '26 and how we feel like we're going to finish the year. So -- no change to our full year expectations for 2026 for bioprocessing, mid-single-digit core growth. We saw Q3 was actually a bit better than we expected the upper end of that mid-single-digit range. And -- from an orders perspective, they remain strong, mid-teens order growth that was led by upstream consumables as well as resin. So given order trends and those order trends that we're seeing, we'd expect to see bioprocessing growth rates continue to improve in 2027.

We gave that overall Danaher outlook of 4% to 5% core growth ex respiratory as we want to get through our planning processes and as we'll do with the rest of our businesses, we want to see how Q4 shapes up here before we provide more formal guidance, whether it's around bioprocessing or the other segments here. But all in, good to see the order trajectory view bioprocessing long term is a high single-digit growth business and encouraged by what we're seeing.

Julie Montgomery

And Vijay, I can add a little bit of color here because as you would imagine, this is a place where I spent quite a bit of time recently both with the team and with customers. And my conclusion is we have a differentiated portfolio with the most comprehensive offering in bioprocessing. And this really positions us to win with virtually any customer across nearly every step of the workflow.

We like the secular drivers. There's a record number of monoclonal antibodies coming to market, the acceleration of biosimilars in newer modalities like the antibody drug conjugate, cell therapy, the by trispecifics are adding to the volume and, of course, the reassuring opportunity. And as I meet with customers, it is clear they value us as a critical partner and not just a supplier. They bring to us their most critical problems, and we are very good at solving them. So all in, very confident that bioprocessing is a high single-digit business here over the long term, as Matt said.

Vijay Kumar

That's helpful, Julie. And maybe one for you on capital deployment. I'd love to hear your view of this on capital deployment. You come from Diagnostics. We've seen a couple of acquisitions within the segment. How are you thinking of M&A opportunities and areas of interest for Danaher? And the reason I ask on areas of interest is, in Masimo, is that kind of signaling a more meta turn, if you will? Or how are you thinking of areas of priorities?

Julie Montgomery

Yes. Thanks, Vijay. M&A remains our bias for capital allocation as we think it's the best way to compound returns over the long term. And we're going to continue to look for strategically compounding M&A. And of course, we'll keep a robust investment criteria that has served us well for decades. And we see Masimo and just recently here StatLab, as good examples of this. And I see opportunities to strengthen all three of our platforms, both organically and inorganically through M&A.

You talk about Masimo. I actually don't see that as a med tech M&A play. I see it as a continuous diagnostic that is strategically compounding with our Diagnostics business. We already see the commercial synergies at work, and we're able to have scientific conversations around how the combination of continuous monitoring and biomarkers can lead to better outcomes for patients. So just another example of something that we view as strategically compounding, there's certainly no bias here to medtech.

Operator

Our next question comes from Tycho Peterson with Jefferies.

Tycho Peterson

Matt, I want to stress test the assumptions you kind of put out for next year, the 4% to 5%. I have a lot of people asking why you're not kind of accelerating here. I appreciate your comments on bioproduction a minute ago. You had the order residues, obviously in biotech that should come through. You don't have the China VBP headwinds. You've got recovery in biotech, academic picking up a bit. So why on earth would respiratory be the same? I think you kind of alluded to the fact you just want to see how 4Q shapes up and 4% to 5% is maybe a floor, but maybe get us comfortable there's something that you're not baking in that's getting worse.

Julie Montgomery

Tycho, this is Julie, of course. So as Matt discussed, we've delivered core growth ex respiratory in the 4% to 5% range the last few quarters. And so we think that's a reasonable starting point for 2027 based on the current in market conditions. I'm only a few weeks into the CEO role, but the time I spent with our teams and customers, and certainly reinforced my confidence in our positioning and the improving in markets, but we really want to work through our typical planning process here that we go through in Q4, and then we will provide you a more quantitative outlook in January.

Tycho Peterson

Okay. And then follow-up, Julie, on Diagnostics, on Respiratory, you guys did a good job walking down expectations for Respiratory this year, understand weak flu season overall, but why another $100 million cut when the data is starting to turn here, 3Q came in above. Is that conservatism? Or are you seeing something in the data that leads to the cut here? And then as we think about '27, we have a lot of questions about the endemic rate. Is $1.5 billion the right way to think about it? Or how do you think about the new endemic rate?

Julie Montgomery

Yes. Tycho, we are planning for $1.5 billion in Respiratory this year. And I think that's also the right starting point for next year as well. And really, what I want to do here is to create an expectation for a down the middle of the road flu season. And as you know, there is variability in flu seasons year-to-year season. And yes, that can create a couple hundred million dollars of bookings around that number. What we're seeing in Q4, it sounds like you follow it. As you know, we've been lower than last year. almost every week this year. There's been just this little bit of a tick up recently, but we think that's way too early to call. .

And you really can't say much about the flu season until you see the ILI curve tick above 3%, and then you're sort of officially in the season. And that doesn't typically happen to late November, early December after everyone's enjoyed some Thanksgiving Turkey. So at this point, we think it's prudent just to call what we now see is that more typical down the road flu season.

Operator

Our next question will come from Jack Meehan with Research.

Jack Meehan

Julie, I wanted to pull you a little bit more on your views on AI. I appreciate all the emphasis that got in your opening remarks. Just would love to hear from you now that you're in the CEO seat, just how you think about the implications for Danaher? Any updates you can share around how you're deploying it with DBS?

Julie Montgomery

Sure. Yes. So thanks for the question. We see AI-driven Doug discovery as a significant long-term opportunity for us. And in my view, it will clearly make the world a healthier place, which is incredibly exciting. And we believe that Danaher is uniquely positioned to help shape this market, frankly, because we have all of the building blocks.

Our breadth, as Danaher has always been a competitive advantage for us. But even more so, I believe that will be the case in the age of AI. So we have all five pieces of the equation needed. We have the instruments, think about molecular devices, SCIEX, Leica Micro. We have the consumables, IDT, Abcam. We have the automation, Beck LS, our Automata partnership. We have the software and gene data and IDBS. And lastly, we have the scale that makes us a priority for the Frontier Labs.

So while it's not material today, we have started to see a modest benefit to our orders and revenue. And frankly, it's at the forefront of every customer conversation I have in Life Science. And it's our ambition to be a leading partner as our customers adopt AI. And we believe the full power of our platform positions us exceptionally well to use AI to help accelerate scientific discovery. And of course, we're also using it internally. I think that DBS and AI have a really natural synergy. As a company culturally, we excel at thinking about processes and identifying the critical path in that process. And that enables us to focus AI on where it's going to create the most value for us. And then we have the ability to follow that up with strong KPIs and daily management. I think that's going to be a really powerful combination as we roll out AI here.

Jack Meehan

Excellent. And then maybe just it would be great to double-click a little bit from the announcements that have come out related to AI, whether it's with NVIDIA or the autonomous lab Abcam. Just like what's the bigger strategy here? Is there a potential to broaden some of these things across the organization?

Julie Montgomery

Sure. Yes, we were very excited to announce our plans for our first AI-powered autonomous lab and that brings together AI, robotics and technologies from across Danaher into an integrated continuous learning workflow. So the simplest way to think about this is that we are working to connect AI to the physical experiment. Lots of organizations can ask AI what their next experiment should be. I still remember the first time I saw that work, it was amazing, but we can do more. Our autonomous lab has AI designed the experiment. And then our technology makes the reagents and test those reagents and then the results be the next experiment. So this creates a full design, make, test closed loop, which is leading to 8x faster discovery of reagents in a 10x productivity enhancement.

And the autonomous lab, that's something that we are starting here within Danaher. We've gotten a lot of customer interest in it and customers even going to see that at work at our Abcam facility. So we want to demonstrate that we can do it in Danaher and then work with our customers.

The NVIDIA collaboration is also something we recently announced. And there, we're collaborating with NVIDIA to help accelerate the adoption of AI and scientific research and drug discovery. And the goal is to combine our instruments, automation and software with NVIDIA's AI and advanced computing technologies. So this means more intelligent instruments in automated lab workflows via edge computing, and it means exploring AI models and digital twins to simulate and optimize experiments before running them. So a lot of work underway here with NVIDIA, and we're excited to build on the collaboration over time.

And frankly, we're also working with Entropic, and you probably saw some of the model hardware standards that were part of their research preview program. And this is about making our instruments easier to connect to other agents and other instruments. So we think that's an important part of utilizing the value of our breadth.

Operator

Our next question will come from Scott Davis with Melius Research.

Scott Davis

Julie, I wanted to dig into this commercial execution just a little bit because you're -- it sounds easy, and I'm sure it's incredibly difficult. So -- what do you -- what's the first step? Do you have to change compensation schemes? Do you have to change out people? I mean what -- how do you really drive? i mean, I'm sure Rainer cared about commercial execution. So how do you really drive change at the pace that you want to drive? Do you have to change, I think, some processes and structure around that to get there?

Julie Montgomery

Yes. Thanks for the thoughtful question. There's a couple of steps here. One, in terms of commercial execution, I am a fanatic on what we referred to at Danaher as the commercial standard condition. And this is really taking DBS down to a very simple place and being extremely clear about what we expect from our sales teams. And we've really doubled down on that in Diagnostics. And the other platforms have taken that as some inspiration and have been holding workshops to make sure that we are doing the same. And one of the things that's interesting is we're even experimenting with how AI can make how we coach and inspect our sales results even simpler, which I think is a really exciting opportunity for us.

And then when it comes to this more connected selling process, it's both easy and difficult. And I think that it's easy when you kind of get the incentives right and you touched on that. When we first started doing this in Diagnostics, one of our rules is when we have a solutions group team go out and talk to customers, no one's incentives are ever hurt. And frankly, the opportunity is clear enough here that I'm happy to double pay on incentives because as you're using the power of Danaher to increase our share of wallet with customers, there's significant win-win opportunities there to go after. Thanks for the question.

Scott Davis

No, thanks for the answer and high integrity of that answer. But I'm going to ask the same exact question around M&A because clearly, there's -- Danaher's 50-year history, there's a long history of very successful M&A, and there's been a few stinkers in there, obviously, that have impacted your portfolio of late. But how do you change? I mean what -- do you feel the need to change the process? And again, I was asking kind of the same way, process over the people, do you change kind of how you work the funnel? I mean, how do you drive to that lower risk, higher consistency, higher return kind of mandate and still put capital to work because I think other companies go through the stages and they kind of freeze. They become afraid to do deals because they're afraid to make a mistake. So how do you keep that flywheel moving so that you're putting capital to work, but increase your hit rate from here?

Julie Montgomery

Yes. No, thank you for the question. We certainly don't want to freeze capital allocation remains a priority for us. And frankly, we have great processes and great teams for M&A. So you mentioned some that hasn't performed as well in the recent past. And I think as a company, we have learned from that. But our focus is really just ensuring that we're doing strategically compounding M&A with a robust return profile. And if you look at our recent deals, obviously, it's early days. But I think that they will be strong returns for us and strategically compounding.

Operator

Our next question will come from Casey Woodring with JPMorgan.

Casey Woodring

Julie, looking forward to working with you. Maybe a follow-up to an earlier question, but just on Masimo, you talked a little bit about how you view the business fitting into Danaher, and you obviously led that deal as head of Diagnostics. But maybe can you just walk through the current trends you're seeing in that business and how we should think about Masimo contribution next year?

Julie Montgomery

Yes. Thank you for the question. Masimo is off to a great start. They delivered high single digits here in Q3, the first full quarter as part of Danaher and year-to-date as well. And I was just with the team last week, the integration is progressing extremely well. They've already completed in our sustainment for over 10 Kaizens with more planned along the way. And frankly, it's just tremendously rewarding to work with that team and see them get excited about DBS, how the lean thinking can support a better cost position, better on-time delivery for the customers. And then also, we have a healthy funnel of the commercial synergies that we were anticipating.

And in true Danaher fashion, we will also learn from Masimo. We're extremely impressed by their rate of innovation and some of their commercial techniques as well. And that's always been part of what makes Danaher stronger.

Casey Woodring

Understood. That's helpful. And then maybe as a follow-up, you called out mid-teens order growth in bioprocessing. If you could maybe just double-click on the equipment piece of that order growth maybe parse out how much pent-up demand you're seeing over the last several quarters. And then I would also be curious to hear on reshoring as well, kind of what you're seeing from an order perspective there and how reshoring could potentially contribute to growth in '27?

Matthew Gugino

Sure, Casey, I'll take the order growth part of the question and then kick it over to Julie for reshoring. So another quarter of mid-teens order growth overall in bioprocessing that was led by upstream consumables as well as resins, encouraged by those trends continue to build backlog here. And although when you think about equipment versus consumable orders year-to-date, both up nicely with those equipment orders continuing in that strong double-digit range. So really supportive of those improving on end market and underlying trends of the business.

Julie Montgomery

Yes. And Casey, on reshoring, I mean, reshoring is playing out largely as we expected. We're seeing some brownfield activity today, and that has a modest impact to our order book at the moment. Those larger greenfield projects are still in the planning phases. The funnel including activity is beginning to pick up, but we see that as more of a 2028-plus event in terms of when it starts to hit the P&L. We think -- we do think this is a strong opportunity ultimately for the business. And it could be a $1 billion market opportunity in the U.S. But as I said, we'll expect it to play out across several years, mostly starting in 2028.

Operator

Our last question will come from Evie Koslosky with Goldman Sachs.

Elizabeth Koslosky

Julie, congrats on the new role. So within Life Sciences, maybe walk through the key end markets of where we are in the recovery within academic? And then biotech specifically with an emerging biotech and then also within industrial and semis? And then are you hearing from customers in terms of where they are with spending versus kind of where we still have room in the recovery? And any areas that investors should look for potential acceleration and leverage for upside into next year?

Julie Montgomery

Great. Thank you, Evie, for the question. So you saw here in Q3, we grew 4.5%, and finished above our expectations driven by the improving end markets and the traction of some recent commercial initiatives as well as some new product launches. And frankly, this is the third quarter in a row where Life Sciences has beat our internal expectations.

The end markets continue to steadily improve. Large pharma and biopharma remained robust. Biotech funding is reading through academic demand still below historic levels, but improved modestly sequentially. And we saw continued strength in clinical and applied markets, including in MicroE at Pall. And our customers, they are really interested, and we're starting to see some of that early demand for the AI-driven workflow solutions. And that's first starting to show up in automation, Beckman Life Sciences. And as I mentioned, I think we're very well positioned here in AI. Customers like the breadth of our portfolio. and we will turn that into a value proposition for them that's around ease of integration through common standards across the instruments.

Operator

We've now reached our allotted time for questions. And I'd like to turn the call back over to Rachel for any additional or closing remarks.

Rachel Vatnsdal Olson

Perfect. Thank you, operator. Thank you, everyone, for joining us today this morning. We'll be around the rest of the day and the week for follow-ups if any of you have questions. Thank you.

Operator

Thank you, ladies and gentlemen. This brings us to the end of today's meeting. We appreciate your time and participation, and you may now disconnect.

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