BRUKER CORP

Previous wording

The following discussion of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and the notes to those statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q, and in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

The following discussion of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and the notes to those statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q, and in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024. The dollar amounts listed in the tables presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations are in millions of U.S. Dollars.

Previous wording

the impact of changes to tax and accounting rules and changes in law;

Current wording

the impact of changes to tax and accounting rules, and changes in law, including the One Big Beautiful Bill Act (the “Act”);

Previous wording

general economic conditions, including inflation, uncertainties caused by recent banking industry volatility, the threat of recession, financial liquidity, currency volatility or devaluation, supply chain or manufacturing capabilities, and uncertain economic conditions in the United States and abroad, and additional tariffs, including those imposed or that may be imposed by the new presidential administration in the U.S.;

Current wording

general economic conditions, including inflation, the threat of recession, financial liquidity, currency volatility or devaluation, supply chain or manufacturing capabilities, uncertain economic conditions in the United States and abroad, and additional tariffs, including those imposed or that may be imposed by the presidential administration in the U.S;

Previous wording

potential energy shortages in Europe where the Company has significant operations and overall higher energy and transportation costs;

Current wording

potential energy shortages in Europe where the Company has significant operations;

Previous wording

The following table presents a summary of our consolidated results as of the three months ended March 31, 2025 and 2024 (dollars in millions):

Current wording

The following table presents a summary of our consolidated results as of the three and six months ended June 30, 2025 and 2024:

Previous wording

Although our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue excluding the effects of foreign currency, and expenses excluding costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology transition initiatives, and other costs (“non-GAAP adjustments”), provides meaningful supplemental information regarding our performance but should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. We rely internally on certain measures that are not calculated according to GAAP. These measures include constant exchange rate (“CER”) currency revenue growth, organic revenue growth, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating margin, and free cash flow.

Current wording

Although our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue excluding the effects of foreign currency, and expenses excluding costs related to restructuring actions, acquisitions, and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology, transition initiatives, and other costs (“non-GAAP adjustments”), provides meaningful supplemental information regarding our performance but should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. We rely internally on certain measures that are not calculated according to GAAP. These measures include constant exchange rate (“CER”) currency revenue growth, organic revenue growth, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating margin, and free cash flow.

Previous wording

The following table presents our results for the periods presented (dollars in millions):

Current wording

The following table presents our results for the periods reported:

Previous wording

The following table presents revenue, change in revenue, and revenue growth by reportable segment for the periods presented (dollars in millions):

Current wording

The following table presents revenue, change in revenue, and revenue growth by reportable segment for the periods reported:

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The following table presents gross profit and gross profit margins by reportable segment for the three months ended March 31, 2025 and 2024 (dollars in millions):

Current wording

The following table presents gross profit and gross profit margins by reportable segment for the periods reported:

Previous wording

Our selling, general and administrative expenses for the three months ended March 31, 2025, increased to 28.1% of total revenue, from 27.1% of total revenue for the comparable period in 2024. The increase as a percentage of revenue was a result of increased spending related to additional headcount and personnel expenses from our 2024 acquisitions.

Current wording

Our selling, general and administrative expenses for the three months ended June 30, 2025, increased to 29.0% of total revenue, from 27.6% of total revenue for the comparable period in 2024. The increase as a percentage of revenue was a result of increased spending related to the impact from acquisitions that occurred early in the second quarter of 2024.

Previous wording

The following table presents operating income and operating margins on revenue by reportable segment for the periods presented (dollars in millions):

Current wording

The following table presents operating income and operating margins on revenue by reportable segment for the periods reported:

Previous wording

The increase in interest and other income (expense), net in the three months ended March 31, 2025, as compared to the same period in 2024 was primarily due to higher interest expense of $13.1 million due to increased borrowings.

Current wording

The increase in interest and other income (expense), net in the three months ended June 30, 2025, as compared to the same period in 2024 was primarily due to lower foreign exchange differences on the revaluation of monetary items and the inclusion of a significant impairment of minority investments in the comparative prior period.

Previous wording

The Organization for Economic Co-operation and Development introduced its Pillar Two Framework Model Rules (“Pillar 2”), which provides guidance for a global minimum tax. Various countries have either enacted or are in the process of enacting legislation to implement this framework. Our income tax provision for the three months ended March 31, 2025, reflects currently enacted legislation and guidance related to the model rules. This enacted legislation and guidance had an impact on our income tax provision, resulting in an increase to the Company’s effective tax rate of 2.1% for the three months ended March 31, 2025. The Company continues to monitor the countries in which it operates as they enact legislation implementing Pillar 2.

Current wording

The OECD introduced its Pillar 2, which provides guidance for a global minimum tax. Various countries have either enacted or are in the process of enacting legislation to implement this framework. Our income tax provision for the three months ended June 30, 2025, reflects currently enacted legislation and guidance related to the model rules. This enacted legislation and guidance had an impact on our income tax provision, resulting in an increase to our adjusted effective tax rate of 2.3% for the three months ended June 30, 2025. We continue to monitor the countries in which it operates as they enact legislation implementing Pillar 2.

Previous wording

Geographically in the three months ended March 31, 2025, our North American revenue grew 10.0%, compared to the year ago quarter, primarily from the ELITechGroup and NanoString acquisitions that occurred in the second quarter of 2024. In addition, Asia Pacific revenue increased by 4.4%, and European revenue increased by 16.5% compared to the same period in 2024, which were also driven primarily by 2024 acquisitions.

Current wording

Geographically in the six months ended June 30, 2025, our North American revenue decreased 0.3%, Asia Pacific revenue increased by 5.7%, and European revenue increased by 7.1% driven by driven by tailwinds from acquisitions compared to the same period in 2024.

Previous wording

The increase in gross profit and slight decrease in gross profit margin, compared to the prior year quarter, were both driven primarily by the impact of the ELITechGroup and NanoString acquisitions that occurred in 2024.

Current wording

The slight increase in gross profit compared to the prior year was driven primarily by the impact of the ELITechGroup and NanoString acquisitions that occurred in 2024 offset by associated business combination amortization expenses, combined with increased cost of goods sold due to higher U.S. tariffs and foreign exchange headwinds from a declining U.S. dollar.

Previous wording

Our research and development expenses for the three months ended March 31, 2025, increased to 12.1% of total revenue from 11.3% of total revenue for the comparable period in 2024. The increase as a percentage of revenue is a result of our increased investment in research and development capabilities, and the mix of research and developments costs from 2024 acquisitions.

Current wording

Our research and development expenses for the six months ended June 30, 2025, increased to 12.3% of total revenue from 11.4% of total revenue for the comparable period in 2024. The increase as a percentage of revenue is a result of our increased research and development related costs from prior year acquisitions.

Previous wording

Other charges, net for the three months ended March 31, 2025, increased to $36.9 million compared to $10.9 million for the comparable period in 2024. The year over year increase was primarily due to $18.6 million of acquisition-related litigation charges that primarily relate to the acquisitions of BCA and NanoString, $7.6 million of restructuring charges related primarily to restructuring programs as described in Note 10, Restructuring and asset impairments, as well as an increase of $2.1 million in acquisition-related expenses due to costs from 2024 acquisitions. Please refer to Note 9, Other Charges, netfor more details on our other charges, net costs.

Current wording

Other charges, net for the six months ended June 30, 2025, increased to $51.3 million compared to $33.9 million for the comparable period in 2024. The year over year increase was primarily due to $22.6 million of acquisition-related litigation charges that primarily relate to the acquisitions of BCA and NanoString, $10.5 million of restructuring charges related primarily to restructuring programs as described in Note 10, Restructuring, offset by a decrease of $12.6 million in acquisition-related expenses due to fewer acquisitions closed in the current year compared to 2024. Refer to Note 9, Other Charges, netfor more details on our other charges, net costs. In addition, in the second quarter of 2025, the Company initiated a corporate-wide restructuring program to be implemented across multiple functions and geographies to address challenges in the current business environment. We anticipate additional restructuring charges in the third and fourth quarter of 2025 with activities under these plans expected to be completed by 2026.

Previous wording

The effective tax rates for the three months ended March 31, 2025, and 2024 were 34.7% and 27.7%, respectively. The increase in the Company's effective tax rate was primarily due to changes in jurisdictional mix and net unfavorable discrete activities.

Current wording

The effective tax rates for the six months ended June 30, 2025, and 2024 were 21.9% and 37.6%, respectively. The decrease in the Company's effective tax rate was primarily due to a change in jurisdictional mix, and net favorable discrete activities.

Previous wording

We anticipate that our existing cash and credit facilities will be sufficient to support our operating and investing needs for at least the next twelve months. Our future cash requirements could be affected by acquisitions that we may complete, purchases of our common stock or the payment of dividends in the future. Historically, we have used the liquidity generated from cash flow from operations, debt financings and issuances of common stock to finance our growth and operating needs. In the future, there are no assurances that we will continue to generate cash flow from operations or that additional financing alternatives will be available to us, if required, or, if available, will be obtained on terms favorable to us.

Current wording

We anticipate that our existing cash and credit facilities will be sufficient to support our operating and investing needs for at least the next twelve months. Our future cash requirements could be affected by acquisitions that we may complete, purchases of our common stock, or the payment of dividends in the future. Historically, we have used the liquidity generated from cash flow from operations, debt financings, and issuances of common stock to finance our growth and operating needs. In the future, there are no assurances that we will continue to generate cash flow from operations, that additional financing alternatives will be available to us, if required, or, if available, will be obtained on terms favorable to us.

Previous wording

The following table presents our cash flows from operating activities, investing activities and financing activities for the periods presented (in millions):

Current wording

The following table presents our cash flows from operating activities, investing activities, and financing activities for the periods reported:

Previous wording

Net cash provided by operating activities during the three months ended March 31, 2025, resulted primarily from consolidated net income adjusted for non-cash items of $55.7 million, and a change in operating assets and liabilities, net of acquisitions of $9.3 million. Net cash provided by operating activities during the three months ended March 31, 2024, resulted primarily from net income adjusted for non-cash items of $85.2 million, partially offset by a change in operating assets and liabilities, net of acquisitions and divestitures of $63.4 million.

Current wording

Net cash used in operating activities during the six months ended June 30, 2025, resulted primarily from a change in operating assets and liabilities, net of acquisitions of $151.0 million, offset by consolidated net income adjusted for non-cash items of $88.5 million. Net cash provided by operating activities during the six months ended June 30, 2024, resulted primarily from consolidated net income adjusted for non-cash items of $144.7 million, partially offset by a change in operating assets and liabilities, net of acquisitions and divestitures of $121.8 million.

Previous wording

The decrease in consolidated net income adjusted for non-cash items was primarily due to lower income as result of unfavorable margin mix and increased costs related to 2024 acquisitions.

Current wording

The decrease in consolidated net income adjusted for non-cash items was primarily due to lower income as result of increased costs related to recent acquisitions combined with negative impact of new global trade tariffs. The change in operating assets and liabilities, net of acquisitions increased primarily due to timing of income taxes payable offset by increased collections of receivables.

Previous wording

Net cash used in investing activities during the three months ended March 31, 2025, resulted primarily from purchases of property, plant and equipment of $26.0 million. Net cash used in investing activities during the three months ended March 31, 2024, resulted primarily from acquisitions of $274.5 million, purchases of property, plant and equipment of $21.4 million, and minority investments of $10.0 million.

Current wording

Net cash used in investing activities during the six months ended June 30, 2025, resulted primarily from cash paid for acquisitions of $69.5 million, purchases of property, plant and equipment of $47.3 million, and minority investments of $3.2 million. Net cash used in investing activities during the six months ended June 30, 2024, resulted primarily from cash paid for acquisitions of $1,576.5 million, purchases of property, plant and equipment of $46.0 million, and minority investments of $10.0 million, offset by $2.5 million of proceeds from cross-currency swap agreements.

Previous wording

Net cash used in financing activities during the three months ended March 31, 2025, was primarily from net repayments of our revolving line of credit of $28.0 million, repayments of long-term debt of $7.7 million, and cash paid for purchases of common stock under our repurchase program of $10.0 million, offset by proceeds from long-term debt of $2.9 million. Net cash provided by financing activities during the three months ended March 31, 2024, was primarily from cash received from the revolving line of credit of $268.9 million, offset by cash paid for repayment of the 2012 Note Purchase Agreement of $100.0 million, repayment of long term debt of $3.4 million, and dividend payments of $7.3 million.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2025, was primarily from net proceeds of our revolving line of credit of $89.1 million, proceeds from long-term debt of $2.9 million, offset by repayments of long-term debt of $22.3 million, the payment of dividends to common shareholders of $15.3 million, and cash paid for purchases of common stock under our repurchase program of $10.0 million. Net cash provided by financing activities during the six months ended June 30, 2024, was primarily from net proceeds from our revolving line of credit of $233.2 million, proceeds from long-term debt of $805.7 million, proceeds from our public offering of common stock $402.9 million, offset by the repayment of our 2012 Note Purchase Agreement of $100.0 million, and the payment of dividends to common shareholders of $15.0 million.

Previous wording

During the three months ended March 31, 2025, the Company purchased a total of 200,731 shares at an aggregate cost of $10.0 million under the 2023 Repurchase Program. During the three months ended March 31, 2024, the Company did not purchase any shares under the 2023 Repurchase Program. Refer to Note 21, Shareholder's Equity, in the Notes to our Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for more information on our share repurchase program.

Current wording

Refer to Note 21, Shareholder's Equity, in the Notes to our Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for more information on our share repurchase program.

Previous wording

As of March 31, 2025, we have total outstanding debt of $2.1 billion and a revolving credit facility that provides for up to $900.0 million of backup liquidity to finance working capital needs, refinance or reduce existing indebtedness, and for general corporate use. In addition, the facility provides for an uncommitted incremental facility whereby, under certain circumstances, we may, at our option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $400 million. As of March 31, 2025, we were in compliance with all covenants of our debt agreements.

Current wording

As of June 30, 2025, we have total outstanding debt of $2.4 billion and a revolving credit facility that provides for up to $900.0 million of backup liquidity to finance working capital needs, refinance or reduce existing indebtedness, and for general corporate use. In addition, the facility provides for an uncommitted incremental facility whereby, under certain circumstances, we may, at our option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $400 million. As of June 30, 2025, we were in compliance with all covenants of our debt agreements.

Previous wording

For a summary of the fair and carrying values of our outstanding debt as of March 31, 2025, and December 31, 2024, refer to Note 15, Debt and Note 16, Fair Value of Financial Instruments to our unaudited condensed consolidated financial statements included in this report. For additional information on our outstanding debt and credit facility refer to Note 21 Debt, to our unaudited condensed consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

For a summary of the fair and carrying values of our outstanding debt as of June 30, 2025, and December 31, 2024, refer to Note 15, Debt and Note 16, Fair Value of Financial Instruments to our unaudited condensed consolidated financial statements included in this report. For additional information on our outstanding debt and credit facility refer to, Note 21, Debt, to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.