NEW YORK — Bruker said Wednesday that the combination of tariffs and cuts to US academic and government spending will have a negative gross impact to its full-year 2025 revenues of roughly $100 million and its operating profit of about $90 million.
During a conference call following the release of the company's Q1 2025 financial results, President, Chairman, and CEO Frank Laukien said Bruker is working to mitigate the impact of these disruptions through new pricing, cost cutting, and a revamp of its supply chain and manufacturing.
Laukien said that US science funding cuts are "by far the strongest revenue headwind" for the company this year, noting that Bruker expects its 2025 US academic and government revenue, which accounted for 10 percent of revenues last year, to be down 20 percent to 25 percent year over year.
Last week, the Trump administration released a budget proposal calling for a nearly 40 percent cut in funding for the National Institutes of Health in fiscal year 2026. Laukien said that while Bruker expects NIH funding will see cuts, they will likely not be as deep as those proposed in the president's budget.
While the company is seeing "lots of uncertainty and delays" in US academic and government orders, it has not yet seen any order cancellations, he added.
Bruker is also seeing a slowdown in academic and government spending in China, which Laukien said was likely due to the ongoing trade war between China and the US, in which China has placed a 125 percent tariff on goods imported from the US.
Release of Chinese stimulus funding has slowed, he said, impacting "shovel-ready projects, a lot of them with our instrumentation."
Bruker recognized less than $10 million in Chinese stimulus-related revenue in Q1, Laukien said, adding that he does not expect stimulus funding to be a significant source of sales for the company in 2025.
"I think most of the provinces are hanging onto the money," he said. "It's been deferred as China is trying to figure out what is going on with tariffs and the trade war."
Laukien said that the US tariffs on China will have a "negligible" impact on the company's business as it by and large does not import products from China. However, the 10 percent baseline tariff that the US has implemented globally will impact Bruker's imports from the EU, Switzerland, Israel, and Malaysia, creating a roughly $40 million anticipated reduction to its operating profit in 2025.
Laukien said pricing and cost-cutting measures, along with changes to Bruker's manufacturing and supply chain, will allow it to mitigate roughly half of the anticipated $90 million cuts to its operating profit in 2025, adding that the company should be able to fully offset this headwind in 2026.
"We're a very international company with a lot of flexibility, but it takes a little bit of time," he said.
For Q1 2025, Bruker reported that its revenues climbed 11 percent to $801.4 million from $721.7 million the year before, coming in above the consensus Wall Street estimate of $772.5 million.
Organic revenue growth was 3 percent as acquisitions contributed 10 percent to revenues, and currency exchange reduced revenues by roughly 2 percent.
Bruker's CALID unit, which includes its life sciences and mass spectrometry businesses, posted a 23 percent jump in revenues for the quarter to $280.1 million from $227.9 million a year earlier. The rise was driven by strong sales in its microbiology segment and its TimsTOF mass spectrometry business.
Bruker BioSpin revenues were up 14 percent in the first quarter to $207.8 million from $182.8 million in Q1 2024, while Bruker Nano's revenues rose 7 percent to $256.6 million from $240.4 million. Bruker Energy & Supercon Technologies (BEST) revenues fell 19 percent to $59.3 million from $73.1 million.
The firm's first quarter net profit was $17.4 million, or $.11 per share, compared with a year-ago net profit of $50.9 million, or $.35 per share. It attributed the drop to "expected margin headwinds" from acquisitions made in Q2 2024.
Non-GAAP earnings per share in Q1 2024 were $.47, topping the consensus Wall Street estimate of $.44 per share.
The Billerica, Massachusetts-based company's R&D costs in the quarter increased 19 percent to $97.1 million from $81.8 million, while SG&A spending rose 15 percent to $225.4 million from $195.3 million.
Bruker ended the quarter with cash, cash equivalents, and restricted cash of $187.7 million.
Bruker raised its revenue guidance for full-year 2025 to between $3.48 billion and $3.55 billion, implying 3.5 percent to 5.5 percent year-over-year revenue growth. It previously projected full-year 2025 revenue of between $3.47 billion and $3.54 billion.
The company now expects non-GAAP 2025 earnings per share between $2.40 and $2.48, down from its previous guidance of $2.67 to $2.72.
During the call, Bruker Executive VP and CFO Gerald Herman said the company expects organic revenue to decline year over year by low single digits in Q2 2025 and reported revenue to rise by low single digits. The company also expects a year-over-year decline in non-GAAP EPS in Q2.
During early morning trading on the Nasdaq, shares of Bruker were down 2 percent to $38.78.