NEW YORK – Thermo Fisher Scientific executives said on Thursday that they see market conditions improving and driving organic revenue growth in 2025 after a relatively flat 2024.
"We are excited for this year," Thermo Fisher Chairman, President, and CEO Marc Casper told investors during a call recapping the company's Q4 financial results. "The quarter after quarter of better market conditions will set us up for an incredible future."
During the call, Thermo Fisher CFO and Senior VP Stephen Williamson initiated a revenue guidance range of $43.5 billion to $44.0 billion, which would represent about 2 percent year-over-year growth compared to $42.88 billion in total revenues for 2024. This guidance assumes 3 percent to 4 percent of organic revenue growth, offset by 1 percent of negative impact from the remaining runoff of pandemic-related revenues and a 1.5 percent revenue decrease from foreign currency exchange, Williamson said.
The firm also provided an adjusted earnings per share guidance range of $23.10 to $23.50, which represents 6 percent to 8 percent year-over-year adjusted EPS growth.
"When I think about 2025, what we're assuming in the guidance is that the market conditions will continue to strengthen as the year progresses," Casper said. "Our focus, especially given that there is always some level of uncertainty or volatility, is to really deliver outstanding EPS growth this year."
For the three months ended Dec. 31, 2024, Thermo Fisher booked $11.40 billion in revenues, up 5 percent from $10.89 billion in Q4 2023 and beating analysts' average estimate of $11.28 billion.
Of the total revenue growth, organic revenues contributed 4 percent while acquisitions contributed 1 percent, offset by "a slight" impact from foreign exchange, Williamson said. Core organic revenues also increased by 5 percent during the quarter, he said.
By market segment, Thermo Fisher's life sciences solutions revenues grew 5 percent, or 3 percent organically, in Q4, leading to $2.60 billion from $2.47 billion a year ago. Growth in this segment was driven by the company's bioproduction and bioscience businesses, Williamson said.
Analytical instruments revenues increased 7 percent, or 8 percent organically, to $2.19 billion from $2.04 billion. Growth for the segment was largely led by electron microscopy, chromatography, and mass spectrometry businesses.
Specialty diagnostics revenues grew 5 percent to $1.16 billion from $1.11 billion. Organic revenue also grew 5 percent in Q4, led by the company's transplant diagnostics and immuno-diagnostics businesses as well as the healthcare market channel.
Lastly, laboratory products and biopharma services revenues were up 4 percent to $5.94 billion from $5.72 billion a year ago. Organic growth for the segment was also 4 percent versus the prior year, led by Thermo Fisher's pharma services business as well as the research and safety market channel, offset by the runoff of vaccines and therapies revenues.
Net income in Q4 totaled $1.83 billion, or $4.78 per share, compared to net income of $1.63 billion, or $4.20 per share, for the year-ago quarter. Adjusted EPS for the quarter was $6.10, beating analysts' consensus estimate of $5.94.
The company's Q4 R&D costs grew 14 percent to $374.0 million from $327.0 million a year ago while its SG&A costs grew 10 percent to $1.85 billion from $1.67 billion.
For full-year 2023, Thermo Fisher reported $42.88 billion in revenues, essentially flat compared to $42.86 billion in 2023. Full-year revenues were in line with the company's guidance and in line with analysts' consensus estimate of $42.8 billion. Organic and core organic revenues for full-year 2024 were flat year over year.
In 2024, Thermo Fisher delivered $520 million of pandemic-related revenues, including approximately $100.0 million from testing and $420.0 million from vaccines and therapies, Williamson said.
Looking at business segments, full-year life sciences solutions revenues declined 4 percent year over year to $9.63 billion from $9.98 billion. Organic revenues in the segment dropped by 3 percent.
Both reported and organic revenues for analytical instruments rose 3 percent to $7.46 billion from $7.26 billion. Specialty diagnostics revenues increased 2 percent, or 3 percent organically, to $4.51 billion from $4.41 billion. Laboratory products and biopharma services revenues were flat at $23.2 billion compared to $23.0 billion in the prior year.
By regions in 2024, revenues in North America declined in the low-single digits, revenues in Europe were flat year over year, and revenues in Asia-Pacific, including China, grew in the low-single digits, Williamson said.
"We had a very strong year [in China] in a very, very challenged environment," Casper told investors. "It's nice to see revenue — it wasn't huge, but it was nice to see revenue flow into the instruments business."
Looking ahead, Casper said the company is "not assuming any recovery from an economic perspective" in China at this point. "We don't see any evidence yet of a real strengthening environment other than the stimulus program," he noted. "So, we just assume that the conditions will continue to be somewhat muted and similar to last year."
Full-year R&D costs increased 4 percent year over year to $1.39 billion from $1.34 billion the year before while SG&A expenses were up 7 percent to $7.00 billion from $6.57 billion.
Net income for 2024 grew to $6.34 billion, or $16.53 per share, from $6.00 billion, or $15.45 per share in 2023. Adjusted EPS was $21.86, in line with the company's guidance and surpassing analysts' average estimate of $21.69.
Thermo Fisher finished 2024 with $4.01 billion in cash and cash equivalents and $1.56 billion in short-term investments.
Regarding its full-year 2025 guidance, the company expects market growth to be "better" than 2024, "improving as the year progresses," Williamson told investors. To that end, he noted that the company assumes organic growth as well as adjusted EPS growth will remain flat in Q1, since the quarter has two fewer selling days compared to last year and the services revenue will be less given the seasonality.
When asked during the call about the uncertainty of the federal funding environment and foreign policies with the new Trump administration, Casper said, "there isn't any real insight into what's going on" at this point, but the company's long-time philosophy for unanticipated changes is "just manage through it."
Additionally, with the new administration, Casper said he is "very excited" about the business environment in the US, which he anticipates being "much more business-friendly, with much more of a focus on economic growth."
"Our job is to work collaboratively with the administration, and we certainly had a good working relationship with the president's first administration," Casper said.
In afternoon trading on the New York Stock Exchange, Thermo Fisher’s shares were up more than 6 percent at $606.42.