This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

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The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are computers, internet services, IT services, semiconductors, and software companies.

Fortune Sector Leaders: Technology

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

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The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

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F500-2023-097-Thermo Fisher Scientific

The biotech firm, known for its COVID-19 test, continued to rake in revenue for the device, making more than $3 billion off COVID-testing alone in 2022. Total revenue shot up 14.5%, nearing $45 billion. 
<ul> 
 	<li>Thermo Fisher kicked off 2023 with its acquisition of diagnostics company The Binding Site in an all-cash transaction of $2.8 billion.</li> 
 	<li>In December 2022, the U.S. Food and Drug Administration granted emergency use authorization for Thermo Fisher’s test to detect monkeypox.</li> 
 	<li>As competitors like Novartis and Biogen announced plans to cut back on R&amp;D projects in early 2023, Thermo Fisher showed signs of continued innovation. New product releases include an instrument to analyze trace elements like toxins in food and beverages as well as an automated digital tool to increase productivity in molecular research.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500-2022-092-Thermo Fisher Scientific

A leading provider of life-science-related equipment and services to pharmaceutical, biotech, and government entities, Thermo Fisher Scientific rode a wave of demand in the second year of the pandemic: Among other things, companies making COVID vaccines and treatments continue to rely on its lab equipment. Revenue and profits each grew more than 20% in 2021.

This year’s group delivered stellar revenue and profit growth, but it underperformed the broader stock market.

100 Fastest-Growing Companies

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Thermo Fisher Scientific, which sells equipment, software, and services for scientific research, had a stellar 2020, lifted by huge demand for its products, such as PCR tests, during the pandemic. The lab supplier collected $6.6 billion in revenue during the year from sales of instruments and other products to more than 200 customers trying to develop COVID-19 vaccines and treatments. Overall revenue rose 26% to $32 billion, compared with the prior year, while profits soared 73% to $6.4 billion. Even with the COVID vaccine rush behind them, the company is thinking big with its $17.4 billion acquisition of contract research business PPD, which it announced in April.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:12}">Thermo Fisher Scientific, which sells equipment, software, and services for scientific research, had a stellar 2020, lifted by huge demand for its products, such as PCR tests, during the pandemic. The lab supplier collected $6.6 billion in revenue during the year from sales of instruments and other products to more than 200 customers trying to develop COVID-19 vaccines and treatments. Overall revenue rose 26% to $32 billion, compared with the prior year, while profits soared 73% to $6.4 billion. Even with the COVID vaccine rush behind them, the company is thinking big with its $17.4 billion acquisition of contract research business PPD, which it announced in April.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-95-Thermo-Fisher-Scientific-DR2A0394

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-498-Thermo-Fisher-Scientific

This manufacturer of analytical instruments, equipment, software, and services for scientific researchers has more than 75,000 employees around the world.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-119-Thermo-Fisher-Scientific

This manufacturer of analytical instruments, equipment, software, and services for the scientific research industry has more than 75,000 employees around the world.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Fastest-growing Companies

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Thermo Fisher Scientific is a global provider of life sciences solutions, analytical instruments, specialty diagnostics, laboratory products, and biopharma services. Founded in 1956, the company has a strong presence in North America, Europe, and the Asia-Pacific region. The company’s operations are structured into four main sections: life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services.

Q3 2026

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Thermo Fisher Scientific (TMO): Company Profile, Stock Price, News, Rankings

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Thermo Fisher Scientific

thermo fisher scientific

Good morning, ladies and gentlemen, and welcome to the Thermo Fisher Scientific 2026 Third Quarter Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I would like to introduce our moderator for the call, Mr. Rafael Tejada, Vice President, Investor Relations. Mr. Tejada, you may begin the call.  

Good morning, and thank you for joining us. On the call with me today is Marc Casper, our Chairman and Chief Executive Officer, and Jim Meyer, Senior Vice President and Chief Financial Officer. Please note this call is being webcast live and will be archived on the investors section of our website, thermofisher.com, under the heading News, Events and Presentations, until the next quarterly earnings call. A copy of the press release of our third quarter earnings is available in the investors section of our website under the heading Financials. Before we begin, let me briefly cover our safe harbor statement. Various remarks that we may make about the company's future expectations, plans and prospects constitute forward-looking statements within the meaning of applicable securities laws.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various risks and uncertainties, including those discussed in the company's most recent reports on Form 10-K and Form 10-Q under the heading Risk Factors. These forward-looking statements are based on our current expectations and speak only as of the date they are made. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even in the event of new information, future developments, or otherwise. Also, during this call, we will be referring to certain financial measures not prepared in accordance with generally accepted accounting principles, or GAAP.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is available in the press release of our third quarter earnings, and also in the investors section of our website under the heading Financials. With that, I'll now turn the call over to Marc.

Thank you, Raf. Good morning, everyone, and thanks for joining us today for our third quarter call. As you saw in our press release, we delivered another excellent quarter with outstanding financial performance. We are advancing our proven growth strategy and continuing to strengthen our trusted partner status with customers. Our PPI Business System is enabling outstanding execution across the company. Looking ahead, we are incredibly well-positioned to deliver an excellent 2026 as we continue to drive long-term value creation for all of our stakeholders and build an even brighter future for our company. To start, let me recap the third quarter financial results. Our revenue grew 9% to $12.14 billion. Adjusted operating income grew 15% to $2.97 billion. Adjusted operating margin expanded by 120 basis points to 24.5%. We grew adjusted EPS by 15% to $6.68 per share.

Turning to our performance by end market, let me provide some details on how the quarter played out. Starting with pharma and biotech, we delivered high single-digit growth during the quarter. Performance was led by our Pharma Services business and our research and safety market channel. We also had strong growth in our clinical research business. In academic and government, revenue was flat during the quarter. We saw good performance in our chromatography and mass spectrometry business. In industrial and applied, we delivered high single-digit growth during the quarter. Performance was led by our electron microscopy business and our research and safety market channel. Finally, in diagnostics and healthcare, we grew low single digits during the quarter with strong growth in our transplant diagnostics business. 

Wrapping up the end markets, the improved end market conditions we saw in Q2 continued in Q3, and our team executed very well to capture the opportunities, allowing us to deliver strong growth. Let me now turn to our growth strategy to share the progress we made during the quarter. As a reminder, our growth strategy consists of three pillars: high-impact innovation, our trusted partner status with customers, and our unparalleled commercial engine. Starting with the first pillar of our growth strategy, it was another outstanding quarter of high-impact innovation for our company. During the quarter, we launched a number of new technologies that strengthen our industry leadership and help our customers gain deeper scientific insights, enhance productivity, and accelerate their innovation. In chromatography and mass spectrometry, we launched the Thermo Scientific Orbitrap Isora mass spectrometer, the first Orbitrap system for isotope ratio analysis.

It makes this sophisticated analysis faster and easier to use, giving more researchers deeper insights into the origin and composition of samples across environmental and life sciences research. This product launch expands the served market for our Orbitrap franchise. In electron microscopy, we introduced the Thermo Scientific EMPAD G2 electron detector. This new technology enables faster and more detailed characterization of advanced materials, helping researchers gain deeper insights in support of the development of next generation semiconductor and memory technologies. In Specialty Diagnostics, we launched the FDA-cleared EliA CTD 13 Screen in the U.S., expanding our autoimmune diagnostics offering. The new test helps laboratories streamline testing for systemic connective tissue diseases, including lupus, helping clinicians guide patient care. In genetic sciences, we introduced the Ion 560 Chip, our highest throughput sequencing chip for the Ion GeneStudio S5 platform.

With nearly twice the sequencing capacity of our previous offering, it enables laboratories to process more samples in each run and meet the growing demand for genomic profiling in oncology research. I also want to give you an update on how we're deploying AI technology to further differentiate our products and service offerings. Let me give you two examples. In electron microscopy, we've embedded AI-enabled software on our Krios 5 and Glacios 3 cryo-electron microscopes. Pharma and biotech customers are using these capabilities to automate workflows and support structure-based drug discovery across small molecules, biologics, and other modalities. The technology helps generate even higher quality data while reducing manual step setup time by approximately 90%. As we've shared before, we're deploying agentic AI into our clinical research business.

The combination of AI with our deep capabilities and extensive data gives us a unique opportunity to improve the speed, quality, and probability of success for clinical trials. As part of our ongoing efforts, we recently launched a new AI-based clinical research assistant. This agent leverages our extensive proprietary clinical and operational data, connecting multiple systems, which enables our team to focus more time on site engagement, risk assessment, and study quality. Another quarter of excellent high impact innovation, further strengthening our industry leadership, advancing our customers' important work, and driving market share gain. Let me now cover the two remaining pillars of our growth strategy. Our industry leading commercial capabilities and trusted partner status enable our customer success. During the quarter, we continued to strengthen our position in both of these areas.

In partnership with Mayo Clinic, we launched Precure, a new initiative that brings together Mayo Clinic's extensive biological samples and clinical insights with our differentiated proteomics capabilities, including our Olink technology and Orbitrap mass spectrometry. Together, these capabilities will help researchers identify the earliest biological signs of disease and provide a foundation of new discoveries in disease biology, diagnostics, and therapeutics. In South Korea, we opened our first AI-Automation Innovation Center, bringing together our advanced analytical technologies with automation and AI. The center provides a collaborative environment where we work side by side with our customers to develop the next generation of scientific workflows that accelerate innovation and enhance R&D productivity. We also continue to invest to better service our customers. In Kentucky, we opened a new highly automated distribution center that strengthens our North American research and safety market and healthcare market channels. 

The new facility expands our capacity, enhances speed, flexibility, and assurance of supply for our customers. Wrapping up on our growth strategy, we made great progress during the quarter. Turning to capital deployment. We continue to successfully execute our disciplined approach to capital deployment, which is a combination of strategic M&A and returning capital to our shareholders. We're very pleased with the progress of our Clario acquisition. The business is performing well. The integration is going smoothly. And we're excited about the momentum building to deliver meaningful revenue synergies from the acquisition. We are connecting these leading capabilities into our broader offering for clinical development. In September, we reached the one-year anniversary of the acquisition of our filtration and separation business. This business is performing very well, and it has strengthened our upstream and downstream bioproduction capabilities and enhanced our ability to serve our pharma and biotech customers.

Finally, during the quarter, we completed the divestiture of the microbiology business. Overall, we are very pleased with the progress we are making as our disciplined capital deployment strategy continues to create value for our customers and shareholders. Let me spend a moment on our PPI Business System, which is a key enabler of our performance. We leveraged PPI to drive strong profitability and free cash flow in the quarter while continuing to improve the customer experience. We are also deploying AI across the company to further strengthen PPI, empowering our colleagues to continuously improve how we work and serve our customers even more effectively. The combination of PPI and AI is strengthening our execution today and creating even greater opportunities to drive productivity and value creation over time. Now I would like to review our updated 2026 guidance at a high level. 

We are raising our guidance for the full year on the top and bottom line, reflecting another quarter of strong operational performance and continued strength in our end markets. We are raising our revenue guidance to a new range of $47.7 billion-$48.2 billion, representing 7%-8% reported revenue growth over 2025. This reflects an increase to our full-year organic revenue growth, which is now 4%. We are also raising our adjusted earnings per share guidance to be in the range of $25.13-$25.43 per share, which now represents 10%-11% growth over 2025. Jim will take you through the details in his remarks. To summarize our key takeaways, we delivered outstanding financial performance in the quarter, with organic revenue growth of 6% and adjusted EPS growth of 15%.

The improved end-market conditions we saw in Q2 continued in the third quarter, with strong customer activity and our team is executing at a very high level, leveraging the power of our PPI Business System to deliver very strong performance and create value for our stakeholders. Our proven growth strategy is resonating more than ever with our customers, and we are well positioned to deliver a great 2026 and build an even brighter future for our company. It is an incredibly exciting time for Thermo Fisher Scientific. With that, I will turn the call over to Jim. 

Thank you, Marc, and good morning, everyone. I will take you through an overview of our third quarter results for the total company and then provide color on our four business segments. Finally, I will provide details on our updated guidance for the year. Before I get into the specifics of our financial performance, I will provide a high-level view on how the third quarter played out versus our expectations at the time of our last earnings call. As you saw in our press release, we delivered another outstanding quarter, with 6% organic revenue growth and 15% growth in adjusted earnings per share. These results are significantly ahead of the assumptions included in our prior guidance on both the top and bottom line. Q3 revenue was more than $200 million ahead of our prior guidance, including about two point stronger organic revenue growth and favorability from foreign exchange.

The organic revenue beat was driven by the team's outstanding execution in the quarter. On the bottom line, adjusted EPS was $0.26 ahead of our previous guidance, which includes $0.08 from excellent operational performance, including the pull-through on stronger revenue growth, $0.03 from foreign exchange, and $0.15 of net impact from tariff refunds recovered in the quarter. With respect to tariff refunds, in the third quarter, we received approvals and recognized the associated recovery for the vast majority of our total potential refund claims. The net impact on our third quarter financial results was approximately $60 million in adjusted operating income or 50 basis points of adjusted operating margin and $0.15 of adjusted EPS. The impact on revenue was negligible, and as a reminder, this was not included in our prior guidance. 

The net amount referenced incorporates targeted reinvestment we actively deployed into the business during the quarter, including accelerating AI deployment across the company, incrementally supporting the scale-up of new capacity in our Pharma Services business, and funding additional investments in our colleagues. The one-time nature of the refunds provided us a unique opportunity to make incremental short-term investments to further strengthen the company and support our long-term growth. With another very strong quarter behind us, we are incredibly well positioned to deliver a great year. Let me now provide you with some additional details on our performance. Starting with earnings per share. In the quarter, adjusted EPS grew by 15% to $6.68. GAAP EPS in the quarter was $4.64, up 9% from Q3 last year. On the top line, Q3 reported revenue grew 9% year-over-year.

The components of our reported revenue change included 6% organic growth, a 4% contribution from acquisition, and a 1% decrease due to the divestiture of our microbiology business, which closed in the middle of the quarter as expected. Turning to our organic revenue performance by geography. In Q3, North America and Europe both grew mid-single digits, and Asia Pacific grew low double digits, including China, which also grew low double digits. With respect to our operational performance, we delivered $2.97 billion of adjusted operating income in the quarter, an increase of 15% year-over-year, and adjusted operating margin was 24.5%, 120 basis points higher than Q3 last year. In the quarter, we continued to deliver very strong productivity and generated favorable volume leverage. This enabled us to offset the impact of unfavorable business mix and fund strategic investments to further advance our industry leadership.

Included within productivity is the net impact of tariff refunds I described. Moving on to the details of the P&L. Our adjusted gross margin was 42.8% in Q3. Adjusted SG&A in the quarter was 15.5% of revenue. R&D expense was $350 million in Q3, reflecting our ongoing investments in high impact innovation. R&D as a percent of our manufacturing revenue was 6.7% in the quarter. Looking at our results below the line, Q3 net interest expense was $165 million. The adjusted tax rate in the quarter was 11.6%, and average diluted shares were 371 million in Q3, 8 million lower year-over-year, driven by share repurchases, net of option dilution. Turning to free cash flow and the balance sheet. Year-to-date cash flow from operations was $5.9 billion, and free cash flow was $4.6 billion, after investing $1.2 billion of net capital expenditures.

In Q3, we repaid approximately $1.1 billion of senior notes and returned $175 million of capital through dividends. We also received $1 billion from the sale of our microbiology business. We ended the quarter with $6.1 billion of cash and short-term investments and $41.4 billion of total debt. Our leverage ratio at the end of the quarter was 3.4x gross debt to adjusted EBITDA and 2.9x on a net debt basis. Concluding my comments on our total company performance, adjusted ROIC was 11%. Now I'll provide some color on the performance of our four business segments. In Life Sciences Solutions, Q3 reported revenue increased 5% versus the prior year quarter and organic revenue growth was 1%. Growth in this segment was led by our bioproduction business.

Q3 adjusted operating income for Life Sciences Solutions increased 6% and adjusted operating margin was 37.6%, up 20 basis points versus the prior year quarter. During Q3, we delivered very strong productivity, which was partially offset by unfavorable mix and the expected impact from the acquisition of our filtration and separation business. As a reminder, we reached the one-year anniversary of the acquisition during the quarter. In the Analytical Instruments segment, both reported revenue and organic revenue increased 6% versus the prior year quarter. We delivered very strong growth in our electron microscopy business and also had good growth in our chromatography and mass spectrometry business. In this segment, Q3 adjusted operating income increased 26% and adjusted operating margin was 26.9%, up 430 basis points versus the year ago quarter. In the quarter, we delivered very strong productivity, generated good volume leverage, and had favorable mix.

These were partially offset by strategic investments in the business. Turning to Specialty Diagnostics. In Q3, reported revenue declined 6% year over year, and organic revenue was flat. Growth in this segment was led by our transplant diagnostics business. Q3 adjusted operating income for Specialty Diagnostics increased 6% and adjusted operating margin was 31.0%, 360 basis points higher than Q3 2025. During the quarter, very strong productivity was partially offset by strategic investments. Finally, in the Laboratory Products and Biopharma Services segment, reported revenue increased 15% and organic revenue growth was 10%. In Q3, we delivered very strong growth in our Pharma Services business and our research and safety market channel, and also had strong growth in our clinical research business. Q3 adjusted operating income in the segment increased 23% and adjusted operating margin was 15.5%, 100 basis points higher than the prior year quarter.

In the quarter, good productivity and the expected benefit from the Clario acquisition were partially offset by unfavorable mix and strategic investments. Turning to guidance. As Marc outlined, we're raising our 2026 full year guidance on the top and bottom line, as well as increasing our full year guidance for free cash flow. We now expect revenue to be in the range of $47.7 billion-$48.2 billion and adjusted EPS to be in the range of $25.13-$25.43, representing 10%-11% growth. On the top line, we're raising our full year organic revenue growth outlook to 4%. This reflects exceeding our Q3 organic revenue expectations and maintaining our organic revenue guidance of 4% for the fourth quarter. The year over year revenue tailwind from foreign exchange is approximately $200 million for the year and is unchanged from our prior guidance. 

On the bottom line, at the midpoint, we are increasing full year adjusted EPS by $0.15 comprised of the following: $0.09 from operational performance, including the pull-through on higher revenue, $0.05 from the net impact of tariff refund recovery after deploying about $40 million of additional reinvestment in the fourth quarter, and $0.01 from foreign exchange after updating the Q4 outlook for recent rate movements. Our guidance continues to assume 80 basis points of adjusted operating income margin expansion for the year. We are continuing to actively manage the company and drive excellent operational performance, enabling us to raise our top and bottom line guidance for the year while continuing to invest to build an even stronger company. To help you with your modeling, here are a few additional assumptions within the updated guide. We expect approximately $650 million of net interest expense for the year.

We continue to assume that the adjusted income tax rate will be 11.5%. We expect between $1.9 billion and $2 billion of net capital expenditures in 2026, and we are raising our expected free cash flow range to be between $7 billion and $7.5 billion for the year. In terms of capital deployment, we are assuming $4 billion of share buybacks, with $3 billion completed in January and $1 billion completed in the second quarter. We are assuming that we will return approximately $700 million of capital to shareholders this year through dividends. We estimate the full-year average diluted share count will be between 371 million and 372 million shares. To conclude, we delivered outstanding financial performance in the third quarter. We are actively investing to capitalize on the many exciting opportunities in front of us, and we are again raising our 2026 guidance on the top and bottom line.

With that, I will turn the call back over to Raf.

Operator, we are ready for the Q&A portion of the call.

We will now begin the question and answer session. In order to allow everyone in the queue an opportunity to address the Thermo Fisher management team, please limit your time on the call to one question and only one follow-up. If you have additional questions, please return to the queue. To ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tycho Peterson with Jefferies. Your line is open, Tycho. Please go ahead.

Hey, thanks. Good morning. Marc, we are clearly down the path of an end market recovery. We saw that in your 2Q results as well, and obviously you were positive on the September conference circuit. Maybe could you just give us the state of the union here and unpack the organic growth a little bit more by end market, starting with pharma, but also biotech, academic, applied, and diagnostics, and China, I will throw that in as well. Are you seeing a broader improvement in underlying customer activity versus the first half, or is the acceleration more concentrated by business? Thanks.

Tycho, thanks for the question. So when I think about the quarter, the activity that we saw step up in Q2 in our end markets continued. Actually, the quarter's end markets were very strong. When you look at pharma and biotech, you see that continue to progress and strengthen. It was great to deliver high single-digit growth in the quarter. To address your question, biotech, parsing it out, biotech continues to improve. We are getting good growth out of biotech, and the customer confidence there is strong. So that is very encouraging and one of the key fundamentals to the mid and long-term growth for our business, which is great. Academic and government was stable. Growth was flat in the quarter, played out as we expected that it would. We continue to see really good demand for our high-end instrumentation, where we have just amazing technology.

Chrome mass spec electron microscopy continues to generate strong demand from that customer set. Industrial and applied is really benefiting from our market-leading position in semiconductor from an electron microscopy perspective. We are a critical supplier for next generation of research in semiconductor as well as in the quality, control, and performance in the ramp of manufacturing. So demand continues to be strong there. And diagnostics and healthcare played out largely as we expected with low single-digit growth in the quarter, fairly similar to what we saw in the first half. So Tycho, thanks for the question on the roundup of the quarter.

Thanks, and to follow up, just to double-click on pharma, your largest market, probably the most important in the bridge to the 7% LRP. The trajectory here is exciting, right? With AI reshoring China, it is growing mid to high single digit this year. What does the path look like for that to return to 8%, 9%, or even 10% growth? I think the number one question most of us sell-siders get now is just how much of a tailwind is AI going to be in that process? Is it really just a rising tide on pharma R&D, some more instruments and consumables, or is there an underappreciated service or software component for you? How should we think about that over the next year? 

Yeah. When I think about the dynamic in pharma and biotech, confidence has increased meaningfully over the last few quarters for a few underlying factors, right? The negotiations with governments have gone well, and that is largely behind us. So there is a confidence in the environment that they are navigating. The science is going extraordinarily well, right? In terms of what is in their pipeline, the modalities. You are seeing it whether it is in the cardiovascular space, obesity. You are seeing it with the cancer vaccine. You are just seeing an incredibly exciting time, which is spurring a confidence and investment cycle, and you are seeing funding have improved in the biotech end market, and you are seeing really great work going on there.

As you know, because biotech companies more heavily outsource than the large pharma companies, which also outsource a lot, but we have a very large presence in serving biotech, and we are benefiting from that and quite encouraging.

When I think about AI, and you have heard me talk about it in the past, for our customers, it is an opportunity to improve their return on investment in the drug development process. With an improvement in the return on investment, that spurs more interest and more investment in the cycle. It is a virtuous cycle. We are seeing very high level of customer activity in clinical research in terms of the trend of excitement about the future, you are seeing it in just activity what our commercial team is looking at right now. So it is really an amazing time in terms of the outlook for the next few years in our industry. Thank you, Tycho.

Your next question comes from the line of Doug Schenkel with UBS. Your line is open, Doug. Please go ahead.

Good morning, and thank you for taking my questions. Marc, many of the leading indicators appear to be moving in the right direction, clearly, pointing to an acceleration in market growth over the coming quarters. Can you talk about the key investments you've made during the tools downturn that position Thermo to disproportionately benefit as we move into recovery? Where do you see the greatest opportunities building off of that to outperform your underlying markets as market growth accelerates?

Doug, thanks for the question. Congrats on your new role. When I think about how we invested over the last few years to position the company for a bright future, and when you think about my prepared remarks today. Roughly half of the time was on innovation, of which I had to actually cull quite a few exciting products that I just decided, given the hour of the morning, that six minutes was enough on innovation today. But we invested incredibly strongly there, and you're seeing that in a cadence of launches that is driving meaningful adoption. At the same point in time, we've invested very heavily in our Pharma Services and clinical research business in terms of the fundamental capabilities, how we're applying AI effectively, how we are investing to scale up that business and ultimately bring medicines to market faster and more cost effectively. 

And that is being well adopted by our customers. You've seen that in the capacity expansions that we announced. You saw that in the moves we've made in bioproduction, both with product launches, but interestingly enough, the acquisition of the filtration separations business was another thing that we did during these less growth environment that we were in. And that business is doing really well, and our customers are excited, based on our trusted partner status, just to work with us in that area. And then finally, more recently, we acquired Clario, and it's a great technology set of capabilities that is going to be one of the key enablers of development going forward. So those investments position us for being able to deliver against our midterm commitments, and positions very well for that environment of 7% growth organically for us as well.

So we're really excited in terms of what the future holds.

Thanks for that, Marc. And a quick follow-up on AI, artificial intelligence. Just to make sure I'm thinking about it the right way. In the midterm, it sounds like you expect AI to create some incremental demand for your products and services while improving customer productivity, which kind of creates a virtuous cycle of where your ROI amongst your customers improves, that further creates increases in demand for your product. So I think that's what you're describing in terms of the midterm. And then longer term, I guess the question is, could this potentially drive actually an increase to your long-term company organic growth algorithm?

Yeah. So when I think about how AI, I think you characterized it well in terms of the midterm. I actually believe that what we've learned in the two massive sort of medicines that, in terms of scale of adoption, in terms of revenue, the COVID-related vaccines and the GLP-1s, which are kind of unprecedented in the level of adoption, that when customers bring out medicines that are relevant to making a big difference in human health, there's a huge end market for it globally, and that the more that AI enables better medicines for unmet needs, the brighter the future is. And we're very excited about the work our customers are doing and the work that we're doing to enable that.   

The way I've always thought about it, and I've said this a number of times, is when I think about truly normal, 7% is a reasonable organic growth outlook. It's not the cap on it, right? It's just because it's been a few years since we've been at that range, we want to get there first. I've always been a huge believer in the fundamental science and the role that we play. This should be a trend that drives a really great outlook for the long term as well. Thanks for the question, Doug. 

Your next question comes from the line of Jack Meehan with Operon Research. Your line is open, Jack. Please go ahead.

Thank you. Good morning, guys. Jim, I wanted to

Just get your thoughts on the phasing from 3Q to 4Q. You just did 6% organic growth, and you are maintaining the guide of 4% in the fourth quarter, which has the extra selling day. Can you just talk about how much of this is conservatism versus Pharma Services pacing, or anything else you would call out?

Yeah, Jack, thanks for the question. If you step back, we said we grew 3% in the first half, and we expected to grow 4% in the second half. Now we are saying we expect to grow 5% in the second half. So we are raising our second half organic growth outlook. What you saw in the third quarter was very strong performance in our Pharma Services business. We said all along that would accelerate meaningfully in the second half, and what we saw was a lot of that was weighted toward the third quarter. So there is some customer activity timing that was completed in the third quarter, but we are fully offsetting that with the momentum of the business in the fourth quarter to maintain our guidance.

Pharma Services is the main driver of the sequential growth from 6% to 4%, but we feel really good about that business. The commercial momentum is very strong, and the second half is playing out exactly as we expected. 

Excellent. Okay. Marc, maybe building off that, I wanted to get your thoughts on 2027 here on October 21st. So you have your LRP for 2026, 2027. You have talked about progressing through this 3%-6% range. Also, relative to Tycho's question, it seems like you feel good about end market recovery relative to, I do not know if you view it 5% in the second half or 4% in the fourth quarter, this exit rate. Just any updated thoughts, and how do you feel about progressing toward the higher end of that 3%-6% range in 2027?

Yeah. Jack, thanks for the question. We look forward to giving our Q4 and full year results and our guidance on February 2nd at 8:30 A.M., so you can pencil it in. In terms of

how we think about. Exactly, we all get a little extra sleep that way. What I would say is, the way that I would think about it is, how we do guidance is we think about the year, first of all. What did we just experience? We look at how the end market has evolved, right, during the course of that year. Then we look at what did we actually do ourselves internally to set ourselves up for what's the appropriate growth against those market aspirations. At this moment in time, right, we grew 2% last year. We're on track to grow 4% this year with a stronger second half than first half. It's setting up for us to be able to continue to progress through that midterm framing that we gave some time back.

Really our goal is to be able to exit 2027 back in a normal period. I'm not smart enough to know exactly which quarter is it going to happen, sometime in the back half of the end of 2027, first half of 2028. I don't think anybody's that smart, but it's clearly lining up the way we said a couple of years ago of midterm framing, markets becoming predictable, strengthening, and the underlying factors really setting up really nicely for us to be able to return to even stronger growth over the next couple of years. Thanks, Jack.

Your next question comes from the line of Dan Arias with Stifel. Your line is open, Dan. Please go ahead.

Yeah, good morning, guys. Thank you. Marc, maybe just to follow up on your biotech comments and the improvement there. Can you just maybe talk to that from a portfolio standpoint? I think the idea was that the pickup first showed up in the channel business last quarter. Did we expect that to expand the reagent segment? I mean, LSS was up 1% this quarter, so it does not feel like you are seeing that right now, but correct me if I am wrong. How do you see the likelihood of that trend broadening out into next year?

Yeah, Dan, thanks for the question. So in terms of biotech, very good characterization. What I would say is, in aggregate, the end market has strengthened, continued strengthening quite meaningfully. So the market is good. I spend a lot of time with customers, and actually, when I am talking to the customer base, there is a real excitement. First of all, in the confidence that they are going to get funding, in the quality of their pipeline, how their pipeline is developing. It really is an exciting time for our customers. When you look at how that has progressed from the period where biotech was more challenged, the first thing we saw was authorizations and clinical research pick up, right? We have been talking about that for many quarters. That turned into revenue growth, has picked up, and is growing nicely.

You then saw the next thing which would be logical, which is laboratory-based activity happening, the research and safety market channel serving biotech. We highlighted it last quarter in terms of serving biotech. That strengthened further in that customer base in Q3. Life Sciences research, which is the high-tech reagents, as we said last quarter, we would expect that to be the next thing to happen. It was fairly similar to what we saw in Q2, which is what we expected. We would expect over the next couple of quarters that that customer base would be spending more on those technologies, which will be the next phase in getting back to normal biotech conditions.

Okay, helpful. Jim, on Solventum, I think we crossed over on annualization of the deal this quarter. What was the organic contribution that you saw? I think there was about a month. What are you assuming going forward there as a part of the overall organic outlook for 4Q? Thank you.  

Yeah. The business is performing well, Dan. Thanks for the question. The month is not really a meaningful driver of the total in the segment or at the company level. Business is performing well. We said it would be mid to high single-digit grower, and it is on track. We are performing well. We are investing in capacity and customer adoption is quite strong. So we are happy with how the business is performing.

Your next question comes from the line of Matt Larew with William Blair. Your line is open, Matt. Please go ahead.

Hi. Good morning, everyone. Marc, today you talked about the new AI clinical research assistant. Over the last couple of quarters, you've described some enhancements in terms of integrating AI into instruments. How should we think about the incorporation of the AI tools offerings to customers in terms of the ability to monetize those offerings versus perhaps enhancements that are required to maintain share or leverage to gain share?

Yeah, so Matt, it's a great question. When I think about in our products business how we're applying AI, let me talk about South Korea for a second because I think it can actually provide a little bit of context. If you think about Thermo Fisher's role in scientific workflows, we sit side by side with researchers and help them, particularly in the life sciences, actually design how they work. They do that with our application specialists. They actually do that through our websites as well, right? We are an essential partner in that journey. With the adoption of AI, there's opportunities to improve how you do those scientific workflows. So we actually have created our first center. We did it in Korea because the environment in Korea is such that the government is rewarding researchers to apply AI.

So all of the researchers are very incented to adopt it. So we're collaborating, learning, teaching, and doing work together to accelerate the adoption of our technologies and ultimately consume more reagents and instruments. Going forward, you're going to see new activity because customers are trying to populate biological models, and I've talked about that in the past. So you're seeing new demand, whether it's at large pharma, you heard a lot about lab in the loop, lab of the future, and many different monikers for it, but really, it's quite an exciting time, and that will generate demand. Then there's a requirement as well, right? There's a cost that our technologies need to be automated if it's an instrument so that it can effectively help support autonomous science. 

The reason that we spend the level in R&D that we do is to ensure that our technologies are well-equipped to meet the needs of our customers, and we've been able to track well from that perspective. I think it's super positive. On the other side of the equation is in the services business. I picked one example because in a way, it's easy for all of us to visualize, because of the importance of clinical research associates in the industry. We're applying AI across clinical research in terms of our capabilities, and whether that's in how we design our protocols, how we actually predict enrollment so that we can actually have the right number of sites. It really is an amazing set of capabilities that are allowing us to win a lot of business and ultimately position the company for a really bright future.

Okay. That's great to hear. I just wanted to follow up on lab solutions. That organic growth was a little light of our estimate. I think you mentioned bioproduction being strong there. Just curious if you could break out at all the performance in that segment, and perhaps within that, give us an update on reshoring contribution and expectations.

Yeah. When I think about Life Sciences Solutions, what I would say is, one of the questions around biotech, we still have a more muted environment for our bioscience and genetic science reagents from that demand. But we've made really significant investments to strengthen our capabilities. We actually feel good about how the prospects for that business will continue to strengthen because of the actions that we've taken. We're not waiting for market conditions that'll help us, but we're taking the right actions to accelerate growth. You see that in, we've been talking about our proteomics set of capabilities with Olink, the joint venture with Mayo Clinic. You hear it with the launches around clinical next-gen sequencing in terms of technology there, excited for the expanded volumes that we can drive with the 560 Chip.

Lots of good things happening there that set ourselves up going forward. From a bioproduction perspective, it was our strongest growing business as it normally would be in the business, and we certainly are normalizing some of the very tough comps that we created, which is a good thing in terms of how strong the business has grown. We got good growth there, but a little bit less than what we had in the last quite a number of quarters.

Your next question comes from the line of Dan Brennan with TD Cowen. Your line is open, Dan. Please go ahead.

Great, thank you. Thank you for the question here. Maybe the first one just on how the quarter came in versus expectations. It sounded like Patheon was a key driver in the quarter, maybe some of it timing in Q3 versus Q4. I know you addressed it at the beginning of the call, but can you just lay out, Marc, versus expectations on the quarter in terms of what drove the beat beyond Patheon?

Yeah, let me start with Jim giving the recap there first, Dan.

Yeah. The strong performance in the quarter was really driven by the strong performance in Pharma Services, which is largely a timing element between Q3 and Q4, and strong growth across pharma and biotech. We talked about that, the strength across the end market. We also saw very strong performance in our Analytical Instruments business. Our electron microscopy business in particular, seeing very strong demand from semiconductor applications. The team executed very well to execute well for customers and to have a strong quarter of deliveries in the quarter. Specifically in China had a great quarter. I mentioned low double-digit growth and that was good to see that sequentially continue to improve, primarily in pharma, biotech, and industrial and applied markets.

Terrific. Thank you for that. Not to belabor the artificial intelligence question, Marc, but it's obviously such a huge topic right now. Maybe just back to Doug's question on the potential impact from AI. When we think about the 7% LRP, I think you mentioned it's not a ceiling. Is there any way for us at this point to frame for Thermo Fisher, kind of how we might size a benefit? I mean, is it a point, 2 points over time? Is that reasonable? As we think about it, is this more like a three to five-year phenomenon when we might see a benefit, or could something come sooner? Just wondering, is it more on the service side or is it more on the instrument consumable side? Thank you.

Yeah. Dan, thanks for the question. What I would say is, when we thought about our investor day back in May, we framed both the market implications and viewed that quite positively, as well as different types of examples of how we're applying AI within our company. What's become most relevant is really how we're applying it in products and services and how we're enabling our customers, right? There's amazing things about how we run the company differently and how that will continue. I think when we give our outlook on February 2nd, what we will do is a little bit highlight about some of AI, and how we see the market playing out.

When we do our next investor day, I think we'll do chapter two and answer your question, because I actually like the question quite a bit about doing some quantification on that, to think about the longer plus minuses that we could see happening. But we're super bullish, actually, about what the implications are for our customers, for patients that will benefit from those medicines, and our role in enabling it. Thank you, Dan.

Great. Your last question comes from the line of Evie Koslosky with Goldman Sachs. Your line is open, Evie. Please go ahead.

Great. Thank you so much for taking my questions. I wanted to touch on the Accelerator Drug Development strategy, given the strength this quarter. Maybe walk us through what you're seeing from a share gain perspective within clinical and commercial services, and then within clinical research, how your customers view your value prop in the age of AI relative to both insourcing capabilities and then also relative to peers.

Yeah. Evie, thanks for the question. When I think about Accelerator Drug Development, customers are in a fiercely competitive world, right? They want to bring their breakthrough medicine to market. They want to be first to market. They want to have the best products to effectively have the biggest human health impact, right? Therefore, what they're looking for is capabilities that give them the highest confidence that they can be first and have the best prospects of success. Accelerator Drug Development, which has been in operation for a couple of years, has allowed us to win significant business across our clinical research business and our Pharma Services business. When you click down the details, you see that in our phase I to phase III studies on the clinical development side, but you also see it in the clinical trials, packaging, logistics, capabilities as well.

Very, very strong demand because our customers have seen the benefits themselves about the time we can shave out of that process, right? That is unique to Thermo Fisher, right? In terms of the capabilities. AI is being actively deployed. I focused a lot on this call just about clinical research, and I'll rotate through the businesses over time to highlight different ones about how we're deploying it. But it's important to our customers because often it is the gating factor in terms of what's the timeframe to bring a medicine to market and the things that we're doing to shave time, improve the probability of success, curtail costs. These things are really important to our customers and we've got really good momentum in the market. I feel good about our competitive position and customer adoption.

We serve both pharma and biotech, and they have different strategies, if you will, in terms of how they do it. But we're well positioned to serve both sets of customers and feel good about the outlook. Hopefully that's helpful, Evie.

Yeah, no, definitely helpful. Thank you. Within your bioprocessing business, I think you said you've seen strong growth, and then I think you called it out again this quarter. I guess how durable is this momentum? Maybe walk us through your recently expanded bioprocess design centers across the various geographies and how those have helped you win customers.

Yeah. In terms of the business, as you know, we have leading positions in cell culture media, in single-use technologies. We have strong positions in terms of the ones that we're growing even more in terms of purification and the filtration capabilities. So where we don't have market leadership, we really are continuing to be well-positioned. The business, while delivering good growth, was less strong in terms of the growth relative to the past few quarters, just given the comparisons that it had. But the business has performed at a high level, and we think it has very good long-term prospects. The business, I think long-term, is a high single-digit, low double-digit growth business, and we feel good about our ability to do that.

The bioprocess design centers are incredibly important because it allows customers to actually work with our scientists in our facilities to actually develop their process and ultimately produce their medicines. One of the great things is when we launched the 5 L DynaDrive, the benchtop scale, what's really unique about that is it's the exact same technology all the way through 5,000 L. So customers can actually start in the lab all the way to the highest volume production, and there's tremendous excitement in terms of that same set of capabilities. So it's really a great business that we're well-positioned going forward. With that, let me just turn to my closing comments. First, thanks for participating in the call today.

We're pleased to have delivered an excellent quarter, and we're on track to deliver a strong year as we continue to create value for all of our stakeholders and build an even brighter future for our company. We look forward to updating you on our Q4 and full-year results on February 2nd at 8:30 A.M. Thanks again for your support of Thermo Fisher Scientific. Have a good day, everyone. 

This concludes today's call. Thank you for attending. You may now disconnect.

Thermo Fisher Scientific (TMO) Q3 2026 Earnings Call Transcript

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