08-05-2025
Bruker Corp (BRKR) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amidst Market Challenges
Bruker Corp ( NASDAQ:BRKR ) is implementing mitigation actions, including pricing strategies and supply chain reengineering, to offset more than half of the operating profit headwinds in 2025, with full offset expected by 2026.
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Q & A Highlights
Q: Could you elaborate if there was any pull forward in the quarter because of the tariff worries or any other worries in the market that the customers might have had? And are you making any impact from that as a result of that pull forward? A: There really wasn't any pull forward due to tariffs or ACA/GOV. However, the UK 1.2 gigahertz system installation went smoothly and was completed in Q1 instead of Q2, but this wasn't market-driven. We don't see any cancellations in China yet, but there are delays due to customers not being able to pay the extra 125% import duties. In the US, we see uncertainties and delays but no cancellations yet.
Q: When we think about the offsets of the AI chips onshoring of that, the funding initiatives in Germany, maybe lower interest rates, can you walk us through how are you thinking about some of those offsets potentially mitigating the impact maybe into the second half? A: AI remains strong, and our tools are essential for AI advancements. We see strong demand from companies like CMSE. German and Korean stimulus funding, European defense spending, and semiconductor metrology strength are positive trends. While these may not significantly impact this year's revenue, they are expected to provide tailwinds for 2026 and beyond.
Q: Could you talk about how you would respond to a potential 20-25% cut to next year's US academic government budget? A: We are committed to resuming significant margin expansion by 2026. Our operational excellence and integration strategies remain intact, though this year we're playing defense. Growth drivers like biopharma recovery, AI, European investments, and clean energy projects will play a bigger role next year. We expect US ACA/GOV to be weak next year but likely growing compared to this year's disruptions.
Q: Can you talk through the confidence level of offsetting tariffs into 2026 and preserving that number? A: We're taking additional pricing actions and exploring supply chain alternatives, such as final assembly in different regions. Cost actions are significant, with $30 million expected this year. Supply chain reengineering will have a more substantial effect next year. We're confident in offsetting more than half of the margin headwinds this year and fully by 2026.
Q: Can you talk to us about your expectations for bookings going forward? Do you think we've kind of hit bottom on orders? A: The academic order weakness is just beginning, with the brunt expected in Q2 and Q3. Despite this, we expect to end the year with a 6.5- to 7-month backlog, indicating strength in other areas. Our long-term normalized backlog should be around 5x, and we anticipate maintaining a high backlog level.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
