01—Abstract
Summary
Summary of the 10-Q filed July 22, 2025. Cited figures are marked; the original filing is the authoritative source.
Danaher's second-quarter 2025 results were dominated by a non-cash impairment.
Revenue rose 3.5% year over year to $5.94 billiona, with core sales up 1.5% and currency adding 2.0%. Diagnostics and Biotechnology grew core sales, while Life Sciences declined. Net earnings fell 39% to $555 million, or $0.77 per diluted share, versus $1.22 a year earlier.
The drop reflects a $432 millionb pretax ($328 million after-tax) impairment of a genomics consumables trade name in Life Sciences, which was SG&A-classified and drove the operating margin down to 12.8% from 20.3%. Excluding the charge, the underlying picture is steadier than the headline suggests, though SG&A and gross margin pressure from tariffs and currency are worth monitoring. Cash generation and the balance sheet remained solid.
Operating cash flow for the first half was $2.6 billionc, down 16%, largely reflecting lower earnings and working-capital timing. Management repurchased about $1.1 billion of stock in the first half, and cash rose to $3.0 billion. Total debt increased to $17.4 billion, and the company is shifting part of its commercial paper into long-term classification.
Management expects enacted tariffs to add several hundred million dollars of incremental cost for 2025, which it expects to largely offset, while the effective tax rate for the remainder of 2025 is guided to about 17%d. The filing also flags forward-looking risks: additional tariffs that have been delayed or threatened could be material, academic and government demand is expected to stay weak, and China volume-based procurement continues to weigh on Diagnostics. Goodwill headroom in the reorganized Life Sciences reporting units is narrower than before, with a hypothetical 10% fair-value decline still leaving cushion, so further impairments are possible if genomics demand does not recover.
02—Key points
Key Highlights
- Q2 2025 sales of $5.94 billion rose 3.5% year over year, with core sales up 1.5% and currency adding about 2.0%.
- Q2 net earnings fell 39% to $555 million ($0.77 diluted EPS) from $907 million ($1.22), driven by a $432 million pretax trade name impairment in Life Sciences.
- Operating margin fell to 12.8% from 20.3% in Q2 2024; excluding the impairment, the decline would be far smaller, but SG&A rose to 39.8% of sales from 32.5%.
- Biotechnology core sales grew 6.0% in Q2 and operating margin expanded 170 bps, while Life Sciences core sales declined 2.5% and posted an operating loss of $239 million.
- First-half operating cash flow declined 16% to $2.6 billion, and cash rose to $3.0 billion; $1.1 billion was spent on share repurchases in the first half.
- Total debt rose to $17.4 billion, and management expects enacted tariffs to add several hundred million dollars of 2025 costs, which it plans to largely offset.
- The effective tax rate for the remainder of 2025 is guided to about 17%, and goodwill headroom in the reorganized Life Sciences reporting units narrowed.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Danaher Corp kept $0.09.
- Revenue$5.94B100.0%
- Cost of revenue−$2.41B40.7%
- Gross profit$3.52B59.3%
- Operating costs−$2.76B46.5%
- Operating income$760.0M12.8%
- Interest, other & tax−$205.0M3.5%
- Net income$555.0M9.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 22, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $5.94B$5.74B | +3.4% |
| Cost of Revenue | $2.41B$2.31B | +4.2% |
| Gross Profit | $3.52B$3.43B | +2.8% |
| R&D Expenses | $403.00M$391.00M | +3.1% |
| SG&A Expenses | $2.36B$1.87B | +26.3% |
| Operating Income | $760.00M$1.17B | −34.9% |
| Net Income | $555.00M$907.00M | −38.8% |
| EPS (Basic) | $0.77$1.23 | −37.4% |
| EPS (Diluted) | $0.77$1.22 | −36.9% |
| Shares Outstanding (Basic) | 716.50M737.60M | −2.9% |
| Shares Outstanding (Diluted) | 719.10M742.40M | −3.1% |
05—Questions
Frequently Asked Questions
What caused the sharp drop in Q2 2025 net earnings?
The main driver was a non-cash pretax impairment of $432 million ($328 million after-tax, or about $0.46 per diluted share) on an indefinite-lived genomics consumables trade name that was reclassified as finite-lived after a Life Sciences reorganization. Underlying sales growth and margins in the other segments were comparatively stable.
Is the impairment a sign of broader problems in the business?
The filing attributes it to lower genomics demand from emerging biotech customers, academic and government funding pressure, and two large customers reducing demand for certain product lines. Management says the remaining net book value of $76 million will be amortized over eight years. Goodwill testing showed no impairment, though headroom narrowed, so investors should watch whether genomics demand stabilizes.
How exposed is Danaher to tariffs and currency movements?
Management expects enacted tariffs to add several hundred million dollars of incremental costs in 2025 and plans to largely offset the operating profit impact through footprint changes, surcharges and productivity actions. Currency added about 2.0% to Q2 sales, but the company warns that a stronger U.S. dollar would reduce future sales and results. Additional delayed or new tariffs could be material.
How is the company's liquidity and capital allocation position?
Cash and equivalents were $3.0 billion at June 27, 2025, with about $2.7 billion held outside the U.S. Operating cash flow was $2.6 billion for the first half. The company repurchased roughly $1.1 billion of stock and paid $423 million in dividends. Debt rose to $17.4 billion, and about $2.6 billion of euro commercial paper and notes are classified as long-term because of the company's ability to refinance under its $5.0 billion credit facility.
06—Continue