01—Abstract
Summary
Summary of the 8-K filed July 21, 2026. Cited figures are marked; the original filing is the authoritative source.
Danaher reported second quarter 2026 results for the period ended June 26, 2026, with GAAP net earnings of $870 milliona, or $1.23 per diluted share, up 60% year-over-year, and revenue up 5.5% to $6.3 billion.
The GAAP improvement is flattered by a sharp drop in SG&A expense and by a prior-year impairment charge of $432 millionb on a trade name, so the cleaner comparison is the non-GAAP measure. Adjusted diluted EPS rose 8.0% to $1.94, and non-GAAP core revenue grew 3.0%, or 4.5% excluding respiratory testing. Operating cash flow was $1.5 billion and free cash flow was $1.3 billion.
Interest expense rose and interest income increased sharply, reflecting the debt raised to finance the Masimo acquisition, which Danaher completed earlier than anticipated. Management raised full-year 2026 adjusted diluted EPS guidance to $8.45 to $8.60c from $8.35 to $8.55, while narrowing the organic growth outlook to 3.0% to 4.0% core revenue growth. The third-quarter core growth outlook is 2.0% to 3.0%.
Bioprocessing was a bright spot in orders, growing in the mid-teens, but reported bioprocessing revenue was affected by customer project timing. Management expects to exit 2026 at a mid-single-digit core growth rate. Danaher also disclosed a pending acquisition of StatLab (about $250 milliond in 2025 revenue, more than 85% recurring) by Leica Biosystems, expected to close by year-end 2026 and to be accretive in its first full year.
For investors, the key questions are the durability of the core growth recovery, the pace of deleveraging after the Masimo financing, and how much of the EPS raise reflects operations versus the lower share count and tax and interest items. Respiratory testing revenue, which is highly sensitive to flu severity, continues to distort reported Diagnostics growth, and the company has added a new non-GAAP measure to address this. Management also plans to exclude tariff refunds from core sales beginning in the third quarter, a change that could make future growth comparisons harder to read.
02—Key points
Key Highlights
- GAAP diluted EPS of $1.23 rose 60% year-over-year, but this is inflated by lower SG&A and the absence of a prior-year $432 million trade name impairment; adjusted diluted EPS of $1.94 rose 8.0%.
- Revenue grew 5.5% to $6.3 billion, of which non-GAAP core revenue grew 3.0% and 4.5% excluding respiratory testing; acquisitions contributed about 1.5 points and currency about 1.0 point of headwind.
- Full-year 2026 adjusted diluted EPS guidance was raised to $8.45 to $8.60 from $8.35 to $8.55, while full-year core revenue growth guidance is 3.0% to 4.0%.
- Third-quarter 2026 core revenue growth is guided to 2.0% to 3.0%, with Diagnostics expected to be flat and Life Sciences up 3.0% to 4.0%.
- Bioprocessing orders grew in the mid-teens in Q2 even though revenue was pushed out by customer project timing, which management cites as a leading indicator of recovery.
- Operating cash flow was $1.5 billion and free cash flow was $1.27 billion in the quarter, up about 15.5%, with a free cash flow to net earnings conversion ratio of 1.45.
- Pending StatLab acquisition by Leica Biosystems (about $250 million in 2025 revenue, over 85% recurring) is expected to close by year-end 2026 and be accretive in its first full year; Masimo acquisition closed ahead of schedule.
03—Questions
Frequently Asked Questions
Why did GAAP EPS jump 60% if the underlying business grew only modestly?
Most of the GAAP increase comes from lower operating expenses and the absence of a $432 million pretax impairment on a Life Sciences trade name recorded in Q2 2025. SG&A fell to $2.07 billion from $2.36 billion, though the release does not fully explain that decline. Adjusted diluted EPS, which excludes amortization, investment gains and losses, and acquisition-related items, grew a more modest 8.0% to $1.94.
What is driving the change in core sales and what is the respiratory testing effect?
Core sales grew 3.0% in the quarter, but 4.5% excluding respiratory testing, which benefited from elevated respiratory testing demand in Q2 2026 relative to the prior year. Respiratory testing demand depends on flu severity and is outside management's control, so Danaher has added the 'core sales excluding respiratory testing' measure. Management expects this tailwind to fade in the second half, with the full-year impact now expected to be low-single digits.
How did the Masimo acquisition affect Danaher's balance sheet and financial results?
Danaher incurred significant debt to finance Masimo. Interest expense rose to $107 million in the quarter from $71 million, and interest income increased to $61 million from $8 million, largely reflecting cash raised ahead of closing. Investing cash outflows were $10.1 billion and financing inflows were $7.3 billion in the quarter. Full-year 2026 net interest expense is guided at about $310 million, and the acquisition added roughly 1.5 points of acquisition-driven growth in the quarter.
What changes in non-GAAP reporting should investors be aware of?
Beginning with the Q3 2026 Form 10-Q, Danaher will exclude from core sales any tariff refunds returned or expected to be returned to customers for prior-period tariffs. The company says this will help show underlying trends, but it could make the core sales figures less comparable with historical periods. Investors should review the reconciliation schedules in future releases to see how large these exclusions are.
What is the outlook for bioprocessing and the Life Sciences segment?
Management described Life Sciences as delivering its strongest quarter in several years, with Q2 core growth of 5.5%, and expects Life Sciences core growth of 3.0% to 4.0% in both Q3 and Q4. Bioprocessing orders grew in the mid-teens, but revenue timing was affected by customers delaying projects. Biotechnology is guided to mid-single-digit core growth for the rest of 2026. The company expects the total business to exit 2026 at a mid-single-digit core growth rate, which depends on the orders converting to revenue.
04—Continue