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- **Revenue Growth**: Full year +7.7% YoY, Q4 +7% YoY, driven by Interventional (+15%) and Connected Care (+20%).
- **Margin Expansion**: 25% operating margin in 2025, targeting same in 2026 despite 80bp tariff headwind.
- **Strategic Moves**: $30M sales force expansion, $50M R&D investment, $200M cost-out program. Waters transaction to unlock $4B buybacks (+200bp EPS).
- **Risks**: China VoBP (-mid-teens 2026), vaccines (-25%), Alaris lapping (-100bp).

**【CEO Summary Section】**
- **Q4 and Full Year 2025 Results**: Revenue of $5.9B in Q4 (+7% YoY, 3.9% organic), full year $21.8B (+7.7% YoY). Adjusted EPS $3.96/Q4 and $14.40/full year, up 9.6% YoY. Vaccines and Biosciences faced headwinds, but 90% of portfolio grew mid-single digits.
- **Strategic Initiatives**: $30M sales force expansion in high-growth markets (e.g., PureWick at-home, Europe Surgery). $50M corporate costs shifted to R&D for innovation (e.g., AI-enabled BD Incada). 2-year $200M cost-out program to optimize expenses.
- **Fiscal 2026 Guidance**: Low single-digit revenue growth (headwinds: Alaris lapping, China mid-teens decline, vaccines -25%). Adjusted EPS $14.75-$15.05, +3.5% YoY (excluding 80bp tariff impact). New BD post-Waters: >200bp EPS accretion from $4B transaction proceeds.

**【CFO Financial Commentary】**
- **Segment Performance**: 
  - **BD Interventional**: 15%+ growth in UCC (PureWick) and Surgery (Phasix mesh). 
  - **Connected Care**: APM pro forma +20%, MMS Alaris installations at record levels. 
  - **Pharm Systems**: Biologics +high single digits, offset by vaccines -20% of segment. 
  - **Life Sciences**: BACTEC utilization >85%, FACSDiscover driving U.S./EMEA growth.
- **P&L Metrics**: Adjusted gross margin 54.2% (up 140bp YoY), operating margin 25.8%. Free cash flow $2.7B, net leverage 2.8x. FY26: 25% operating margin target, 80bp margin expansion from gross margin (BD Excellence productivity gains).

**【Q&A Key Highlights】**
- **China Strategy**: 2026 guidance includes mid-teens decline due to VoBP (80% coverage by end-2026). 4% of revenue post-Waters spin, easing long-term comparisons.
- **Capital Allocation**: $250M Q1 buyback, $4B Waters proceeds (≥50% to buybacks). Target 2.5x net leverage, 64% free cash flow conversion.
- **Margin Expansion**: Gross margin fueled by 8%+ productivity gains. FY26: 25% operating margin despite 80bp tariff headwind. Long-term: >20% EPS growth via buybacks and margin expansion.
- **Waters Transaction**: FTC cleared, closing Q1-2026. NewCo EPS +200bp vs. WholeCo, driven by $4B proceeds and 20x multiple on spun-off assets.

Becton, Dickinson and Company (BDX) Q4 2025 Earnings Call Transcript

- **Revenue Growth**: Q3 revenue up 8.5% to $5.5B, with 3% organic growth driven by Pharm Systems and BACTEC recovery.
- **Margin Expansion**: Adjusted gross margin 54.8% (up 50bps YoY), operating margin 25.8% (up 60bps YoY) due to BD Excellence.
- **Strategic Separation**: $4B cash distribution from Waters deal (≥50% to buybacks) and FY26 tariff impact reduced to $275M.
- **Innovation Momentum**: FACSDiscover A8, Libertas Injector, and Pyxis Pro launches driving medical tech leadership.
- **EPS Guidance**: FY25 EPS +9.4% at midpoint, with FY26 margin expansion via BD Excellence and tariff mitigation.

**【CEO Summary Section】**
- Q3 revenue reached $5.5 billion, up 8.5% year-over-year, with 3% organic growth. New BD organic growth was 4%, driven by sequential improvements in Pharm Systems and BACTEC utilization.
- Adjusted gross margin expanded to 54.8% (up 50bps YoY) due to BD Excellence initiatives, while adjusted operating margin rose to 25.8% (up 60bps YoY).
- Announced strategic separation of Biosciences and Diagnostics business with Waters via Reverse Morris Trust, expected to close in Q1 2026. Post-separation, New BD will focus on medical technology with >90% consumable revenue and enhanced capital allocation (≥50% of $4B cash distribution to buybacks).
- Key product launches include FACSDiscover A8 (exceeding sales targets), BD Libertas Wearable Injector (entered clinical trial), and Pyxis Pro (AI-enabled drug dispensing system).
- Raised FY25 EPS guidance to $14.30-$14.45 (midpoint +$0.18), with FY26 tariff impact expected at $275M (vs. FY25's $90M).

**【CFO Financial Commentary】**
- Q3 adjusted EPS of $3.68 exceeded expectations, driven by 5.1% growth and strong margin execution. Free cash flow year-to-date was $1.7B, with $1B share buyback completed ahead of schedule.
- Regional growth led by U.S. (mid-single-digit) and Greater Asia (excluding China), offset by China's market headwinds. Segment highlights:
  - **Medical**: Pharm Systems +4.8% (biologics +double-digit), MMS mid-single-digit growth
  - **Life Sciences**: Biosciences +mid-single digits (FACSDiscover A8 launch), DS sequential improvement
  - **Interventional**: UCC +12%, Surgery mid-single-digit
- FY25 guidance: Revenue $7.8-8.3% growth, EPS +9.4% at midpoint. FY26 tariff impact expected to moderate to $275M.

**【Q&A Highlights】**
- **Growth Outlook**: CEO Polen emphasized New BD's mid-single-digit+ growth trajectory, driven by UCC innovation, APM organic growth, and BD Excellence margin expansion. Q4 investments in selling & marketing to accelerate momentum.
- **Margins**: CFO DelOrefice noted Q4 operating margin may step down sequentially due to $90M tariff impact, but 2025+ margin expansion intact via BD Excellence. Post-separation, RemainCo margin expected to remain stable with TSA/MSCA offsets.
- **Tariffs**: Active mitigation efforts reduced FY26 impact to $275M (vs. initial expectations), with sourcing diversification and USMCA compliance initiatives.
- **Connected Care**: Launch of Pyxis Pro and Incada AI platform positions BD to capture $1B+ HPV testing market with FDA-approved at-home self-collection kit (expected mid-FY26).

Becton, Dickinson and Company (BDX) Q3 2025 Earnings Call Transcript

- **Revenue Growth Challenges**: Q2 organic growth of 0.9% due to reduced research funding and slower diagnostics adoption, but FY25 guidance revised to 3%-3.5% with Q4 acceleration.
- **Margin Strength**: 54.9% gross margin (190bps YoY) from BD Excellence, offsetting $90M tariff impact and driving $3.35 EPS growth.
- **Strategic Investments**: $2.5B U.S. manufacturing to mitigate tariffs, $1B share buyback, and AI-driven efficiency improvements.
- **Growth Catalysts**: Pharma Systems (GLP-1), PureWick, and APM post-anniversary expected to drive second-half momentum.

**【CEO Summary Section】**
- Q2 revenue grew 6% (0.9% organic), below expectations due to slower-than-anticipated recovery in Life Sciences and Diagnostics. Challenges included reduced research funding in Biosciences and delayed blood culture testing adoption.
- Adjusted EPS exceeded expectations at $3.35 (5.7% growth), driven by 190bps gross margin expansion to 54.9% from BD Excellence initiatives (600+ Kaizens YTD).
- Strategic investments include $2.5B U.S. manufacturing over 5 years to mitigate tariffs, with FY25 tariff expense estimated at $90M. Second-half growth expected to accelerate in Pharma Systems, Interventional, and APM post-anniversary.
- Separation of Biosciences/Diagnostics on track, with FACSDiscover A8 launch and Phasix umbilical showing strong momentum.

**【CFO Financial Commentary】**
- Q2 adjusted EPS: $3.35 (5.7% growth), with $625M free cash flow YTD. FY25 guidance updated to $21.8B-$21.9B revenue (3%-3.5% organic growth) and $14.06-$14.34 EPS (8% growth midpoint), reflecting $90M tariff impact.
- Strong cash generation and $1B share buyback commitment ($750M executed YTD). Gross margin momentum expected to continue, offsetting revenue headwinds.

**【Q&A Key Highlights】**
- **Tariffs & Mitigation**: $90M FY25 tariff expense, with $2.5B U.S. manufacturing investment to reduce long-term exposure. Short-term actions include inventory positioning and dual-sourcing (e.g., vacutainer production shift to Europe).
- **Organic Growth Drivers**: Q3 organic growth ~3%, Q4 ~5% driven by APM anniversary, Pharma Systems (GLP-1), PureWick, and BDI launches (Phasix ST Umbilical).
- **Separation Progress**: Biosciences/Diagnostics separation on track, with increased investor interest. Launch of FACSDiscover A8 and Phasix umbilical in Q2.
- **AI & Efficiency**: AI used in back-office processes (expense reviews) and manufacturing (OEE optimization). BD Excellence reducing mundane tasks, freeing up time for strategic initiatives.

Becton, Dickinson and (BDX)-1 May 25-2025 Q2 Earnings call transcript

- **Q1 Strong Execution**: 9.6% revenue growth, 28% EPS beat, $1B+ shareholder returns.
- **Separation Strategy**: New BD as MedTech leader; BDB to focus on Life Sciences with 30% EBITDA margins.
- **Margin Expansion**: 370bps gross margin improvement; FY25 EPS guidance raised to $14.45 midpoint.
- **Risks & Opportunities**: China research funding delays, FX headwinds, APM integration acceleration.


**【CEO Opening Remarks】**
- Q1 FY25 revenue grew 9.6% (3.9% organic), driven by MedTech and strong margin expansion (370bps gross margin, 340bps operating margin). Adjusted EPS rose 28% to $3.43.
- Announced intent to separate Biosciences & Diagnostics Solutions (BDB) into a standalone entity, positioning New BD as a pure-play MedTech leader.
- Returned $1B to shareholders via $300M dividends and $750M accelerated share buyback.
- Raised FY25 adjusted EPS guidance midpoint to $14.45, reflecting Q1 outperformance and margin strength.

**【CFO Financial Details】**
- Q1 GAAP net income: $420M; Non-GAAP EPS: $3.43 (vs. $2.68 prior year).
- Free cash flow: $600M, supporting $1B+ shareholder returns.
- FY25 guidance: Total revenue $21.7B-$21.9B (10% FX headwind); EPS $14.30-$14.60.
- Margin expansion to continue via BD Excellence, with 250bps+ gross margin improvement since FY23.

**【Business Separation Strategy】**
- New BD will focus on MedTech ($17.8B revenue, 90%+ recurring), with four segments: Medical Essentials, Connected Care, BioPharma Systems, and Interventional.
- Separated BDB will target Life Sciences Tools & Diagnostics ($22B+ market), with 80%+ recurring revenue and 30% EBITDA margins.
- Transaction expected to close in FY26; exploring RMT, spin-off, or sale structures.

**【Q&A Highlights】**
- **China & FX Risks**: Biosciences facing research funding delays; FY25 FX headwind $250M vs. prior $50M.
- **Tariff Impact**: 10% China tariffs in effect; monitoring potential 25% Mexico/Canada tariffs.
- **APM Integration**: Critical Care acquisition growing high-single digits, R&D integration with Infusion Systems underway.
- **BDB Pipeline**: FACSDiscover A8 analyzer on track for H2 launch; HPV assay sales momentum strong post-CDC guidelines.


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