Good day, and welcome to the Bruker Corporation Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Joe Kostka, Director of Bruker Investor Relations. Please go ahead.

Good morning. I would like to welcome everyone to Bruker Corporation's Third Quarter 2025 Earnings Conference Call. My name is Joe Kostka, and I am the Director of Bruker Investor Relations. Joining me on today's call are our President and CEO, Frank Laukien; and our EVP and CFO, Gerald Herman. In addition to the earnings release we issued earlier today, during today's conference call, we will be referencing a slide presentation that can be downloaded from the Events and Presentations section of Bruker's Investor Relations website. During today's call, we will be highlighting non-GAAP financial information. Reconciliations of our non-GAAP to GAAP financial measures are included in our earnings release and are posted on our website at ir.bruker.com. Before we begin, I would like to reference Bruker's safe harbor statement, which is shown on Slide 2 of the presentation. During this conference call, we will make forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to acquisitions, geopolitical risks, tariffs, foreign currency, market demand or supply chains. The company's actual results may differ materially from such statements. Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K for the period ending December 31, 2024, as updated by our other SEC filings, which are available on our website and on the SEC's website. Also, please note that the following information is based on current business conditions and on our outlook as of today, November 3, 2025. We do not intend to update our forward-looking statements based on new information, future events or for other reasons, except as may be required by law, prior to the release of our fourth quarter and full year 2025 financial results expected in February 2026. You should not rely on these forward-looking statements as necessarily representing our views or outlook as of any date after today. We will begin today's call with Frank providing an overview of our business progress. Gerald will then cover the financials for the third quarter of 2025 in more detail and share our updated full year 2025 financial outlook. Now I'd like to turn the call over to Bruker's CEO, Frank Laukien.

Thank you, Joe. Good morning, everyone, and thank you for joining us on today's third quarter 2025 earnings call. As forecasted, our third quarter revenues and earnings were down year-over-year, primarily due to weaker academic and research instruments demand in the first half of 2025. However, our Q3 '25 performance was quite a bit better than expected and represents a meaningful sequential step-up from our Q2 performance. In this third quarter, we were encouraged by our mid-single-digit percentage organic bookings growth. For the first time this year, we saw strength in bookings in the academic government market segment as well as improving biopharma and applied market orders. Interestingly, in Q3 of '25, we saw the stark contrast of a double-digit percentage organic revenue decline in the ACA/GOV markets year-over-year compared to a double-digit percentage organic improvement in ACA/GOV bookings year-over-year. In fact, our ACA/GOV orders grew in the high teens percentage in Q3 '25 as very robust order growth outside of the United States more than offset a continued year-over-year softness in the U.S., a lot of moving pieces. Anyway, notably, our innovative spatial biology, proteomics and multiomics solutions launched at AGBT, AACR and ASMS earlier this year are being very well received by our biopharma and academic customers and enhance our leadership in enabling tools for drug discovery and disease biology research in the post-genomic era. Biopharma and applied also saw organic bookings growth in Q3 with biopharma having the strongest organic order growth of all of our end markets, both in Q3 and year-to-date. Organic scientific instruments orders in China increased by double-digit percentage in the third quarter year-over-year, and we saw what may be green shoots of stimulus funding in China beginning to be dispersed. So this stronger Q3 '25 order performance drove our Scientific Instruments segment…

Thank you, Frank, and thank you, everyone, for joining us today. I'm pleased to provide some more detail on Bruker's third quarter and year-to-date 2025 financial performance, starting on Slide 11. In the third quarter of 2025, our results came in above our expectations on both the top and bottom lines. In the third quarter of '25, Bruker's reported revenue decreased 0.5% to $860.5 million, which reflects an organic revenue decrease of 4.5% year-over-year. Acquisitions contributed 1.1% to our top line, while foreign exchange was a 2.9% tailwind. Geographically and on a year-over-year organic basis, in the third quarter of '25, our Americas revenue declined in the low single-digit percentage. European revenue was roughly flat, while Asia Pacific revenue declined in the mid-single-digit percentage, including flat performance in China. For our EMEA region, revenue declined by over 20%. Scientific Instruments organic revenue group segment declined 5.4% in the third quarter of '25 as mid-single-digit organic growth in CALID was more than offset by a double-digit organic decline in BioSpin and a high single-digit organic decline in Bruker Nano. BSI systems revenue declined roughly 10%, while BSI aftermarket revenue increased mid-single-digit percentage organically year-over-year. As Frank mentioned earlier, our order bookings performance in the BSI segment was up organically in the mid-single-digit percentage year-over-year, and our BSI book-to-bill ratio for the third quarter was above 1.0. Non-GAAP gross margin decreased 110 basis points to 50.1%. Q3 2025 non-GAAP operating margin was 12.3%, impacted by tariffs, foreign exchange and the headwind from the prior year comparison of 2 GigaHertz class NMRs in our third quarter '24 revenue. On a non-GAAP basis, Q3 '25 diluted EPS was $0.45, down 25% from the $0.60 we posted in the third quarter of '24, but improved sequentially and well ahead of our expectations. Our EPS in…

Thanks, Gerald. We will now begin the Q&A portion of the call. [Operator Instructions] Operator?

[Operator Instructions] Our first question comes from Puneet Souda with Leerink Partners.

First one on the book-to-bill, good to see more than 1, and congrats on the quarter, just given the order momentum you're seeing here. But just wondering how has that trended in the fourth quarter? Are you continuing to see the mid-teens organic order growth here? And maybe could you elaborate a bit just a number of moving parts here. How is the international momentum continued? Is it more ACA/GOV versus pharma? And maybe tell us a bit more on the academic side of the U.S. Are you starting to see some recovery there given the points you mentioned, DNP and a couple of other points you mentioned in the slide.

Yes. Thank you very much, Puneet. So we really don't have Q4 data yet. It's too early. So I just can't comment on Q4. There's no meaningful data available yet. Moving parts, ACA/GOV, the strength in ACA/GOV orders was primarily outside of the United States. but the United States were less weak, all right, less soft, is that a word. Anyway. So Q3 was better in the United States for ACA/GOV orders than Q2, and we saw some orders come through. I gave you some NMR examples. But of course, it was more -- it was broader than that, also included TIMS stuff and microscopes and other stuff. They're hard to say what's the trend in the U.S. because there clearly in the U.S., there was a little bit of catch-up in Q3 compared to Q2 and maybe even Q1 in ACA/GOV orders in Europe and Japan and a little bit in China also. That's why there might be green shoots were quite encouraging, and that's why our ACA/GOV orders year-over-year were up considerably in Q3. Don't think that we're now in a high teens growth trend all of a sudden. That's just a quarter and Q3 '24 was not the strongest. But anyway, it was very encouraging. And we hope that will continue in Q4, but I wouldn't -- and yes, the activity and opportunities are great and are encouraging, but I wouldn't read anything into that yet. Just too early to comment on Q4. We do need Q4 to then give more meaningful growth and margin numbers for 2026. We're not going to do that today. We're not able to do that today until we really see how Q4 comes in, particularly the orders, obviously. To the other moving pieces, Puneet, yes, biopharma has been reasonable in -- or okay, not great, but okay in the first half of the year, much better in the third half of the year in terms of orders, a particular strength there in the U.S., but also outside of the U.S., but ACA/GOV -- sorry, biopharma, particularly in the U.S. And the applied market strength, which is a good sign of macroeconomic trends, that was pretty -- that had a pretty broad international distribution. I don't know that I would highlight any geography there. So that may add some color to the admittedly multiple moving pieces and the effect of Bruker that prior order weakness now shows up in the P&L, whereas the new order improvements and encouragement and maybe this momentum if Q4 goes well, is more likely to -- will show up all in 2026. I hope that helps.

Got it. That's very helpful. And anything on the ultra-high frequency GigaHertz NMRs, how are you thinking about those? Obviously, the tougher comp in the third quarter. But as you go into '26, how is the momentum there? I know we've been waiting for U.S. to acquire more of those instruments.

Yes, the U.S. is the enigma there. But obviously, there's also other geographies. And I still can't call the U.S. trends. Obviously, nothing has come through so far. So we'll see. We're expecting at least one order for the GigaHertz class in Q4, not in the U.S. And there's a number of cases brewing around the world and including in the U.S. But today, it's too early to do that. So when we gave guidance for '26 in presumably in early February of '26, we can also comment on what has come in or where we have clear line of sight for ultra-high field for the GigaHertz class. So yes, nothing in revenue in Q3. We expect hopefully one order in Q4. Sometimes these things get delayed by a quarter. Anyway, it's just not such a big part of our business anymore. I know they're easier to count. And indeed, in Q3, a lot of our organic decline had to do with these 2 GigaHertz class systems in Q3 '24 revenue, which accounted for more than EUR 25 million of our revenue and comes with nice operating profits and margins. So it did have an effect on Q3. And anyway, that's the color I can give you. More to come when we give guidance in early February.

And the next question comes from Michael Ryskin with Bank of America.

This is Avantika on for Mike. Could you give us the impact of the government shutdown that you're seeing in 4Q? And is that baked into the updated outlook?

Well, that's a good question, and it's not formally baked into our outlook. So far, we have assumed that the effect will be relatively minor. But indeed, if this were to continue for a full second month or so, then this may delay some new grants, some orders. It could also delay some installations. So far, we haven't become aware of anything that gets -- we think that our Q4 guidance is now appropriately conservative to absorb some of that and maybe what we've seen so far, but know if there was a further multi-week or multi-month shutdown that could have additional impacts that are not presently in our guidance.

Understood. And then I know that you're not formally guiding on 2026 today, but you called out meaningful improvement versus the minus 4% to 5% organic in '25. Is it fair to assume that you can grow revenues in 2026? Or are we looking at flat year-over-year?

We're not making that assumption yet. It's a fair question, of course. We really do want to see our Q4 '25 bookings in order then to give hopefully reliable guidance in February of '26. So yes, I mean, this year, '25, we're coming down organically quite a bit, right? We undoubtedly can do much better than that next year, but we're not presently -- I don't want to state any assumptions because then you will take them as guidance and they're not. But we just want to make sure that with the significant cost cutting that we're doing, even without growth, which isn't our assumption, but even without growth, we can expand our operating profit margins very significantly, say, 250 to 300 bps or something like that. And yes, we expect -- we continue to expect double-digit EPS growth even after absorbing the roughly $0.20 dilution that Gerald mentioned during his prepared remarks for the additional dilution from the mandatory convert that we did in September. So we still expect to do double-digit non-GAAP EPS growth next year. And that's without -- that's simply for mathematically, that's simply we're not -- this is without growth. Without growth is not our preliminary guidance period. But that's what we're looking at right now. We can -- preliminary guidance for us right now on growth does not make sense until we've seen our Q4 orders for Bruker. That's going to be very important for next year.

And the next question comes from Tycho Peterson with Jefferies.

Frank, I want to pick up on that margin point. So it sounds like you are committing to the 300 basis points of margin expansion even if the top line is flat. I guess, given that you're running at the high end of the $100 million to $120 million cost savings target in the near term, should we interpret the upper end of savings is simply kind of increasing confidence in hitting that margin target next year? Or could you think you could potentially do better?

Okay. So nice question, Tycho. I wasn't confirming a number. I know you've mentioned one. I'm not saying take that number out of your model, but I'm not confirming it either. We are -- I think the second part of your question, I think it's fair to say we hope to have increased confidence in getting to very significant margin expansion and double-digit EPS growth all in, including the MCP, and that's exactly why we're driving towards the high end of our cost-cutting target. So you're spot on with that one.

Okay. And then just probing a little bit on your assumptions. We're not talking numbers for '26, but just ANG, the outlook there, assuming flattish NIH budget. I mean, just talk a little bit about some of the gives and takes around multiyear grants. I assume you're not expecting any budget flush here in the near term. But then as we think about next year, do you think ANG orders will grow? And then can you flesh out your comments on China stimulus? How material was that? And how do you think about that for next year?

Yes. These are all very important questions, right? So there was a little bit of a budget flush for the fiscal year '25 and orders -- sorry, and funding coming out of NIH, you all report that very well, did improve in the third quarter and particularly in September. I'm aware of a cancer center that had fantastic NIH funding and cash coming in the door to where they even were flat or higher than the previous year. So there was a mini budget flush. It went into a lot of multiyear grants. It went into things that they could fund readily. It went into a few instruments, too. We sold some NMRs and some TIMS stuff and some other stuff. It wasn't very strong yet, which is why the strength in academic bookings for us in Q3 came from outside the U.S., but the U.S. did improve a little bit sequentially. It just wasn't a growth driver yet year-over-year. So that was that. NIH budget for '26 and NSF budget, while we're at it, we are not necessarily assuming that it's flat. We'd be delighted that it's flat. If we have to take 10% or 15% down, I think that will work for us, too. I just want to be -- it's hard to predict these things. So we're not necessarily baking in an NIH budget flat. Again, delighted if it happens, but we can also work with it being down 10% or 15%. As you know, it's then actually more important whether the stuff actually gets dispersed regularly or gets held up for the majority of the year. But we are -- along with Q4 bookings, we're also looking forward to clarity on NIH and NSF and DOE budgets for research for fiscal year '26. Hopefully, that all comes in, in calendar Q4 to give us more visibility. China, yes, some green shoots, yes. So they were less than $10 million in -- clearly -- well, in orders anyway, but in clearly, it seemingly stimulus-related orders where customers said, yes, this is stimulus money being released. So less than $10 million, not -- and again, I think that's a green shoot, and we'll need to again see how that continues in Q4. But I think in Q2, there was none of that. So it's a little bit better, right? So China contributed, but Japan and quite honestly, Europe were really strong in ACA/GOV orders in Q3. So that's the color around the world.

Okay. And then lastly, you just mentioned an order pushout. Can you quantify how large that was in the one you mentioned in your prepared comments?

You mean revenue pushout? Yes, there's a few sites that have -- that want delivery in Q1 rather than in Q4. So that also added to some of the more conservative guidance that we now have for the full year, but really implied for Q4 because that's all that's left. And I think I mentioned a lot -- it is true that -- I mean, it's always true that we get more than half the orders in a quarter and the third month of every quarter. But yes, a lot of the orders in the order improvement really became clear in September. So if all of these orders had come in, in July, maybe some of them would have made it into Q4. But now there -- I mean, there's some small stuff will go into Q4 and always does, but most of the large orders go into next year. most of the larger orders that came in, in September will be revenue in next year, I should be precise.

The next question comes from Luke Sergott with Barclays.

I just want to talk on China. You're coming in flat here, things kind of improved sequentially. Just talk about what you're seeing there more broadly. pull forward, you talked a little bit about the stimulus, the matter drove key questions. But how are you guys thinking about 4Q and the exit rate? And ultimately, are we kind of seeing some type of stabilization here? Or is this just kind of like a one-off?

Well, good questions. I wouldn't read too much into -- starting backwards, Luke, I wouldn't read too much into the Q4 '25 exit rate. That's just Q3 and Q4 are relatively weak on the P&L is pretty much the result of weak orders. And yes, and some new currency and tariff challenges early in the year. We can work our way through those and offset them and more than offset them by next year, but only partially this year. So I wouldn't -- I would hesitate to take any given quarter this year as modeling something for next year. On China, yes, China was a little bit better, right, sequentially, not only in academic, not only some of the less than $10 million, I think it was closer to $6 million or something like that in stimulus green shoots. China felt a little better in Q3 perhaps all around than in Q2 when they were probably staring down a trade war barrel and maybe now maybe that gets -- that seems to have -- even before the meeting that just happened recently that maybe the whole world is getting a little bit more optimistic that, well, we know the new tariff set up and there are not likely to be major trade wars, but hard to say, right? So China was a little better in Q3 than in Q2.

All right. And then turning to the spatial and the demand that you guys are seeing there, can you talk a little bit about the cadence for the instruments versus the consumables? And then the push here and ability to use your existing scale as this kind of hits the core to push further with academic government customers or deeper into pharma?

Yes. Good question. Yes, spatial biology was right, slightly better orders or somewhat better orders in Q3, including international, I believe, as well. That's both consumables and instruments. Remember, some of the new workflows like the whole transcriptome on the CosMx, of course, also will run on existing systems. They may need some upgrades, but you don't always need a new system for that. But I think there was also strength in CosMx and CellScape orders. PainScape is still very new. So a lot of that is sort of -- will take a little while and have a number of labs that are going to have placements of the PainScape, do this new spatial genomics and look at dysfunction in cancer and infectious disease before that turns into papers, before that turns into revenue. That's super interesting, but it's not going to be a big contributor yet, whereas CosMx and CellScape are doing well, also including some of the consumables. So yes, spatial biology is doing better. Of course, we could use more U.S. academic funding. It was quite dependent well, 2/3 of that is academic government and 1/3 is biopharma. And -- so that strengthening in biopharma also is good for spatial biology. And as you know, that so far in the U.S., that's stronger than the ACA/GOV growth.

And the next question comes from Subbu Nambi with Guggenheim.

Frank, some of the niche end markets in 2026, like diagnostics and maybe semis, what do those look like next year? Can ELITech be a low double-digit grower in your mind?

Yes. I mean diagnostics is very important for us, right? It's well above $500 million. They both are -- they've done well in '25, both the clinical microbiology and the molecular diagnostics that are both in that infectious disease division. MALDI Biotyper good growth, very good growth in consumables and software and so on. Now in that business, I think it's 60% aftermarket, which is service consumables, but also database subscriptions. So very healthy there. The diagnostics business, the ELITech business primarily is a delight this year. It's growing nicely. It's expanding its, this year, 25%. So it's growing its margins. It's growing, which is nice this year. It's actually -- I don't know the exact growth rate. It's growing somewhere in the single digits, maybe even high single digits, which is lovely. Its placements have really outperformed significantly. I know you can't take placements to the bank, but next year, you will be. So they had a lot of placements of their InGenius and BeGenius stations. The commercial synergies with Bruker are really working, and they're getting into countries and into labs they previously couldn't get. So I think their placements are something like 20% or more ahead of their business plan, which isn't revenue this year. And when these things systems are placement under reagent rentals, then it takes 6 months until you really have the revenue ramp. But hopefully, then you have 5 to 7 years of really solid revenue and consumables pull-through. So that's going really well. Semi is, you have to look at it on an annual basis. I think we had -- this year, we'll have 2 quarters of fantastic orders and 2 quarters of not so fantastic orders. Over the year, it's all right. I think it's flattish this year. I don't think there's anything structural there. And revenue-wise, it's been a little weaker, and we expect that to improve next year. So semi one really has to look at on an annual level, and it's a very nice margin contributor. Semi now all is approaching or is around $300 million in annual revenue. So it's also pretty meaningful for us and has very -- along with the diagnostics business has some of the best incremental margins. So those are very core to us. These are not niches for us, even though we love the post-genomic era, both of those are just really important core businesses.

Just a follow-up. Can you unpack where you saw orders incrementally positive from a product perspective? Is it the lower-priced equipment? And then how have consumables being impacted? Any color you could share there?

So for diagnostics, for molecular diagnostics and the ELITech, remember, they're primarily active in Europe, in selected countries in Asia, like not in China, for instance, in parts of Africa, parts of Latin America. And the strength there has been particularly in Europe, the placement strength that I mentioned.

No, I mean the overall business.

Can you repeat the question, Subbu, I'm sorry. What was -- I thought you were referring to diagnostics, but...

Sorry, backing up. In general, the order strength that you saw this quarter, where did you see the strength coming from, from a product perspective, either diagnostics or outside of diagnostics?

I think -- Subbu, it's Gerald. I'd say the orders strength in the third quarter was coming from larger ASP-based instruments. We did have some volume, particularly coming out of our optics and AXS businesses, which tend to have lower ASPs, but I'd say the bulk of the performance in the orders was particularly coming out of the European markets as well, just to clarify that. I mean we saw considerable strength in the European markets, both in the ACA/GOV side, particularly.

So I think I can answer it now. Sorry, it took me a second. The strength in orders in Q3 of '25 had very little to do with diagnostics. Diagnostics is just coming along and it's fine. But the more discrete items were strength in ACA/GOV outside of the U.S., biopharma and applied.

That's right.

And so that is -- none of those include diagnostics.

And the next question comes from Casey Woodring with JPMorgan.

On orders, historically, orders improved sequentially in 4Q in your business, but you've talked here today about some catch-up in academic and government in 3Q. So can you just maybe walk through what the range of outcomes looks like in 4Q from an order exit rate perspective? How safe is it to assume orders step up sequentially? Or are there scenarios wherein orders could be flat to down in 4Q? Then I have a follow-up.

Sure, Casey. Okay. So the -- in ACA/GOV, where we observed a little bit of catch-up was in the U.S. I don't think there wasn't any hold back -- well, actually in the U.S. and in China, a little bit. In the rest of the world, I think that catch up. I'm not aware of that. But China and the U.S. on ACA/GOV have been holding back, and that's why Q2 orders, for instance, in both of those geographies were weak. So to your second part of your question, Q4 is always strong. So there's -- the question for Q4 will not be, will it be up sequentially over Q3. That's pretty much a given. But whether -- what the trend will be year-over-year compared to Q4 of last year.

Got it.

I hope that helps.

Yes, no, that definitely helps. And then my second one, just quickly on backlog. I think last quarter, you noted you had 6.5 months, and you talked about that going down to 5 months in a normalized environment. Maybe just walk through kind of how you're seeing that play out over the course of '26.

Well, what I can -- this is Gerald. What I can comment on is that we currently have about 7 months of backlog through the third quarter of 2025, which is actually up now from the 6.5 months we quoted at the end of the second quarter. I mean, I guess, to a large extent, it really depends on our '26 performance is really going to depend on how we -- how it looks like for the fourth quarter in terms of revenue performance. Based on our guide, it looks like we will still carry considerable backlog into the 2026 period.

And the next question comes from Brandon Couillard with Wells Fargo.

Just a couple of housekeeping items. Can you give us an updated interest expense number for the year? What's the run rate for the fourth quarter? And is that a good figure to assume for '26? And is the impact of the share count from the MCP offering about 13 million shares?

Yes. To answer your last question first, the answer is yes, roughly, and then on the first part, we'll go through, Brandon, a little more modeling on the interest because it gets a little complicated, partly because we -- you may know we had some gains, some foreign exchange gains that get covered in that line as well. So somewhere in that range that you're quoting on interest is correct, but we'll talk more about that in our modeling discussions.

And the next question comes from Josh Waldman with Cleveland Research.

Two for you. First, I wondered if you could talk a bit more about what you're seeing in Europe. Was it primarily ACA/GOV accounts that improved there? Or did you also see pharma and applied accounts improve as well? And then I guess, at this point, what's your confidence level on the sustainability and strong orders? I mean, were there any one-off funding programs or anything like that, that released in the third quarter that leave you, I guess, nervous about the durability of stronger orders there?

Yes. I guess I'd say, generally speaking, Europe was stronger. We did see strength in both ACA/GOV as well as applied and biopharma. So those are good signs, and I don't think there were specific one-offs related to those trends. So I think we're more confident, but I would say we need to see -- as Frank has repeated a couple of times here, we need to see the fourth quarter order performance in order to confirm that specifically. But all of those markets, in particular, on the ACA/GOV side, European were not being driven by one-off improvements or orders.

Got it. Okay. And then a follow-up. I wondered if you could provide more color on what you're seeing out of pharma. I mean it sounds like you saw a sequential improvement in bookings. I forget if you commented what orders look like year-over-year. And does it seem like accounts are trying to push orders through by year-end? Or does this seem like maybe a change in how they're viewing medium-term investment in research tools?

Good questions. Josh, this is Frank. not aware of any particular drive to get orders in placed in before the end of the calendar year. So I would take this as biopharma having invested less now for -- so there was a kind of a COVID or post -- immediate post-COVID boom. Well, then there was a hangover, right, this was -- and then some concerns about most favored nations pricing and how much CapEx did they need to move things in production to the U.S. and many of them have now committed to do that over, it doesn't happen overnight. So maybe that has cleared the decks a little bit to where they are investing in tools that will make drug discovery more efficient and give them better insights. And those tools, that's exactly what we provide. Yes, you need sequencers, but you need a hell of a lot more than that to really have deeper disease biology and then drug target, drug mechanism of action insights so that hopefully, the still very poor yield and enormous expense and length of bringing a successful drug to market will improve, and that requires -- they are the biggest integrated fans of this hypothesis or thesis or facts. I would say that we are in the post-genomic era, and we need to understand the disease biology and the drug mechanisms a lot better to get better -- to get less attrition and more yield and better drug discovery. So they completely agree with that. They may not use the same terminology, but that's how they're investing.

And I would just add that the third quarter performance on revenue was good, okay? And the order performance from biopharma across the globe was strong in the third quarter from an order perspective.

And the next question comes from Doug Schenkel with Wolfe Research.

Gerald, how do we balance what you've talked about in terms of on the cost savings initiatives? And like you sound as good as ever on those. You've exhibited some confidence about what you can do in 2026 from a margin expansion standpoint, seemingly in any growth environment. I mean at one point, I think last quarter, you talked about getting 300 basis points of margin expansion next year even in a flat growth environment. On the other hand, I think you increased your assumption for organic operating margin headwinds by 45 basis points for the year, which is pretty material with one quarter to go. So I'm just trying to figure out like how do we balance these things? And is there some risk that the benefits that you expect to occur over time are going to take a little bit longer to show up in the P&L just because of maybe the environment we're in and the fact that I think a lot of these changes that you're making are being done outside the U.S. where regulations can work against you. Again, I'm just trying to think about this as we try to set you guys up to succeed with realistic targets for 2026.

Yes. Sure. Nice to hear from you, Doug. So here's what I'd say. First, our cost-saving initiatives will be, and we expect them to be at the high end of the range we quoted this $100 million to $120 million for fiscal year 2026. And we're fully committed to that. And actually, we're well on track with that. 95% of the actions that needed to be taken to realize that are already underway or have been fully implemented. So very confident with respect to that. And I think more generally, our expectation around margin expansion of closer to $300 million is where we are even under relatively weaker revenue conditions for '26. That's the position we've taken, and I think we're holding to that. I think the issue for us, as you already know, I think, Doug, is some of these activities around cost savings do take a bit of time just because we have to go through a process, particularly in Europe and a lot of our cost-saving actions are driven around Europe because of our footprint. So there's going to be a likely delay in some of this as we're going to see more of it hitting in the second quarter of 2026 as opposed to in the first. So -- but that doesn't take us off the target.

And let me also -- I mean -- so we did get -- Europe, there are other economic problems and layoffs by other companies. So we got very good cooperation, for instance, in Germany and France, which can be difficult from our workers' councils and committed enterprise ,they've agreed, they've approved that what we're doing is reasonable and protects the core and all of that. So good cooperation. When Gerald said that, yes, Q1 will have -- so the $120 million for the year, we're very committed to that. And Q1 will have, I don't know, 90% or 95% of the run rate cost savings implemented. A few things, just the way they're timed will come in, in Q2, but it's not going to be a big modeling difference, Doug, or anybody else. But yes, that's how it flows. And the $120 million is not some sort of a Q4 run rate. That's for the full year.

Exactly -- and just to your earlier part of your question, I mean, we did have -- with respect to the fourth quarter of '25, we do have some mix challenges in the fourth quarter for '25 that we didn't see in the previous year as well. So I think you're going to see some -- you did see a change in the overall guide from an organic operating margin impact with respect to the fourth quarter. So that's the explanation for that, Doug.

This concludes our question-and-answer session. I would like to turn the conference back over to Joe Kostka for any closing remarks.

Thank you for joining us today. Bruker's leadership team looks forward to meeting with you at an event or speaking with you directly during the fourth quarter. Feel free to reach out to me to arrange any follow-up. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.