THERMO FISHER SCIENTIFIC INC. (TMO)

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, and are often identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” or similar expressions or words with similar meanings. Any statements contained herein that are not statements of historical fact should be considered forward-looking statements.

Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations include, among others, statements regarding:

•financial expectations, including projections of revenues, expenses, margins, earnings, cash flows, liquidity, capital allocation plans, and tax matters;

•operational matters, including business strategies, productivity initiatives, restructuring activities, cost-reduction programs, and new product or service developments;

•market and competitive conditions, including customer demand trends, industry dynamics, pricing, and competitive positioning;

•strategic actions, including planned acquisitions, divestitures, investments, and partnerships;

•legal, regulatory, macroeconomic, geopolitical, public health, supply chain, technology, and cybersecurity developments and their potential impacts on the company; and

•the timing and outcomes of any of the foregoing.

Each forward-looking statement contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is inherently uncertain and involves significant risks, assumptions, and factors that could cause actual results to differ materially from those expressed or implied. Important risks and uncertainties that could cause such differences are detailed under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025, which is on file with the Securities and Exchange Commission (SEC).

Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations speak only as of the dates on which they are made. While the company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, in the event of new information, future developments, or otherwise, except as required by law.

The company refers to various amounts or measures not prepared in accordance with generally accepted accounting principles (non-GAAP measures). These non-GAAP measures are further described and reconciled to their most directly comparable amount or measure under the section “Non-GAAP Measures” later in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Certain amounts and percentages reported within this Quarterly Report on Form 10-Q are presented and calculated based on underlying unrounded amounts. As a result, the sum of components may not equal corresponding totals due to rounding.

Overview

Thermo Fisher Scientific Inc. enables customers to make the world healthier, cleaner and safer by helping them accelerate life sciences research, solve complex analytical challenges, increase laboratory productivity, and improve patient health through diagnostics and the development and manufacture of life-changing therapies. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics. The company’s operations fall into four segments (Note 11): Life Sciences Solutions; Analytical Instruments; Specialty Diagnostics; and Laboratory Products and Biopharma Services.

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Consolidated Results

Organic Revenue Growth

During the second quarter of 2026, customer activity continued to strengthen across our end markets. Revenue growth was strong in the pharma and biotech market, with performance driven by strengthening underlying market conditions. Revenues in the academic and government market grew, and growth in the industrial and applied market was strong, both driven by customer demand for our innovative high-end instruments. Revenue to customers in the diagnostics and healthcare market was also strong. During the second quarter of 2026, sales increased across all major geographies. Revenue growth was strong in Europe and Asia-Pacific, including China. Contributions to organic revenue during the second quarter of 2026 were led by the Laboratory Products and Biopharma Services segment and the Analytical Instruments segment.

During the first six months of 2026, revenue growth in the pharma and biotech market was strong, with performance driven by strengthening underlying market conditions. Revenues to customers in the industrial and applied market increased, driven by customer demand for our innovative high-end instruments. Revenues in the academic and government as well as the diagnostics and healthcare market were flat. During the first six months of 2026, sales grew in North America and Asia-Pacific, including China. Revenue growth in Europe was strong. Contributions to organic revenue during the first six months of 2026 were led by the Laboratory Products and Biopharma Services segment.

The company continues to execute its proven growth strategy which consists of three pillars:

•High-impact innovation;

•Our trusted partner status with customers; and

•Our unparalleled commercial engine.

GAAP operating income margin and adjusted operating income margin increased in the second quarter of 2026 due primarily to strong productivity improvements, offset in part by unfavorable business mix.

GAAP operating income margin and adjusted operating income margin increased in the first six months of 2026 due primarily to very strong productivity improvements, offset in part by unfavorable business mix and strategic investments.

The company’s references to strategic investments generally refer to targeted spending for enhancing commercial capabilities, including expansion of geographic sales reach and e-commerce platforms, marketing initiatives, expanded service and operational infrastructure, research and development projects and other expenditures to enhance the customer experience, as well as incentive compensation and recognition for employees. The company’s references throughout this discussion to productivity improvements generally refer to the impact of its Practical Process Improvement (PPI) Business System to address inflation, drive cost efficiencies and improve profitability. The benefits of PPI include optimized price realization, reduced costs resulting from implementing continuous improvement methodologies, global sourcing initiatives, a lower cost structure following restructuring actions including headcount reductions and consolidation of facilities, and low cost region manufacturing.

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Notable Recent Acquisitions

On March 24, 2026, the company acquired, within the Laboratory Products and Biopharma Services segment, Clario Holdings, Inc., a U.S.-based leading provider of endpoint data solutions for clinical trials. The acquisition expands the segment’s portfolio with the addition of highly complementary clinical research offerings, enabling customers to gain critical insights from clinical data to improve decision-making, accelerate innovation and drive greater productivity.

On September 1, 2025, the company acquired, within the Life Sciences Solutions segment, our filtration and separation business, a leading provider of purification and filtration technologies used in the production of biologics as well as in medical technologies and industrial applications, from Solventum Corporation. The business strengthens the segment’s bioproduction offerings with advanced filtration technologies that improve quality and efficiency across upstream and downstream workflows. In addition, its industrial filtration and membrane solutions will expand our reach into industries including battery, semiconductor and medical device manufacturing.

Segment Results

The company’s management evaluates segment operating performance using operating income before certain charges/credits as defined in Note 11 to the Consolidated Financial Statements of the company’s Annual Report on Form 10-K for 2025. Accordingly, the following segment data are reported on this basis.

Life Sciences Solutions

The increase in organic revenues in the second quarter of 2026 was primarily driven by the bioproduction business. On a reported basis, the bioproduction business grew $196 million, which contributed 8 percentage points of reported growth in the segment, driven by higher demand from pharma and biotech customers, as well as the impact from the 2025 acquisition of the filtration and separation business. The increase in segment income margin resulted primarily from very strong productivity improvements,

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Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Reference is made throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations to Notes to the Consolidated Financial Statements, which begin on page 29 of this report. Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023 is included in Item 7 of the company’s 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The company refers to various amounts or measures not prepared in accordance with generally accepted accounting principles (non-GAAP measures). These non-GAAP measures are further described and reconciled to their most directly comparable amount or measure under the section “Non-GAAP Measures” later in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Amounts and percentages reported within this Annual Report on Form 10-K are presented and calculated based on underlying unrounded amounts. As a result, the sum of components may not equal corresponding totals due to rounding.

Overview

Thermo Fisher Scientific Inc. enables customers to make the world healthier, cleaner and safer by helping them accelerate life sciences research, solve complex analytical challenges, increase laboratory productivity, and improve patient health through diagnostics and the development and manufacture of life-changing therapies. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics. The company’s operations fall into four segments (Note 11): Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Biopharma Services.

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Consolidated Results

Organic Revenue Growth

During 2025, revenues grew in the pharma and biotech market due to increased demand from customers, partially offset by reduced demand for COVID-19 vaccine and therapy related products and services. Revenues in the academic and government market declined, driven by customer hesitancy in a more uncertain environment in the U.S. and macro conditions in China. Revenue to customers in the industrial and applied market grew. Revenues to customers in the diagnostics and healthcare market were flat. During 2025, sales grew in North America, Europe and Asia-Pacific, but declined in China. Contributions to organic revenue during 2025 were led by the Laboratory Products and Biopharma Services and Life Sciences Solutions segments.

The company continues to execute its proven growth strategy which consists of three pillars:

•High-impact innovation;

•Our trusted partner status with customers; and

•Our unparalleled commercial engine.

GAAP operating income margin and adjusted operating income margin increased in 2025 due primarily to very strong productivity improvements, partially offset by unfavorable business mix and strategic investments. GAAP operating income margin in 2025 also benefited from lower amortization expense when compared to 2024; however, this was partially offset by higher transaction-related costs. We estimate that charges for restructuring and related actions incurred for headcount reductions and facility consolidations, which were approximately $0.3 billion in 2025 and $0.3 billion in 2024, will realize annual cost savings of approximately $0.5 billion and $0.2 billion, respectively, primarily due to reduced employee and facility expenses.

The company’s references to strategic investments generally refer to targeted spending for enhancing commercial capabilities, including expansion of geographic sales reach and e-commerce platforms, marketing initiatives, expanded service and operational infrastructure, research and development projects and other expenditures to enhance the customer experience, as well as incentive compensation and recognition for employees. The company’s references throughout this discussion to productivity improvements generally refer to the impact of its Practical Process Improvement (PPI) Business System to address inflation, drive cost efficiencies and improve profitability. The benefits of PPI include optimized price realization, reduced costs resulting from implementing continuous improvement methodologies, global sourcing initiatives, a lower cost structure following restructuring actions including headcount reductions and consolidation of facilities, and low cost region manufacturing.

Notable Recent Acquisitions

On July 10, 2024, the company acquired, within the Life Sciences Solutions segment, Olink Holding AB (publ), a Swedish-based provider of next-generation proteomics solutions. The acquisition enhances the segment’s capabilities in the high-growth proteomics market with the addition of highly differentiated solutions. It also complements the existing life sciences and mass spectrometry offerings, accelerating protein biomarker discovery and providing strong synergy opportunities.

On September 1, 2025, the company acquired, within the Life Sciences Solutions segment, our filtration and separation business, a leading provider of purification and filtration technologies used in the production of biologics as well as in medical technologies and industrial applications, from Solventum Corporation. The business strengthens the segment’s bioproduction offerings with advanced filtration technologies that improve quality and efficiency across upstream and downstream workflows. In addition, its industrial filtration and membrane solutions will expand our reach into industries including battery, semiconductor and medical device manufacturing.

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Segment Results

The company’s management evaluates segment operating performance using operating income before certain charges/credits as defined in Note 11. Accordingly, the following segment data are reported on this basis.

The increase in organic revenues in 2025 was driven by the bioproduction business. On a reported basis, the bioproduction business grew $548 million, driven by higher demand from pharma and biotech customers, as well as the impact from the 2025 acquisition of the filtration and separation business. Genetic sciences grew $82 million, driven by the 2024 acquisition of Olink. The decrease in segment income margin resulted primarily from the impact from acquisitions, unfavorable business mix, and strategic investments, partially offset by very strong productivity improvements.

Organic revenues were flat in 2025 primarily due to growth in the electron microscopy and chromatography and mass spectrometry businesses, largely offset by declines in the chemical analysis business. On a reported basis, the electron microscopy business and chromatography and mass spectrometry business grew $87 million and $83 million, respectively, partially offset by a decline of $78 million in the chemical analysis business. The decrease in segment income margin resulted primarily from the impacts of tariffs and related foreign exchange, strategic investments, and unfavorable business mix, partially offset by strong productivity improvements.

The increase in organic revenues in 2025 was led by growth in the healthcare market channel and the transplant diagnostics business. On a reported basis, the clinical diagnostic business grew $52 million, the immunodiagnostics business grew $48 million, and the transplant diagnostics business grew $37 million, which were the principal drivers of reported revenue growth in the segment. The increase in segment income margin was due to strong productivity improvements.

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The increase in organic revenues in 2025 primarily due to growth in the research and safety market channel and the pharma services business, partially offset by moderation in COVID-19 vaccines and therapies-related activity. On a reported basis, the pharma services business and research and safety market channel grew $457 million and $422 million, respectively. The increase in segment income margin was primarily due to exceptionally strong productivity improvements, partially offset by unfavorable business mix and strategic investments.

Non-operating Items

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