Danaher Corporation (DHR) delivered solid top-line growth in Q2 2025, with sales rising 3.5% year-over-year to $5.94 billion, supported by modest core revenue growth of 1.5% and a 2.0% currency tailwind. For the first half of the year, sales reached $11.68 billion, up 1.0% compared to 2024. While top-line momentum was evident, profitability came under pressure, primarily due to a significant impairment in the Life Sciences segment. Net earnings fell to $555 million (or $0.77 per share), down sharply from $907 million ($1.22 per share) a year earlier. However, adjusted EPS climbed 4.7% to $1.80, reflecting strong cost control and core operational performance outside of impairment effects.

Segment performance was led by Biotechnology, which posted 8.0% sales growth and a 6.0% increase in core revenue, fueled by continued strength in bioprocessing consumables and improving equipment demand. The segment achieved an operating profit of $531 million and an expanded margin of 28.7%, up from 27.0% last year. Diagnostics saw modest 2.0% growth in both reported and core sales, generating $554 million in profit with resilient margins at 24.0%, despite pressures from China's volume-based procurement policies.

Conversely, Life Sciences was the weak link, with flat reported growth and a 2.5% decline in core revenue. The segment swung to an operating loss of $239 million, driven largely by a $432 million impairment charge. Excluding the one-time hit, margins were affected by softer demand from academic and government sectors, as well as lingering inventory overhangs at Aldevron. Management expects this segment to stabilize in the second half as comps ease and customer inventory levels normalize.

Despite the decline in operating profit to $760 million (a 12.8% margin, down from 20.3%), operating cash flow remained strong at $1.3 billion, and free cash flow reached $1.1 billion, reinforcing the company’s ability to fund strategic investments. Danaher also reported a healthy cash position of $2.96 billion, although long-term debt rose to $16.85 billion, reflecting its readiness to pursue M&A opportunities as valuations become more favorable.

Looking ahead, management maintained its core revenue growth outlook at ~3% for the full year and raised its adjusted EPS guidance to $7.70–$7.80, citing execution strength, disciplined cost actions (with $150 million in savings targeted for 2025), and a resilient business model built on over 80% recurring revenue. Tariff headwinds, projected at $350 million, are expected to be mitigated through supply chain shifts and pricing strategies.

In summary, Danaher is navigating a complex macro backdrop with discipline and strategic clarity. Strength in Biotechnology and stability in Diagnostics are offsetting near-term weakness in Life Sciences, setting the stage for a more balanced performance in the second half of the year.