Yahoo Finance Bruker Corp (BRKR) Q1 2024 Earnings Call Transcript Highlights: Navigating Through Acquisitions ...
Reported Revenue: $721.7 million, up 5.3% year-over-year.
Organic Revenue Growth: 1.6%.
Constant Exchange Rate (CER) Revenue Growth: 5.5% year-over-year.
Non-GAAP Operating Margin: 14.0%, down 630 basis points year-over-year.
GAAP Diluted EPS: $0.35, down from $0.52 in Q1 2023.
Non-GAAP Diluted EPS: $0.53, down from $0.64 in Q1 2023.
Free Cash Flow: $0.4 million, reflecting a decrease of approximately $62.1 million over Q1 2023.
Updated Revenue Guidance for FY 2024: $3.29 billion to $3.35 billion, representing growth of 11% to 13% compared to 2023.
Non-GAAP EPS Guidance for FY 2024: $2.79 to $2.84, translating to growth of 8% to 10% compared to 2023.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Bruker Corp (NASDAQ:BRKR) successfully closed the ELITech acquisition ahead of schedule, enhancing its portfolio and raising its fiscal year 2024 revenue growth guidance by 400 basis points to 12-14%.
Reported a 5.3% year-over-year increase in Q1 2024 revenues to $721.7 million, with acquisitions contributing 3.8% to the top line.
Maintained solid backlog coverage of about 7.5 months, supporting consistent future revenue generation.
Introduced new scientific capabilities and products, such as ultrafast spinning probes and dynamic nuclear polarization for NMR, which can significantly enhance research capabilities.
Completed strategic acquisitions like Chemspeed and ELITech, and pending NanoString acquisition, aimed at strengthening Bruker's position in high-growth markets and expected to contribute to long-term profitable growth.
Negative Points
Experienced a revenue slippage of approximately $15 million into Q2 2024, impacting Q1 revenue figures.
Reported a decrease in Q1 2024 non-GAAP operating margin by 630 basis points year-over-year, primarily due to acquisition costs and less favorable product mix.
Q1 2024 non-GAAP EPS decreased to $0.53 from $0.64 in Q1 2023, reflecting margin compression and acquisition-related dilution.
Anticipates initial margin and EPS dilution from recent acquisitions in 2024, although long-term improvement is expected through Bruker management processes.
Faces challenges in the China market with single-digit revenue decline due to regional softness, although long-term prospects remain due to China's commitment to science and technology.
Q & A Highlights
Q: Frank, can you comment on the revenue slippage you mentioned? Is it just a pull forward into the 4Q '23 and thus not expected going forward? And can you elaborate on the overall demand and your ability to deliver from the backlog? A: (Frank H. Laukien - Bruker Corporation - Chairman, CEO & President) Yes, the Q4 of last year was stronger than expected, leading to a low single-digit organic revenue growth expectation for Q1. About $15 million slipped into Q2, which we expect to recover. There's no risk of cancellation for these, and they are not a reflection of demand weakness. We anticipate mid-single-digit or better organic revenue growth in Q2 and expect double-digit CER growth in the second quarter.
: With the recent number of acquisitions, can you discuss potential dilution and your integration priorities? A: (Frank H. Laukien - Bruker Corporation - Chairman, CEO & President) We are confident in our integration capabilities, as our organizational structure allows us to manage multiple acquisitions effectively. The recent acquisitions, including ELITech and NanoString, are strategically important and were acquired at compelling valuations. We plan to provide more details in a mini Investor Day after the NanoString acquisition closes.
Q: Can you discuss the order backdrop, particularly on the academic side, and your expectations going forward? A: (Frank H. Laukien - Bruker Corporation - Chairman, CEO & President) The booking environment is decent, with reasonable bookings in biopharma and diagnostics. The macro environment is stable, aligning with our expectations. We anticipate above-market organic revenue growth for the year.
Q: Can you provide insights into the trends and expectations for China, especially regarding the stimulus loan program? A: (Gerald N. Herman - Bruker Corporation - Executive VP & CFO) It's still early to see the impact of the stimulus program, which targets technology upgrades over multiple years. We expect it to eventually benefit Bruker but do not have specific details on timing or impacted products.
Q: Regarding the 2Q guide for mid-single-digit organic growth, can you clarify the assumptions and whether there is any conservatism in this guidance? A: (Frank H. Laukien - Bruker Corporation - Chairman, CEO & President) The guidance is somewhat conservative, aiming to avoid a repeat of Q1's miss. There is potential upside, but we aim for a realistic and achievable target for Q2.
Q: Can you provide more context on the moving pieces within the CALID business and comment on timSTOF growth and other pressures seen this quarter? A: (Frank H. Laukien - Bruker Corporation - Chairman, CEO & President) The revenue slippage in CALID was not solely due to timSTOF but also affected other areas like semiconductor metrology tools. CALID faced a tough comparison year-over-year, but timSTOF continues to perform well with significant advancements in proteomics and related fields.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
