BD (Q3 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $5 billion, up 4.4% year-over-year (FX-neutral).

Adjusted Operating Margin: 24.9%, a decrease of 100 basis points from the prior year.

Adjusted EPS: $3.23, up 4.9% and exceeding expectations.

Free Cash Flow: Year-to-date at $1.7 billion, a 45% increase compared to the previous year.

Shareholder Returns: $3.1 billion returned to shareholders, including $2.3 billion in share repurchases and $0.9 billion in dividends.

2Strategic Updates and Business Highlights

New BD Strategy: The first full quarter operating as "New BD" showed strong commercial momentum across key growth platforms, including:

Biologic Drug Delivery: Double-digit growth driven by GLP-1s.

Advanced Patient Monitoring (APM): Continued above-market growth, supported by new product launches.

PureWick and Advanced Tissue Regeneration: Both platforms reported double-digit growth.

Commercial Excellence: Enhanced focus on customer engagement and accountability, with investments translating into growth across various segments.

Innovation Pipeline: New product launches include the Liverty TIPS Stent Graft and the Elyra Thulium Fiber Laser System, aimed at expanding market presence in high-growth areas.

3Forward Guidance and Outlook

Full-Year Guidance: Revenue growth expected toward the high end of the low single-digit range; adjusted EPS guidance increased to a range of $12.62 to $12.72.

Fiscal 2027 Outlook: Anticipated low single-digit revenue growth, with a 200 basis point headwind from the Alaris remediation. Modest EPS leverage expected, supported by pricing actions and productivity gains.

4Bad News, Challenges, or Points of Concern

Headwinds:

Alaris: Significant revenue decline expected due to ongoing remediation efforts, contributing to a 200 basis point headwind in FY 2027.

China Market: Continuing pressure on revenue, expected to decrease in significance as it represents a smaller portion of overall revenue.

Vaccines: Ongoing challenges in the vaccine segment, although signs of stabilization are emerging.

Margin Pressure: Adjusted operating margin declined due to tariff impacts and increased costs, particularly related to oil-based resins and freight.

5Notable Q&A Insights

Revenue Growth Drivers: Management emphasized the importance of growth platforms and the impact of commercial investments on revenue acceleration.

Utilization Trends: Positive indicators in hospital utilization, with strong performance in blood collection and diagnostic testing.

Long-Term Margin Goals: Discussions around the potential for margin expansion, with aspirations for future growth in operating margins, though no specific long-term targets were set.

Market Dynamics: Management is proactively addressing inflation and cost pressures through pricing strategies and operational efficiencies. Overall, BD reported a strong Q3 performance with broad-based growth, while also addressing challenges related to specific product lines and market dynamics. The company remains focused on executing its strategic initiatives to drive future growth and profitability.