Bruker Signals Growth Pivot as Semiconductor and Overseas Orders Gain Steam

Key Points

• Order momentum is improving across Bruker’s business, with semiconductor metrology, overseas academic/government demand, and some diagnostics lines helping offset weakness in U.S. academic funding. The company said it is on track for three straight quarters of book-to-bill above 1.0.
• Bruker expects organic revenue growth to resume in Q2 after a first-quarter decline tied to tough comparisons and softness in China and U.S. academic/government markets. Management said earnings also came in above both company and Street expectations.
• Semiconductor metrology and China are key growth drivers, with strong AI-related and new-fab demand supporting order strength and capacity expansion in that segment. Bruker also sees China as a long-term opportunity despite local competition, with structural growth potential remaining positive.

Bruker NASDAQ: BRKR is seeing stronger order momentum across several end markets, with semiconductor metrology, non-U.S. academic and government customers, and parts of its diagnostics business helping offset continued weakness in U.S. academic funding, a company representative said at a Jefferies healthcare conference.

In a discussion hosted by Jefferies analyst Tycho Peterson, Gerald, speaking for Bruker, said the highlight of the company’s first quarter was order performance. He said Bruker had “good, strong order performance” in the quarter following a solid fourth quarter, and indicated the company appears on track for three consecutive quarters with a book-to-bill ratio above 1.0.

Gerald said first-quarter organic revenue declined as expected, reflecting a difficult year-earlier comparison and challenges in China and U.S. academic and government markets. However, he said revenue is expected to return to organic growth beginning in the second quarter, with execution becoming the key focus.

“We feel like we’re kind of moving to pivoting to another period of growth for Bruker,” Gerald said, adding that earnings per share exceeded the company’s own expectations and Wall Street expectations in the quarter.

U.S. Academic Funding Remains Delayed

Gerald described the U.S. academic and government market as “still very challenging,” despite grant approvals from agencies such as the National Institutes of Health and the National Science Foundation. He said Bruker’s instruments are included in approved grant applications, but the company has not yet seen significant funding tied to those projects.

He said the pattern resembles fiscal 2025, when funding delays extended into the third quarter before a “large flush of money” arrived near the end of the government fiscal year in September. If orders tied to those grants are not placed until the third quarter, Gerald said they are unlikely to have a meaningful impact on Bruker’s fiscal 2026 revenue because production and execution would push most revenue into fiscal 2027.

The instruments tied to those applications are generally high-ticket items, Gerald said, including life science mass spectrometry systems, nuclear magnetic resonance instruments, and X-ray and microscopy-related products.

Outside the U.S., academic and government demand was stronger. Gerald said academic and government orders in European and Asian markets grew more than 20%, with strength in Europe, Japan and China. He said that pace is unlikely to repeat every quarter, but added that mid-single-digit academic and government growth in Europe would be a more normal expectation.

Biopharma Mixed, China Viewed as Long-Term Growth Market

Bruker’s biopharma markets were mixed, according to Gerald. He said the company had a solid fourth quarter of 2025, followed by a softer first quarter on the pharma side. Bruker has less exposure to U.S. biotech than some peers, with U.S. biotech accounting for about 4% of total revenue, he said.

Gerald pointed to stronger conditions in Europe and Asia, including large pharma in Europe and Japan and both biotech and pharmaceutical demand in China. He said China’s first-quarter performance was solid and that expectations for the second quarter were similar.

On China more broadly, Gerald said Bruker is coming off several weak years of demand but remains more positive on the market than some peers. He cited growth in industrial and applied markets, semiconductor-related products that can be sold into China, and biopharma. He said China currently represents more than 13% of Bruker’s revenue.

For 2026, Gerald said Bruker’s growth expectations for China are roughly flat but could have upside. Longer term, he said low-double-digit to mid-double-digit structural growth in China is “pretty reasonable” for the company.

Local competition has affected parts of Bruker’s business in China, including diagnostics, particularly the MALDI franchise, and some microscopy products. However, Gerald said higher-end life science mass spectrometry and NMR instruments remain more protected because there are fewer competitors with comparable products.

Semiconductor Metrology Orders Strengthen

Semiconductor metrology remains a key area of momentum. Gerald said Bruker recovered about $10 million to $15 million in revenue during the first quarter from a previously discussed $40 million pushout, and expects similar amounts to be recognized in the second and third quarters. He said timing in that business is driven by large customers’ delivery and shipment preferences.

Gerald said Bruker has become more optimistic about semiconductor metrology for the rest of fiscal 2026 and beyond after strong order performance in the first quarter and early second quarter.

The company is adding capacity in that business and expects to be able to double capacity by the end of 2026. Gerald said Bruker’s semiconductor metrology business is about $300 million in size, with roughly two-thirds tied to production quality assurance and quality control, which is more connected to wafer activity. The remaining roughly $100 million relates to research and development and mask repair, which he said should not be calibrated directly to wafer production.

Gerald said demand in production QA/QC is being driven largely by artificial intelligence-related semiconductor activity and new fab capacity in regions including Japan, Europe and the U.S.

Diagnostics, Security and Margins

Gerald also highlighted growth in Bruker’s security and detection business, which he said has increased from under $30 million to more than $60 million to $70 million. The fastest-growing area is explosive trace detection, including handheld devices used in airport security and air cargo screening. He said the business has a favorable margin profile and appears durable, particularly in the U.S. and Europe.

Within Bruker’s CALID segment, Gerald said molecular spectroscopy, life science mass spectrometry orders, and microbiology and diagnostics are performing well. He cited growth in the MALDI Biotyper franchise, double-digit consumables growth, and strong instrument placements in the ELITechGroup business, which he said is ahead of Bruker’s original acquisition model.

On profitability, Gerald said Bruker has taken more than $140 million of cost savings out of the company, which will drive most of the expected operating margin improvement in 2026. He said Bruker expects a nearly 300-basis-point operating margin step-up in 2026, followed by an additional 150 to 200 basis points in 2027, with double-digit EPS growth expected for multiple years.

About Bruker NASDAQ: BRKR

Bruker Corporation, founded in 1960 by physicist Günther Laukien and headquartered in Billerica, Massachusetts, is a leading developer and manufacturer of high-performance scientific instruments and analytical solutions. The company designs systems that enable molecular and materials research across academic, governmental, and industrial laboratories.

Bruker's product portfolio encompasses nuclear magnetic resonance (NMR) spectrometers for molecular structure and dynamics studies, mass spectrometry platforms for proteomics and metabolomics, X-ray diffraction and scattering instruments for crystallography and materials characterization, atomic force and scanning probe microscopes for nanoscale surface analysis, as well as preclinical imaging systems such as micro-CT and MRI scanners.

In addition to hardware, Bruker provides software suites, applications support, training services, and long-term maintenance agreements to ensure optimal instrument performance.

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