BIO 10-K & 10-Q changes, risk factors and insider trading

We have significant international operations. We have direct distribution channels in over 36 countries outside the United States, and during the twelve months ended December 31, 20242025 our foreign entities generated 59%approximately 60% of our net sales. Compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business. These numerous and sometimes conflicting laws and regulations include, among others, data privacy requirements, labor relations laws, tax laws, unfair competition regulations, import and trade restrictions, tariffs, duties, quotas and other trade barriers, export requirements, U.S. laws such as the Foreign Corrupt Practices Act ("FCPA") and other U.S. federal laws and regulations established by the office of Foreign Asset Control, foreign laws such as the UK Bribery Act 2010 or other foreign laws which prohibit corrupt payments to governmental officials or certain payments or remunerations to customers. In addition, changes in laws or regulations potentially could be disruptive to our operations and business relationships in the affected regions.

In recent years, we have been faced with challenging global economic conditions. U.S. and international markets have experienced inflationary pressures, and inflation rates in the U.S. and in other countries in which we operate have been at elevated levels. Our raw material costs have increased, and we are not always able to recover these increased costs from our customers. Russia’s invasion of Ukraine and sanctions against Russia have caused disruptions to global economic conditions and are negatively impacting our business in Russia.business. Conflicts in the Middle East have also caused some disruptions to the global business environment (including impacting international logistics), the stability of the Middle East region and our business in that region. It is unknown how long any of these disruptions will continue and whether such disruptions will become more severe. In addition, we expect moderating economic growth and changing government policies in China will continue to affect our commercial opportunities in the country. The bank failures in March 2023 and the resulting volatility in the banking sector caused and could continue to cause disruptions to global economic conditions and may impact access to cash and other financial resources by us, our customers and our suppliers. A deterioration in the global economic environment may result in a decrease in demand for our products, increased competition, downward pressure on prices for our products and longer sales cycles. A weakening of macroeconomic conditions is also adversely affecting our suppliers, which could continue to result in interruptions in the supply of components and raw materials necessary for our products and raw material cost increases. Additionally, theThe United States continues to announce new tariffs and othersignificant increases to existing tariffs. Other countries havecontinue imposedto tariffsrespond with countermeasures. We continue to analyze this uncertain situation and the impacts on certainour goods.business Furtheras escalationevents ofunfold. tariffsThese orevents otherhave tradeimpacted barriersand we expect will continue to impact the global economic and geopolitical environment, and could lead to higher prices, inflation and possibly a recession. This could lead to higher costs for our products and lower revenue, and could adversely impact our profitability and/or our competitiveness. See also our risk factors regarding our international operations above and regarding government regulations below.

Reductions in government funding and the capital spending programs of our customers have negatively impacted our revenue and could have a material adverse effect on our business, results of operations or financial condition.

Our customers include universities, clinical diagnostics laboratories, government agencies, hospitals and pharmaceutical, biotechnology and chemical companies. The capital spending programs of these institutions and companies have a significant effect on the demand for our products. Such programs are based on a wide variety of factors, including the resources available to make such purchases, the availability of funding from grants by governments or government agencies, the spending priorities for various types of equipment and the policies regarding capital expenditures during industry downturns or recessionary periods. In 2025, the United States government proposed reductions of federal funding to some institutions and companies that are our customers. Reduced government spending, along with ongoing challenges in the biopharma market and among small biotech companies, continues to negatively impact our business. If funding to our customers werecontinues to decrease, or if our customers were to decrease or reallocate their budgets in a manner adverse to us, our business, results of operations or financial condition could be materially and adversely affected.

The manufacture of our products requires the timely delivery of sufficient amounts of quality components and materials. We manufacture our products around the world. We acquire our components and materials from many suppliers in various countries. We work closely with our suppliers to ensure the continuity of supply, but we cannot guarantee these efforts will always be successful. Further, while we seek to diversify our sources of components and materials, in certain instances we acquire components and materials from a sole supplier. The COVID-19 pandemic created delays and shortages in the supply of components and raw materials. These shortages, along with challenges in ramping up new production facilities, caused a backlog of sales orders, some of which we consider to be significant, and delays in certain new product development activities. Some of the backlog of sales orders continued into 2023 but moderated in 2024 to a more typical level. We have experienced raw material cost increases, some of which will likely continue. In addition, due to the regulatory environment in which we operate, we may need to cease use of certain essential components and materials and be unable to establish acceptable replacement sources for such components or materials. When our supply is reduced or interrupted or of poor quality, and we are unable to develop alternative sources for such supply, our ability to manufacture our products in a timely or cost-effective manner is adversely affected, which affects our ability to sell our products. Tariff increases and associated supply chain disruptions may also impact our business. In addition, if we do not accurately estimate demand for our products, we may experience excess and obsolete inventories and be forced to incur additional expenses, which could adversely affect our results of operations.

We have experienced and expect to continue to experience attempts by individuals and organizations to attack and penetrate our layered security controls. Through our sales and eCommerce channels, we collect and store confidential information that customers provide to, among other things, purchase products or services, enroll in promotional programs and register on our web site. We also acquire and retain information about suppliers and employees in the normal course of business. Such information on our systems includes personally identifiable information and, in limited instances, protected health information. We also create and maintain proprietary information that is critical to our business, such as our product designs and manufacturing processes. Despite recent initiatives to improve our technology systems, such as our enterprise resource planning implementation and the centralization of our global information technology organization, we could experience a significant data security breach. The Company is also subject to phishing and other fraud schemes including fraudulent vendor communications with requests for payments and fraudulent attempts to redirect payments to improper bank accounts, some of which have been successful. While the Company has adopted training and process changes to limit the success of such fraudulent activity, the Company will be unable to stop all such fraudulent activity which may lead to unrecoverable payments to criminal accounts. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may not be able to anticipate all of these techniques or to implement adequate preventive measures. Computer hackers have attempted to penetrate and will likely continue to attempt to penetrate our and our vendors’ information systems and, if successful, could misappropriate confidential customer, supplier, employee or other proprietary business information, such as our intellectual property. Third parties could also gain control of our systems and use them for criminal purposes while appearing to be us. As a result, we could lose existing customers, have difficulty attracting new customers, be exposed to claims from customers and suppliers, financial institutions, payment card associations, employees and other persons, have regulatory sanctions or penalties imposed, incur additional expenses or lose revenues as a result of a data privacy breach, or suffer other adverse consequences. Our operations and ability to process sales orders, particularly through our eCommerce channels, could also be disrupted, as they have been in the past. Any significant breakdown, intrusion, interruption, corruption, or destruction of our systems, as well as any data breaches, could have a material adverse effect on our business and results of operations. See also our risk factors regarding our information technology systems below.

Our information technology ("IT") systems are an integral part of our business, and a significant disruption of our IT systems (which increasingly include cloud-based systems provided by third party vendors) could have a material adverse effect on our business, results of operations and financial condition. We depend on our IT systems to process orders, manage inventory, pay our vendors and collect accounts receivable. Our IT systems also allow us to efficiently purchase products from our suppliers and ship products to our customers on a timely basis, maintain cost-effective operations and provide customer service. We cannot assure you that our contingency plans will allow us to operate at our current level of efficiency.

We have incurred and may continue to incur losses in future periods due to write-downs in the value of our financial instruments.

We made significant changes to our organizational structure over the past few years, including the reorganization of aspects of our European operations that was announced in February 2021 and additional restructurings approved in 2023, 2024, and 2025. These changes may have unintended consequences, such as distraction of our management and employees, labor unrest, business disruption, disruption of supply, attrition of our workforce, inability to attract or retain key employees, and reduced employee morale or productivity.

•The trend towards managed care, together with healthcare reform of the delivery system in the United States and efforts to reform in Europe,Europe and China, has resulted in increased pressure on healthcare providers and other participants in the healthcare industry to reduce selling prices. Consolidation among healthcare providers and consolidation among other participants in the healthcare industry has resulted in fewer, more powerful groups, whose purchasing power gives them cost containment leverage. In particular, there has been a consolidation of laboratories and a consolidation of blood transfusion centers. These industry trends and competitive forces place constraints on the levels of overall pricing and thus could have a material adverse effect on our gross margins for products we sell in clinical diagnostic markets.

•Third party payors, such as Medicare and Medicaid in the United States, have reduced their reimbursements for certain medical products and services. Our Clinical Diagnostics business is impacted by the level of reimbursement available for clinical tests from third party payors. In the United States payment for many diagnostic tests furnished to Medicare fee-for-service beneficiaries is made based on the Medicare Clinical Laboratory Fee Schedule ("CLFS"), a fee schedule established and adjusted from time to time by the Centers for Medicare and Medicaid Services ("CMS"). Some commercial payors are guided by the CLFS in establishing their reimbursement rates. Laboratories and clinicians may decide not to order or perform certain clinical diagnostic tests if third party payments are inadequate, and we cannot predict whether third party payors will offer adequate reimbursement for tests utilizing our products to make them commercially attractive. Legislation, such as the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act ("PPACA") and the Middle Class Tax Relief and Job Creation Act of 2012, has reduced the payments for clinical laboratory services paid under the CLFS. In addition, the Protecting Access to Medicare Act of 2014 ("PAMA") has made significant changes to the way Medicare will pay for clinical laboratory services, which has further reduced reimbursement rates.

TheIn May 2024, the FDA has issued a final rule applicable to certain clinical diagnostic products referred to as laboratory developed tests.tests This("LDTs"). changeA federal court vacated the rule in March 2025, and the FDA subsequently formally rescinded the final rule. If there is new legislation in the future to bring LDTs under the same FDA approachregulatory framework as other in vitro diagnostics, this change could negatively impact our customers who use our Lifelife Sciencescience products for laboratory developed tests.LDTs.

Many foreign governments have similar rules and regulations regarding the importation, registration, labeling, sale and use of our products. Such agencies may also impose new requirements that may require us to modify or re-register products already on the market or otherwise impact our ability to market our products in those countries. The EU in-vitro Diagnostics Regulation (the “EU IVDR”) includes broad changes regarding in vitro diagnostic devices and medical devices. The EU IVDR required us to modify or re-register some products, and we expect will continue to result in additional costs for ongoing compliance. In addition, Russia has enacted more stringent medical product registration and labeling regulations, China has enacted stricter labeling requirements, and we expect other countries, such as Brazil and India, to impose more regulations that impact our product registrations. The United Kingdom's withdrawal from the EU is resulting in additional regulatory requirements associated with goods manufactured and sold in the United Kingdom and additional complexities and delays with respect to goods, raw materials and personnel moving between the United Kingdom and the EU. In addition, newNew government administrations also may interpret existing regulations or practices differently. Due to these evolving and diverse requirements, we face uncertain product approval timelines, additional time and effort to comply, as well as the potential for reduced sales and/or fines for noncompliance. Increasing protectionism in such countries also impedes our ability to compete with local companies. We may not be able to participate in certain public tenders in China, India and Russia because of increasing measures to restrict access to such tenders for companies without local manufacturing capabilities. Such regulations could adversely affect our business, results of operations and financial condition. See also our risk factors regarding our international operations and regarding global economic and geopolitical conditions above.

On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) which made a number of substantial changes to how the United StatesU.S. imposes income tax on multinational corporations. The U.S Treasury, Internal Revenue Service and other standard setting bodies continue to issue guidance and interpretation relating to the Tax Act. As future guidance is issued, we may make adjustments to amounts previously reported that could materially impact our financial statements.

In addition, there is an increasing focus by U.S. and international regulators, investors, customers, and other stakeholders on environmental, social and governance (ESG) matters. Complying with new laws or regulations concerning sustainability matters,matters or climate related matters or other ESG matters will result in increased compliance costs and create additional non-compliance risks. Failure to adequately meet our stakeholder’s expectations or comply with any such laws or regulations may result in loss of business, reputational damage, an inability to attract customers, an inability to attract and retain top talent, and a negative impact on our business, results of operations and financial condition. We also have announced certain sustainability goals, which require ongoing investment and operational changes. Our efforts may not achieve their intended outcomes, and we may not achieve such goals, which could negatively impact our reputation and business.

We utilize artificial intelligence and machine learning technologies (“AI”), such as chatbots, assistants and automation agents, in our business operations, and we are exploring the other opportunities that AI could bring us. The use of AI, particularly generative AI, and the developing regulatory landscape,landscape pose risks that could expose us to liability or adversely affect our business. Integration of AI into our and our vendors’ systems (potentially without the vendor disclosing such use to us) subjects us to the risk that the providers of AI may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection. This may lead to loss of intellectual property or exposure of confidential or proprietary information, breaches of security or privacy, and reduced levels of service or experience. Sophisticated cyberattacks, including those using AI, could increase these risks. Generative AI can produce false or misleading outputs, or generate content that may not be subject to intellectual property protection or that infringes proprietary rights of others, and thereby present additional risks to our business. Regulatory changes or reinterpretations could introduce new compliance risks, including potential government enforcement actions or civil lawsuits. In addition, a failure to timely and effectively use or deploy AI and integrate it into new product offerings and services could negatively impact our competitiveness, particularly ahead of developing consumer demands and evolving industry trends. Our competitors’ faster or more effective adoption of AI also could disadvantage us.

We have significant manufacturing and distribution facilities, including in the United States, France, Switzerland, Germany and Singapore. In particular, the western United States has experienced a number of earthquakes, wildfires, floods, landslides and other natural disasters in recent years. These occurrences could damage or destroy our facilities which may result in interruptions to our business and losses that exceed our insurance coverage. In addition, lack of fuel resources due to geopolitical instability (such as Russia’s reduction in energy resources supplied to Western Europe), electricity outages, the inability to operate our production and distribution facilities due to power grid failures or lack of fuel, and strikes or other labor unrest at any of our sites or surrounding areas could cause disruption to our business. Acts of terrorism, bioterrorism, violence or war (such as Russia's invasion of Ukraine and the recent escalation of conflicts in the Middle East), weather-related events, or public health issues such as pandemics and the outbreak of a contagious disease like COVID-19 could also affect the markets in which we operate, our business operations and strategic plans. Political unrest may affect our sales in certain regions, such as in Southeast Asia, the Middle EastEast, and Eastern Europe. Any of these events could adversely affect our business, results of operations and financial condition.

The accompanying discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. We evaluate our estimates on an on-going basis. We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying valuesamounts of assets and liabilities that are not readily apparent from other sources. However, future events may cause us to change our assumptions and estimates, which may require adjustment. Actual results could differ from these estimates. We have determined that for the periods reported in this Annual Report on Form 10-K the following accounting policies and estimates are critical in understanding our financial condition and results of operations.

We operate in multiple jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. Our effective income tax rate may be affected by the changes in or interpretations of tax laws and tax agreements in any given jurisdiction, utilization of net operating loss and tax credit carryforwards, changes in geographical mix of income and expense, and changes in our assessment of matters such as the ability to realize deferred tax assets. As a result of these considerations, we must estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating current tax exposure together with assessing temporary differences resulting from the different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet.sheets.

We first may assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test included in U.S. GAAP. To the extent our assessment identifies adverse conditions, or if we elect to bypass the qualitative assessment, goodwill is tested at the reporting unit level using a quantitative impairment test. We generally estimate the fair value of the reporting units in goodwill impairment assessments using an income approach, which includes an analysis of the future cash flows expected to be generated and the risk associated with achieving such cash flows. This approach requires significant management judgment including the discount rate that is applied to the discretely forecasted future cash flows to calculate the present value of those cash flows and the estimate of future cash flows attributable to the reporting unit. Actual results may differ from management’s estimates. There were no impairments of goodwill for the years ended December 31, 2024,2025, 20232024 and 2022.2023.

We elected the fair value option under ASC 825, Financial Instruments for accounting of the Loan to Sartorius-Herbst Beteiligungen II GmbH to simplify the accounting. The Loan includes certain value appreciation rights that are due upon repayment of the Loan. The fair value of the Loan and value appreciation right is estimated under the income approach using a discounted cash flow, and option pricing model, respectively. The significant assumptions used to estimate fair value of the Loan include an estimate of the discount rate and cash flows of the Loan and the significant assumptions used to estimate the fair value of the value appreciation right include volatility, the risk-free interest rate, expected life (in years) and expected dividend. The inputs are subject to estimation uncertainty and actual amounts realized may materially differ. An increase in the expected volatility may result in a significantly higher fair value, whereas a decrease in expected life may result in a significantly lower fair value. All subsequent changes in fair value of the Loan and value appreciation right, including accrued interest are recognized in Losses(Gains) losses from change in fair market value of equity securities and loan receivable in our consolidated statements of income (loss).

The following table shows Cost of goods sold, Gross profit,margin, components of operating expense, and Net income (loss) as a percentage of Net sales:

Net sales ("sales") for the year ended December 31, 20242025 were $2.57$2.58 billion, compared to $2.67$2.57 billion for the year ended December 31, 2023,2024, aan decreaseincrease of 3.9%.0.7%. On a currency neutral basis, for the year ended December 31, 20242025 sales decreasedwere byessentially approximately 3.6%flat compared to the same period in 2023. The decrease in sales was driven by lower sales in our Life Science segment.2024.

The Life Science segment sales for the year ended December 31, 20242025 were $1.03$1.02 billion, a decrease of 12.8%0.7% compared to the year ended December 31, 2023.2024. On a currency neutral basis, sales decreased 12.6%1.3% compared to the year ended December 31, 2023. The decrease was2024, driven by ongoingthe weaknessconstrained inacademic theresearch and biotech andfunding biopharma end-markets.environment. Currency neutral sales decreased acrossin allthe regions.Americas, partially offset by increased sales in EMEA and Asia Pacific.

The Clinical Diagnostics segment sales for the year ended December 31, 20242025 were $1.54$1.56 billion, an increase of 3.3%1.6% compared to the year ended December 31, 2023.2024. On a currency neutral basis, sales increased 3.7%0.8% compared to the year ended December 31, 2023.2024. The currency neutral sales increase was primarily driven by an increased demand for our quality control and blood typing products.products, partially offset by lower reimbursement rates for diabetes testing in China. Currency neutral sales increased acrossin allthe regions.Americas and EMEA, partially offset by decreased sales in Asia Pacific.

Consolidated gross margin was 53.7% for the year ended December 31, 2024 compared to 53.4% for the year ended December 31, 2023. Gross margin for the Life Science segment and Clinical Diagnostics segment for the year ended December 31, 20242025 increaseddecreased by approximately 0.32.5 percentage points and 0.5 percentage points, respectively, from the year ended December 31, 2023.2024. The increasedecrease in gross margin was primarily driven by favorableone-time inventory write-offs after extensive evaluations of our product mixportfolios as a result of recent acquisitions, higher material costs and costreduced controlfixed measures,manufacturing partially offset by higher restructuring and material costs.absorption.

Consolidated selling, general and administrative expense ("SG&A") decreasedexpense increased to $844.3 million or 32.7% of sales for the year ended December 31, 2025 compared to $814.0 million or 31.7% of sales for the year ended December 31, 2024 compared to $841.7 million or 31.5% of sales for the year ended December 31, 2023.2024. The decreaseincrease toin SG&A expense was primarily due to lowerhigher restructuring costs and a reduction in discretionary spending.costs.

Consolidated research and development ("R&D") expense increaseddecreased to $275.6 million or 10.7% of sales for the year ended December 31, 2025 compared to $295.9 million or 11.5% of sales for the year ended December 31, 2024 compared to $247.4 million or 9.3% of sales for the year ended December 31, 2023.2024. The increasedecrease in R&D expense in the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a$29.5 one-timemillion acquiredof in-process research and development ("IPR&D") expense of $29.5 millionrecognized in 2024 andfor an increaseacquisition that did not recur in the2025, fairpartially valueoffset ofby contingenthigher considerationrestructuring of $12.5 million impacting R&D expensecosts in 2024 compared to a decrease in the fair value of contingent consideration of $14.0 million impacting R&D expense in 2023.2025.

Foreign currency exchange (gains) losses, net consist primarily of foreign currency transaction gains and losses on intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts used to manage our foreign currency exchange risk. Foreign currency exchange net gains were $3.9$6.6 million and $7.3$3.9 million for the years ended December 31, 20242025 and December 31, 2023,2024, respectively. Gains and losses are primarily due to the estimating process inherent in the timing of product shipments and intercompany debt payments, market volatility, and the change in the fair value of our foreign exchange contracts.

LossesChange in fair market value of equity securities and loan receivable (Gains) losses from change in fair market value of equity securities and loan receivable was $2.66a billiongain of $900.4 million and $1.25a loss of $2.66 billion for the years ended December 31, 20242025 and 2023,2024, respectively. The change in the fair market value primarily resulted from the recognition of higherholding gains of $872.6 million for the year ended December 31, 2025 compared to holding losses of $2.68 billion compared to $1.26 billion infor the year ended December 31, 20232024 on our positioninvestment in Sartorius AG. In addition, holding gains from the change in fair market value of our loan receivable of $12.5 million in the year ended December 31, 2024, compared to holding losses of $6.8 million in the year ended December 31, 2023 contributed to the change.Sartorius.

Other income, net includes investment and dividend income, interest income on our cash and cash equivalents, short-term investments and long-term marketable securities. Other income, net for the year ended December 31, 2024 decreased towas $90.3 million compared to $106.5 million for the year ended December 31, 2023.2025, Theessentially decrease was primarily attributable to lower dividend income from Sartorius AG in 2024flat compared to 2023.the year ended December 31, 2024.

Our effective tax rates were 21.3%23.7% and 25.0%21.3% for the years ended December 31, 20242025 and 2023,2024, respectively. The effective tax rates for the years ended December 31, 20242025 and 20232024 were primarily driven by the unrealized gain/losschange in fair market value of our equity securities that was taxed at 22.6% and 22.3%, respectively, as well as shifts in the geographical mix of earnings.

AtAs of December 31, 2024,2025, we had available $1.7$1.5 billion in cash, cash equivalents and short-term investments, of which approximately 14%18% was held in our foreign subsidiaries. The amount of funds held in the United States can fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as acquisitions and borrowings. As part of our ongoing liquidity assessments, we regularly monitor the mix of domestic and foreign cash flows (both inflows and outflows). It is generally our intention to repatriate certain foreign earnings to the extent that such repatriations are not restricted by local laws, and there are no substantial incremental costs.

Cash Flows from OperationsOperating Activities

Net cash provided by operationsoperating activities was $455.2$532.2 million and $374.9$455.2 million for the years ended December 31, 20242025 and 2023,2024, respectively. The increase in operating cash flows was primarily due to lowerimproved cashworking paid to suppliers and employees, lower income tax paid, and higher proceeds from foreign exchange contracts, partially offset by lower cash received from customers and lower dividend proceeds from Sartorius AG.capital.

Net cash used in investing activities was $160.2$189.7 million comparedand to net cash provided by investing activities of $20.2$160.2 million for the years ended December 31, 20242025 and 2023,2024, respectively,respectively. primarilyThe increase was due to net cash outflows for the acquisition of Stilla Technologies, partially offset by lower net outflows related to marketable securities and investments, reflecting the timing of our purchases, maturitiesmaturities, and sales of marketable securities and investments.sales.

Net cash used in financing activities was $218.8$283.2 million and $425.6$218.8 million for the years ended December 31, 20242025 and 2023,2024, respectively. The changeincrease in net cash used in financing activities was primarily attributable to lower payments for share repurchases, partially offset by a one-time payment of contingent consideration.consideration in 2024. During the year ended December 31, 2025, we repurchased 1,205,381 shares of Class A common stock for $295.5 million and during the year ended December 31, 2024, we repurchased 690,857 shares of Class A common stock for $203.6 million. We designated these repurchased shares as treasury stock. As of December 31, 2025, $284.6 million of stock remained available for repurchases under the Company's 2023 Share Repurchase Program.

We have significant international operations. We have direct distribution channels in over 36 countries outside the United States, and during the threesix months ended MarchJune 31,30, 2026 our foreign entities generated 61% of our net sales. Compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business. These numerous and sometimes conflicting laws and regulations include, among others, data privacy requirements, labor relations laws, tax laws, unfair competition regulations, import and trade restrictions, tariffs, duties, quotas and other trade barriers, export requirements, U.S. laws such as the Foreign Corrupt Practices Act ("FCPA") and other U.S. federal laws and regulations established by the office of Foreign Asset Control, foreign laws such as the UK Bribery Act 2010 or other foreign laws which prohibit corrupt payments to governmental officials or certain payments or remunerations to customers. In addition, changes in laws or regulations potentially could be disruptive to our operations and business relationships in the affected regions.

We utilize artificial intelligence and machine learning technologies (“AI”), such as chatbots, assistants and automation agents, in our business operations, and we are exploring the other opportunities that AI could bring us. The use of AI, particularly generative AI, and the developing regulatory landscape pose risks that could expose us to liability or adversely affect our business. Integration of AI into our and our vendors’ systems (potentially without the vendor disclosing such use to us) subjects us to the risk that the providers of AI may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection. This may lead to loss of intellectual property or exposure of confidential or proprietary information, breaches of security or privacy, and reduced levels of service or experience. Sophisticated cyberattacks, including those using AI, could increase these risks. Generative AI can produce false or misleading outputs, or generate content that may not be subject to intellectual property protection or that infringes proprietary rights of others, and thereby present additional risks to our business. Regulatory changes or reinterpretations could introduce new compliance risks, including potential government enforcement actions or civil lawsuits. In addition, a failure to timely and effectively use or deploy AI and integrate it into new product offerings and services could negatively impact our competitiveness, particularly ahead of developing consumer demands and evolving industry trends. Our competitors’ faster or more effective adoption of AI also could disadvantage us.

A significant portion of our operations and sales are outside of the United States. When we make purchases and sales in currencies other than the U.S. dollars, we are exposed to fluctuations in foreign currencies relative to the U.S. dollar that may adversely affect our results of operations and financial condition. Our international sales are largely denominated in local currencies. As a result, the strengthening of the U.S. dollar negatively impacts our consolidated net sales expressed in U.S. dollars. Conversely, when the U.S. dollar weakens, our expenses at our international sites increase. In addition, the volatility of other currencies may negatively impact our operations outside of the United States and increase our costs to hedge against currency fluctuations. InWe addition,use derivative instruments to hedge a portion of our currency exposure. These hedging activities may not be effective, may not fully offset the underlying exposure due to imperfect correlation, timing, or forecasting of exposures, and may limit the benefit we would otherwise realize from favorable currency movements. If our hedging positions are incorrectly sized or currencies move contrary to our expectations, we could incur unexpected gains or losses that materially affect our results of operations. We also hold investments and a loan receivable that are subject to foreign exchange fluctuations. We cannot assure you that future shifts in currency exchange rates will not have a material adverse effect on our results of operations and financial condition.

We made significant changes to our organizational structure over the past few years, including restructuringsthrough approved in 2023, 2024, and 2025.restructurings. These changes may have unintended consequences, such as distraction of our management and employees, labor unrest, business disruption, disruption of supply, attrition of our workforce, inability to attract or retain key employees, and reduced employee morale or productivity.

On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) which made a number of substantial changes to how the U.S. imposes income tax on multinational corporations. The U.SU.S. Treasury, Internal Revenue Service and other standard setting bodies continue to issue guidance and interpretation relating to the Tax Act. As future guidance is issued, we may make adjustments to amounts previously reported that could materially impact our financial statements.

We have substantial debt and have the ability to incur additional debt. As of MarchJune 31,30, 2026, we had approximately $1.2 billion of outstanding indebtedness, including $400 million classified as current portion of long‑term debt, primarily related to our 3.3% Senior Notes due in March 2027, and $800 million of long‑term debt, primarily related to our 3.7% Senior Notes due in March 2032, as further discussed in Note 6 of the condensed consolidated financial statements. In addition, we have a revolving credit facility that provides for up to $200.0 million in borrowing capacity, $6.0 million of which was utilized for domestic standby letters of credit as of MarchJune 31,30, 2026. Our incurrence of substantial amounts of debt may have important consequences. For instance, it could:

•U.S. federal false claims laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-partythird party payors that are false or fraudulent. In addition, the U.S. federal government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes;

•the Health Insurance Portability and Accountability Act ("HIPAA"), as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and state or foreign law equivalents of each of the U.S. federal laws above, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-partythird party payor, including commercial insurers.

Application of the choice of forum provision may be limited in some instances by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the choice of forum provision will not apply to actions arising under the Exchange Act or the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, subject to a limited exception for certain “covered class actions.actions”. There is uncertainty, particularly in light of current litigation,uncertainty as to whether a court would enforce the choice of forum provision with respect to claims under the Securities Act. Our stockholders will not be deemed, by operation of the Company’s choice of forum provision, to have waived claims arising under the federal securities laws and the rules and regulations thereunder.

This discussion should be read in conjunction with the information contained in both our consolidated financial statements for the year ended December 31, 2025 and the condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026.

Approximately 39% of our 2026 consolidated net sales are derived from the United States and approximately 61% are derived from international locations, with Europe being our largest international region. The international sales are largely denominated in local currencies such as the Euro, Swiss Franc, Japanese Yen, Chinese Yuan and British Sterling. As a result, our consolidated net sales expressed in dollars benefit when the U.S. dollar weakens and suffer when the U.S. dollar strengthens. When the U.S. dollar strengthens, we benefit from lower cost of sales from our own international manufacturing sites, and from lower international operating expenses. We regularly discuss our changes in revenue and expense categories in terms of both changing foreign exchange rates and in terms of a currency neutralcurrency-neutral basis, if notable, to explain the impact currency has on our results.

Additionally, the recent escalation of regional conflicts in the Middle East has adversely affected demand and logistics in the EMEA region, particularly within our Clinical Diagnostics segment. These disruptions impacted our results during the first quarterhalf of 2026 and, given the continued uncertainty regarding the duration and scope of the conflict, we expect these conditions to continue to adversely affect the EMEA region for the remainder of 2026.

An accounting policy is deemed to be critical if it affects our financial statements materially and requires subjective or complex judgments by management. An accounting estimate is deemed to be critical if it requires assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. Management believes that there have been no significant changes during the three and six months ended MarchJune 31,30, 2026 to the items that we disclosed as our critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Three Months Ended MarchJune 31,30, 2026 Compared to

Three Months Ended MarchJune 31,30, 2025

Percentage sales growth in currency neutralcurrency-neutral amounts are calculated by translating prior period sales in each local currency using the current period monthly average foreign exchange rates for that currency and comparing that to current period sales.

Net sales ("sales") for the firstsecond quarter of 2026 were $592.1$651.0 million compared to $585.4$651.6 million in the firstsecond quarter of 2025, anessentially increase of 1.1%.flat. On a currency neutralcurrency-neutral basis, firstsecond quarter 2026 sales decreased approximately 4.2%1.9% compared to the same period in 2025. The decrease in sales was driven by lower sales in both Life Science and Clinical Diagnostics segments.segment.

The Life Science segment sales for the firstsecond quarter of 2026 were $228.5$252.0 million, essentiallya flatdecrease of 4.1% compared to the same period in 2025. On a currency neutralcurrency-neutral basis, sales decreased 4.3%5.1% compared to the firstsecond quarter in 2025, primarily driven by ongoing challenges in the academic research market,market. particularly in the Americas. Currency neutralCurrency-neutral sales decreased in the Americas and EMEA,Asia Pacific, partially offset by increased sales in Asia Pacific.EMEA.

The Clinical Diagnostics segment sales for the firstsecond quarter of 2026 were $363.6$399.0 million, an increase of 1.9%2.6% compared to the same period in 2025. On a currency neutralcurrency-neutral basis, sales decreasedincreased 4.1%0.3% compared to the firstsecond quarter in 2025, primarily in the EMEA region. The currency neutral sales decrease was primarily driven by thegrowth recentin escalationquality systems, diabetes and blood typing products, partially offset by lower sales of regionalinfectious conflictsdisease products. Currency-neutral sales increased in the MiddleAmericas, East.partially offset by decreased sales in Asia Pacific.

Consolidated gross margin was 52.3%53.1% for both the firstsecond quarter of 2026 andcompared to 53.0% for the second quarter of 2025. Gross margin for the Life Science segment for the firstsecond quarter of 2026 decreasedincreased modestly by approximately 0.30.5 percentage points as compared to the same period in 2025. The decrease in gross margin was primarily driven by higher material costs and logistics costs associated with elevated fuel prices, partially offset by lower restructuring costs. Gross margin for the Clinical Diagnostics segment for the firstsecond quarter of 2026 increasedremained by approximately 0.2 percentage points asflat compared to the same period in 2025. The increase in gross margin was primarily driven by reduced inventory scrap and lower restructuring costs, partially offset by higher logistics costs associated with elevated fuel prices.

ResearchSelling, general and developmentadministrative ("RSG&DA") expense for the firstsecond quarter of 2026 was $62.9$212.0 million or 10.6%32.6% of sales, compared to $73.5$207.7 millionmillion, or 12.6%31.9% of sales infor the firstsecond quarter of 2025. The decreaseincrease in RSG&DA expense was primarily due to lowerhigher restructuringemployee related costs.

Interest expense for the firstsecond quarter of 2026 and 2025 was $12.3$12.1 million and $12.0$12.6 million, respectively, which primarily consisted of interest expense related to the $1.2 billion Senior Notes.

Foreign currency exchange gains,(gains) losses, net consist primarily of foreign currency transaction gains and losses on intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts used to manage our foreign currency exchange risk. Foreign currency exchange gains, net were $2.4 million and $2.7$0.2 million for the firstsecond quarter of 2026 andcompared to foreign currency exchange losses, net of $1.1 million for the second quarter of 2025, respectively. Gains and losses are primarily due to the timing of product shipments and intercompany debt payments, market volatility, and the change in the fair value of our foreign exchange contracts.

(Gains) losses from change in fair market value of equity securities and loan receivable was lossgain of $738.2$458.0 million and $31.8$334.4 million gain for the firstsecond quarter of 2026 and 2025, respectively. The change in the fair market value primarily resulted from the recognition of holding lossesgains of $727.7$430.0 million in the firstsecond quarter of 2026 compared to holding gains of $29.0$326.6 million in the firstsecond quarter of 2025 on our investment in Sartorius. In addition, holding lossesgains from the change in fair market value of our loan receivable of $8.4$15.1 million in the firstsecond quarter of 2026 compared to holding gainslosses of $4.6$2.4 million in the firstsecond quarter of 2025 contributed to the change.

Other income, net for the firstsecond quarter of 2026 was $24.2$23.4 million compared to $37.2$16.2 million for the firstsecond quarter of 2025. The decreaseincrease in Other income, net of $13.0$7.2 million was primarily attributable to lowerhigher interest and investment income in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.

Our effective income tax rate was 23.6%31.5% and 23.3%23.2% for the firstsecond quarter of 2026 and 2025, respectively. The effective tax rate reported in these periods was primarily affected by the change in fair market value of our equity securities as well assecurities, shifts in the geographical mix of earnings.earnings and enactment of new tax legislation during the period.

As of MarchJune 31,30, 2026, we had available $1.56$1.62 billion in cash, cash equivalents and short-term investments, of which approximately 16%14% was held in our foreign subsidiaries. The amount of funds held in the United States can fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as acquisitions and borrowings. As part of our ongoing liquidity assessments, we regularly monitor the mix of domestic and foreign cash flows (both inflows and outflows). It is generally our intention to repatriate certain foreign earnings to the extent that such repatriations are not restricted by local laws, and there are no substantial incremental costs.

Additional liquidity is realized through positive cash flows from operating activities, and is readily available via the sale of short-term investments and access to our $200.0 million unsecured Revolving Credit Agreement, available through February 2029, and to a lesser extent international lines of credit. Borrowings under the Revolving Credit Agreement are available on a revolving basis and can be used to make acquisitions, for working capital and for other general corporate purposes. We had no outstanding borrowings under the Revolving Credit Agreement as of MarchJune 31,30, 2026, however, $6.0 million was utilized for domestic standby letters of credit that reduced our borrowing availability.

In March 2022, we received $1.2 billion in cash proceeds from the issuance of Senior Notes. The $400 million and $800 million Senior Notes mature in March 2027 and March 2032, respectively, and interest on the Senior Notes is 3.3% and 3.7% per annum, respectively. Interest is payable semiannually in arrears on March 15 and September 15 of each year. The $400 million Senior Notes are classified as current as of MarchJune 31,30, 2026. We have sufficient liquidity available to repay this obligation, including $1.56$1.62 billion in cash, cash equivalents and short-term investments as of MarchJune 31,30, 2026. In addition to repayment at maturity, we may also consider refinancing all or a portion of the Senior Notes, though any such refinancing may be at a higher interest rate than the current Senior Notes, depending on market conditions at the time.

Net cash provided by operations was $108.1$206.8 million and $129.9$246.4 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease in operating cash flows was primarily due to lower cash received from customers and higher cash paid to suppliers and employees.

Net cash used in investing activities was $93.2$159.9 million comparedand to net cash provided by investing activities of $2.9$112.5 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The change is primarily due to the timing of our purchases, maturities and sales of marketable securities and investments.investments partially offset by net cash outflows for the acquisition of Stilla on June 30, 2025.

Net cash used in financing activities was $44.0$71.6 million and $97.7$234.0 million for the threesix months ended MarchJune 31,30, 2026, and 2025, respectively. The decrease in net cash used in financing activities was primarily attributable to lower share repurchases.

During the threesix months ended MarchJune 31,30, 2026, we repurchased 176,257286,685 shares of Class A common stock for $47.8$79.3 million and during the threesix months ended MarchJune 31,30, 2025, we repurchased 399,295992,803 shares of Class A common stock for $101.9$242.1 million. We designated these repurchased shares as treasury stock. As of MarchJune 31,30, 2026, $237.1$206.0 million remained available for repurchases under the 2023 Share Repurchase Program. Repurchases under the 2023 Share Repurchase program may be made at management’s discretion from time to time on the open market, through trading plans in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or through privately negotiated transactions, which may include structured repurchases.