Danaher Q2 2026: sales rose 5.5% to $6.27B with core growth of 3.0% (4.5% excluding respiratory testing); GAAP EPS jumped to $1.23 mainly because Q2 2025 carried a $432M write-down, adjusted EPS rose ~8% to $1.94, and full-year adjusted EPS guidance was raised to $8.45–$8.60 after the $9.8B Masimo deal closed.
Revenue
$6.3B
+5.5% YoY
Net income
$870M
+56.8% YoY
Diluted EPS
$1.23
+59.7% YoY
Operating margin
18.0%
Overview
Danaher's second quarter of 2026 (the three months ended June 26, 2026) was a quarter where the headline numbers and the underlying business tell two different stories. Reported sales rose 5.5% to $6,265 million, and GAAP net earnings jumped 57% to $870 million ($1.23 per diluted share, up from $0.77). But almost all of that profit jump comes from a one-off charge in last year's quarter, not from a better business this year.
The cleaner read of the business is core sales growth — Danaher's measure of sales growth that strips out the effect of currency swings and of companies it recently bought, so it shows how the existing businesses grew on their own. Core sales grew 3.0% — better than the first quarter's 0.5%, but still modest. Excluding respiratory (flu/COVID) test sales, which rise and fall with how bad the flu season is, core growth was 4.5%. Adjusted EPS, which strips out acquisition accounting and one-off items, rose about 8% to $1.94.
The quarter also closed the biggest deal in years: Danaher bought monitoring-device maker Masimo on June 10, 2026 for about $9.8 billion in cash. It brought in about two weeks of sales and a batch of one-time deal costs.
Adjusted EPS, core sales and free cash flow figures are from the company's July 21, 2026 earnings release (Form 8-K Exhibit 99.1); all other figures are from the 10-Q. Prior-year core growth rates are from the release's historical table.
First half of 2026 (six months): sales $12,216M (+4.5%), core sales +2.0% (+4.0% excluding respiratory), net earnings $1,899M (+25.8%), diluted EPS $2.68 vs. $2.10, adjusted EPS $4.00 vs. $3.68, operating margin 20.2% vs. 17.4%.
Why GAAP profit jumped ~57% while the business grew ~3%
Operating margin — the share of sales left after running the business, before interest and tax — rose from 12.8% to 18.0%. The 10-Q breaks that 5.2-point swing down:
+7.3 points from the absence of last year's charge: in Q2 2025 Danaher wrote down the value of a brand name in its Life Sciences segment by $432 million. The company says that charge alone cost $0.46 per share after tax.
−1.75 points from Masimo deal costs this quarter: $108 million before tax, including a $46 million "inventory step-up" (acquisition accounting that values Masimo's inventory at a higher price, so profit on it looks lower when it's sold), plus deal fees and change-in-control payments.
−0.3 points from acquired businesses carrying lower margins in their first year.
−0.05 points from product mix and cost leverage, net of higher core sales — in other words, the underlying business contributed roughly nothing to the margin change.
Take away last year's write-down and this year's deal costs, and underlying profitability was about flat. That is why adjusted EPS grew about 8% rather than 60%. Most of that 8% came from outside the operating business: interest income rose to $61 million from $8 million on higher cash balances held ahead of the Masimo closing, and the diluted share count fell to 707.6 million from 719.1 million after buybacks. Those gains more than offset a higher tax rate (19.3% vs. 15.3%, including a $21 million one-off tax charge) and higher interest expense ($107 million vs. $71 million).
Gross margin (the share of sales left after the direct cost of making the products) fell to 57.6% from 59.3%. Management attributes this to product mix — selling relatively more lower-margin items and fewer high-margin respiratory tests — and to the Masimo inventory step-up.
Segment performance
Segment
Q2 2026 sales
Q2 2025 sales
Reported growth
Core growth
Operating margin (Q2 2026 vs. Q2 2025)
Biotechnology
$1,920M
$1,850M
+4.0%
+2.5%
29.0% vs. 28.7%
Life Sciences
$1,879M
$1,777M
+5.5%
+5.5%
13.0% vs. -13.4%
Diagnostics
$2,466M
$2,309M
+7.0%
+2.0% (+5.0% ex-respiratory)
16.9% vs. 24.0%
Biotechnology — bioprocessing slowed on shipment timing, orders strong
Bioprocessing — the equipment and single-use consumables drug makers use to manufacture biologic drugs such as antibodies — grew core sales only at a low-single-digit rate, down from mid-single digits for the first half as a whole. The 10-Q says improved consumables demand "more than offset the impact of certain large commercial customers moving the timing of shipments out of the quarter." Western Europe and North America core sales fell on "difficult prior year comparisons," while China led the growth. The earnings release adds that bioprocessing orders grew mid-teens in the quarter. Orders are future sales, so the slow quarter looks like a timing issue rather than weaker demand. The discovery and medical business grew, helped by pharma customers and what the filing calls "an improving academic and research funding environment." Segment margin edged up 30 basis points (0.3 points).
Life Sciences — the best quarter in several years
Core sales rose 5.5%, which CEO Rainer Blair called the Life Sciences businesses' "strongest quarter in several years." The biggest contributor was not lab research. It was the filtration business, on "higher demand for microelectronic and energy products" (Pall's filters used in chip-making and energy). Next came flow cytometry, lab automation and mass-spectrometry consumables, plus microscopy and mass-spec instruments. On academic and government customers — the group most exposed to US National Institutes of Health (NIH) grant funding — the 10-Q says demand "improved modestly, but remains muted overall." Pharma, biotech and applied customers kept strengthening. The margin swing from -13.4% to 13.0% is mostly last year's $432 million brand write-down (24.3 points). Higher sales added a genuine 2.1 points.
Diagnostics — Masimo arrives, respiratory testing fades, China pricing still a drag
Reported Diagnostics sales rose 7.0%, but 4 points came from acquisitions (mainly Masimo) and 1 point from currency. Core growth was 2.0%. The swing factor is Cepheid's respiratory testing (flu/COVID/RSV tests in the molecular diagnostics business). The company puts those sales at roughly $250 million, down from about $300 million a year ago, because of "a less severe respiratory season." Excluding respiratory, Diagnostics core sales grew 5.0%, led by the clinical lab business in North America and in fast-growing markets outside China.
China remains a headwind. Segment prices fell 1.5%, "primarily attributable to the volume-based procurement program in China." That is a government bulk-buying scheme that forces lower prices in exchange for volume. Diagnostics core sales declined in China. Management says that pressure "has moderated" as the business laps the biggest price cuts, which began in late 2024. Segment operating margin fell 7.1 points to 16.9%: 4.4 points from Masimo deal costs, 1.05 points from acquired businesses' lower margins, and 1.65 points from mix and cost leverage (the loss of high-margin respiratory volume).
Geography
Danaher's developed-market core sales were down slightly: a low-single-digit decline in Western Europe and a slight decline in North America. The company attributes this mainly to tough bioprocessing comparisons and lower respiratory sales. High-growth markets (about 31% of sales) grew core sales more than 10%, across all three segments and every major region. For Biotechnology, China led the growth; for Diagnostics, China was a decline.
Masimo and the balance sheet
Danaher paid about $9.8 billion ($180 per share) for Masimo, which had about $1.5 billion of 2025 revenue. About $5.0 billion of that price is recorded as goodwill, the premium over the value of the assets acquired. It funded the deal with cash, new bonds and commercial paper (short-term corporate borrowing). Total debt rose to about $26.6 billion ($1,411M current + $25,147M long-term) from $18.4 billion at year-end 2025. Cash stood at about $4.3 billion. Operating cash flow was $1,534 million and free cash flow — cash from operations minus capital spending — was $1,265 million. Danaher still spent $894 million on buybacks in the first half. Separately, Leica Biosystems agreed to buy histology-supplies maker StatLab (about $250 million of 2025 revenue), expected to close by end-2026.
Takeaway: Ignore the 60% jump in GAAP EPS — it comes from last year's $432 million write-down. The real signals are that core growth sped up to 3.0% (4.5% excluding a weak flu season) and that bioprocessing orders grew mid-teens even though shipments slipped. Those orders are what back management's call for mid-single-digit growth by year-end.
Outlook
From the earnings release, management:
Raised full-year 2026 adjusted EPS guidance to $8.45–$8.60 (from $8.35–$8.55), citing the Q2 beat and Masimo closing earlier than expected.
Kept full-year core sales growth at 3.0%–4.0%, with Biotechnology up mid-single digits, Life Sciences up 3–4%, and Diagnostics roughly flat.
Guided Q3 core growth to 2.0%–3.0%, held back by an estimated 2.5-point drag from respiratory testing (about $325 million expected vs. about $500 million in Q3 2025). Excluding respiratory, Q3 core growth is guided to about 5%.
Expects to exit 2026 at mid-single-digit core growth, with Q4 core growth guided to mid-single digits.
Guided full-year adjusted operating margin to about 26.5% and expects about $1.9 billion of acquisition-related amortization for the year — a charge that will keep GAAP EPS well below adjusted EPS.
Our read: the second half depends on three things. Bioprocessing orders need to turn into shipments. Respiratory comparisons need to ease — the company expects respiratory to stop being a drag by Q4. And Masimo needs to be integrated without further margin dilution. Q3 guidance of 2–3% core growth is below Q2's 3.0%, so the year-end acceleration is still a forecast, not something the filings show yet. Masimo also brings roughly $8 billion of extra debt; interest expense (net of interest income) is guided at about $115 million for Q3, versus $46 million in Q2. Tariffs could be a small upside: a February 2026 Supreme Court ruling struck down the IEEPA tariffs, and Danaher says it will book any refunds, less amounts owed to customers, as earnings when received. From Q3, core sales will exclude tariff refunds that are passed back to customers.
Source: Danaher Form 10-Q for the quarter ended June 26, 2026; adjusted EPS, core-growth history, respiratory sales estimates, free cash flow and guidance are from the Q2 2026 earnings release (Form 8-K Exhibit 99.1, July 21, 2026).