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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-25 · 89 added, 173 removed, 103 unchanged (72% of the section changed)

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We report fiscal years under a 52/53-week format and as a result, certain fiscal years will contain 53 weeks.

Each of the fiscal years ended December 29, 2024 (“fiscal year 2024”), December 31, 2023 (“fiscal year 2023”) and January 1, 2023 (“fiscal year 2022”) included 52 weeks.

The fiscal year ending December 28, 2025 (“fiscal year 2025”) will include 52 weeks.

Each of the fiscal years ended December 28, 2025 (“fiscal year 2025”), December 29, 2024 (“fiscal year 2024”) and December 31, 2023 (“fiscal year 2023”) included 52 weeks.

The fiscal year ending January 3, 2027 (“fiscal year 2026”) will include 53 weeks.

Overview of Fiscal Year 2025

During fiscal year 2024, we again delivered differentiated financial performance despite market headwinds, demonstrating the strength of our product portfolio and innovation.

Our overall revenue in fiscal year 2024 increased by $4.5 million, or less than 1%, as compared to fiscal year 2023, reflecting an increase of $42.7 million, or 3%, in Diagnostics segment revenue and a decrease of $38.2 million, or 3%, in Life Sciences segment revenue.

The increase in Diagnostics segment revenue was primarily driven by increased demand in our immunodiagnostics and reproductive health businesses, partially offset by a decrease in revenue from our applied genomics business.

The decrease in Life Sciences segment revenue was driven by a decrease in instruments and reagents revenue due to pharmaceutical and biotechnology market headwinds, partially offset by an increase in software revenue from the timing of contract renewals and new orders.

Our consolidated gross margin decreased 16 basis points in fiscal year 2024, as compared to fiscal year 2023, primarily due to an unfavorable shift in product mix and higher product costs, partially offset by pricing actions and productivity initiatives.

Our consolidated operating margin increased 166 basis points in fiscal year 2024, as compared to fiscal year 2023, due to productivity initiatives and cost containment.

Our overall revenue in fiscal year 2025 increased by $101.1 million, or 4%, as compared to fiscal year 2024, reflecting an increase of $68.5 million, or 5%, in Diagnostics segment revenue and an increase of $32.5 million, or 2%, in Life Sciences segment revenue.

The increase in our Diagnostics segment revenue was driven by both our Immunodiagnostics and Reproductive Health businesses.

The increase in our Life Sciences segment revenue was driven by our Software business.

Our consolidated gross margin decreased 104 basis points in fiscal year 2025, as compared to fiscal year 2024, primarily due to increased tariffs, unfavorable changes in foreign exchange rates, and product mix shift, partially offset by the completion of product rebranding efforts in fiscal year 2024.

Our consolidated operating margin decreased 10 basis points in fiscal year 2025, as compared to fiscal year 2024, due to gross margin headwinds, as discussed above , partially offset by productivity and cost containment initiatives.

Overall, we believe that our range of product offerings, leading market positions, global scale and financial strength provides us with a foundation for continued long-term growth, margin expansion and robust cash flow generation.

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Fiscal Year 2025 Compared to Fiscal Year 2024

Revenue for fiscal year 2024 was $2,755.0 million, as compared to $2,750.6 million for fiscal year 2023, an increase of $4.5 million, or less than 1%.

Revenue for fiscal year 2025 was $2,856.1 million, as compared to $2,755.0 million for fiscal year 2024, an increase of $101.1 million, or 4%, which includes an approximate 1% increase in revenue attributable to favorable changes in foreign exchange rates.

The analysis in the remainder of this paragraph compares segment revenue for fiscal year 2025 as compared to fiscal year 2024 and includes the effect of foreign exchange rate fluctuations.

Life Sciences segment revenue was $1,254.1 million for fiscal year 2024, as compared to $1,292.3 million for fiscal year 2023, a decrease of $38.2 million, or 3%, driven by a decrease of $47.2 million in instruments revenue and a decrease of $13.5 million in reagents revenue, partially offset by an increase of $22.5 million in software revenue.

Diagnostics segment revenue for fiscal year 2024 was $1,500.9 million, as compared to $1,458.2 million for fiscal year 2023, an increase of $42.7 million, or 3%, due to an increase of $43.7 million in immunodiagnostics revenue and an increase of $22.6 million in reproductive health revenue, partially offset by a decrease of $23.7 million in applied genomics revenue.

As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.8 million of revenue for each of the fiscal years 2024 and 2023 that otherwise would have been recorded by the acquired businesses during each of the respective periods.

Life Sciences segment revenue was $1,431.1 million for fiscal year 2025, as compared to $1,398.6 million for fiscal year 2024, an increase of $32.5 million, or 2%, driven by an increase of $35.6 million in Software revenue, partially offset by a decrease of $3.1 million in Life Sciences Solutions revenue.

Diagnostics segment revenue for fiscal year 2025 was $1,424.9 million, as compared to $1,356.4 million for fiscal year 2024, an increase of $68.5 million, or 5%, due to an increase of $41.3 million in Immunodiagnostics revenue and an increase of $27.2 million in Reproductive Health revenue.

Cost of Revenue

Cost of revenue for fiscal year 2025 was $1,291.7 million, as compared to $1,217.4 million for fiscal year 2024, an increase of approximately $74.3 million, or 6%.

As a percentage of revenue, cost of revenue increased to 44.2% in fiscal year 2024 from 44.0% in fiscal year 2023, resulting in a decrease in gross margin of approximately 16 basis points to 55.8% in fiscal year 2024 from 56.0% in fiscal year 2023 due to an unfavorable shift in product mix and higher product costs, partially offset by pricing actions and productivity initiatives.

As a percentage of revenue, cost of revenue increased to 45.2% in fiscal year 2025 from 44.2% in fiscal year 2024, resulting in a decrease in gross margin of approximately 104 basis points to 54.8% in fiscal year 2025 from 55.8% in fiscal year 2024, primarily due to increased tariffs, unfavorable changes in foreign exchange rates and product mix shift, partially offset by the completion of product rebranding efforts in fiscal year 2024.

Rebranding costs were $6.2 million for fiscal year 2024.

Stock compensation expense related to awards given to BioLegend employees post-acquisition added an incremental expense of $0.6 million for fiscal year 2024, as compared to $2.8 million for fiscal year 2023.

Stock compensation expense related to awards given to BioLegend employees

post-acquisition added an incremental expense of $0.6 million for fiscal year 2024.

Amortization of intangible assets was $141.1 million for fiscal year 2025, as compared to $144.4 million for fiscal year 2024.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for fiscal year 2024 were $994.1 million, as compared to $1,022.6 million for fiscal year 2023, a decrease of $28.5 million, or 3%.

Tariffs enacted and implemented during fiscal year 2025 increased our cost of revenue by approximately $25 million.

Through proactive mitigation efforts, the net impact on gross margin was approximately $20 million.

The majority of this impact affected products manufactured in Europe and sold in the U.S.

Our comprehensive mitigation strategy included manufacturing optimization, supplier collaboration, selective pricing adjustments, and targeted temporary cost measures to minimize ongoing financial exposure.

Selling, G eneral and Administrative Expenses

Selling, general and administrative expenses for fiscal year 2025 were $991.9 million, as compared to $994.1 million for fiscal year 2024, a decrease of $2.2 million, or less than 1%.

As a percentage of revenue, selling, general and administrative expenses decreased to 34.7% in fiscal year 2025 from 36.1% in fiscal year 2024.

Amortization of intangible assets decreased and was $194.5 million for fiscal year 2025, as compared to $215.0 million for fiscal year 2024.

Restructuring and other costs, net, decreased and were $17.5 million for fiscal year 2024, as compared to $26.6 million for fiscal year 2023.

Acquisition and divestiture-related expenses, which primarily consisted of legal and integration costs, and stock compensation expense related to the awards given to BioLegend employees post-acquisition, added an incremental expense of $16.3 million for fiscal year 2024, as compared to $62.0 million for fiscal year 2023.

Purchase accounting adjustments decreased expenses by $1.7 million for fiscal year 2024, which primarily consisted of a change in fair value of contingent consideration, as compared to increasing expenses by $4.3 million for fiscal year 2023.

Costs for significant environmental matters also added an incremental expense of $2.5 million for fiscal year 2023.

The above decreases were partially offset by an increase in asset impairments, which added an incremental expense of $22.8 million for fiscal year 2024.

Significant litigation matters and settlements added an incremental expense of $7.8 million for fiscal year 2024 and were minimal for fiscal year 2023.

Excluding the factors above, the net decrease in selling, general and administrative expenses was the result of productivity initiatives and cost containment.

Acquisition and divestiture-related expenses, which primarily consisted of legal and integration costs, were $3.8 million for fiscal year 2025.

Costs for significant environmental matters decreased expenses by $1.2 million for fiscal year 2025.

Asset impairment was $22.8 million for fiscal year 2024.

The above decreases were partially offset by an increase in restructuring and other costs, net, which was $55.9 million for fiscal year 2025, as compared to $17.5 million for fiscal year 2024.

Restructuring and other costs, net in fiscal year 2025 primarily included charges associated with workforce reductions and facility consolidations in an effort to streamline operations, other exit costs, abandonments or associated asset write-downs, costs of terminating certain lease agreements or contracts, as well as costs associated with relocating facilities.

In fiscal year 2025, severance actions associated with facility consolidations and cost reduction measures affected approximately 5% of our workforce.

S ignificant litigation matters and settlements was $12.2 million for fiscal year 2025 , as compared to $7.8 million for fiscal year 2024 .

Transformation costs were $9.3 million for fiscal year 2025 .

Purchase accounting adjustments decreased expenses by $0.5 million for fiscal year 2025, as compared to $1.7 million for fiscal year 2024, which primarily consisted of a change in fair value of contingent consideration.

Excluding the items noted above, selling, general and administrative expenses increased slightly due to unfavorable changes in foreign exchange rates and investments in digital capabilities and innovation mostly o ffset by lower long-term incentive compensation costs, cost control and productivity initiatives.

Research and Development Expenses

Research and development expenses for fiscal year 2024 were $196.8 million, as compared to $216.6 million for fiscal year 2023, a decrease of $19.7 million, or 9%.

As a percentage of revenue, research and development expenses decreased to 7.1% in fiscal year 2024 from 7.9% in fiscal year 2023.

The decrease in research and development expenses was primarily driven by productivity initiatives and cost containment, as well as a decrease in stock compensation expense related to awards given to BioLegend employees post-acquisition, which added an incremental expense of $2.2 million in fiscal year 2024, as compared to $4.3 million for fiscal year 2023.

Research and development expenses for fiscal year 2025 were $215.8 million, as compared to $196.8 million for fiscal year 2024, an increase of $19.0 million, or 10%.

As a percentage of revenue, research and development expenses increased to 7.6% in fiscal year 2025 from 7.1% in fiscal year 2024.

The increase in research and development expenses was primarily driven by unfavorable changes in foreign exchange rates and our investments in new product development.

Stock compensation expense related to awards given to BioLegend employees post-acquisition was $2.2 million for fiscal year 2024.

Interest and Other Expense, Net

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Total interest and other expense, net $ 88,358 $ 30,615

Interest income increased due to an increase in short-term investments and higher interest rates.

Interest expense decreased primarily due to lower debt balance as a result of the repayment of senior unsecured notes that matured in September 2023 and September 2024.

Change in fair value of investments resulted in income of $8.0 million in fiscal year 2024 as compared to expense of $33.9 million in fiscal year 2023 primarily due to the fluctuation in share price of investments in marketable securities, partially offset by fair value changes in notes receivables and other investments.

Other components of net periodic pension cost decreased primarily due to increases in applicable discount rates.

Foreign exchange losses and other expense, net, was lower during fiscal year 2024 as compared to the same period in the prior year primarily due to a foreign exchange loss of $24.0 million that was recognized in fiscal year 2023 related to the cash proceeds from the sale of the Business

that were held offs hore.

The decrease in interest income for the fiscal year 2025 as compared to the fiscal year 2024 was primarily due to a decrease in marketable securities and short-term investments.

Interest expense was lower for the fiscal year 2025 as compared to prior year primarily due to a lower debt balance as a result of the repayment of senior unsecured notes that matured in September 2024.

A more complete discussion of our liquidity is set forth below under the heading “Liquidity and Capital Resources.”

Provision for Income Taxes

The effective tax rates were 10.5% and 1.9% for fiscal years 2024 and 2023, respectively.

A reconciliation of income tax expense at the U.S.

federal statutory income tax rate to the recorded tax provision is as follows for the fiscal years ended:

2024 December 31,

(In thousands)

Tax at statutory rate $ 66,386 $ 38,346

rate differential, net (13,332) (18,479)

taxation of multinational operations (28,879) (4,594)

State income taxes, net 2,174 (265)

Impact of rate changes — (12,795)

Prior year tax matters (9,389) 3,971

Effect of stock compensation 2,960 2,225

General business tax credits (17,634) (4,718)

Transfer pricing matters (2,391) (6,725)

Change in valuation allowance 29,781 6,772

Effect of foreign repatriations 5,329 (4,737)

Other, net (1,950) 4,472

Total $ 33,055 $ 3,473

The variation in our effective tax rate from the statutory rate for fiscal year 2024 was primarily the result of general business tax credits of $17.6 million, a prior year true-up related to the tax on foreign earnings of approximately $9.4 million, and favorability in our U.S.

Our effective tax rates were 10.6% and 10.5% for fiscal years 2025 and 2024, respectively.

The variation in our effective tax rate from the statutory rate for fiscal year 2025 was primarily impacted by federal tax credits of $24.0 million, and the net benefits of U.S.

international tax regimes of $6.6 million, partially offset by $2.7 million of other items.

The variation in our effective tax rate from the statutory tax rate for fiscal year 2024 was primarily the result of general business tax credits of $17.6 million, a prior year true-up related to the tax on foreign earnings of approximately $9.4 million, and favorability in our U.S.

taxation of multinational operations of $28.9 million , which were partially offset by an increase in valuation allowance of $29.8 million .

The variation in our effective tax rate from the statutory tax rate for fiscal year 2023 was primarily the result of a favorable ruling from a foreign tax authority of approximately $15.2 million, a prior year true-up related to the tax on foreign earnings of approximately $7.0 million, and a benefit for the state tax rate change on deferred taxes of $12.8 million, which were partially offset by an increase in tax reserves of approximately $33.2 million in respect of unfavorable developments with respect to an uncertain tax position with a foreign tax authority that was partially related to continuing operations.

Fiscal Year 2024 Compared to Fiscal Year 2023

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Fiscal Year 2025 Compared to Fiscal Year 2024

Revenue for fiscal year 2024 was $1,254.1 million, as compared to $1,292.3 million for fiscal year 2023, a decrease of $38.2 million, or 3% .

The decrease in our Life Sciences segment revenue was driven by a decrease of $47.2 million in instruments revenue and a decrease of $13.5 million in reagents revenue, partially offset by an increase of $22.5 million in software revenue.

Revenue for fiscal year 2025 was $1,431.1 million, as compared to $1,398.6 million for fiscal year 2024, an increase of $32.5 million, or 2% , which includes an approximate 1% increase in revenue attributable to favorable changes in foreign exchange rates.

The increase in our Life Sciences segment revenue was driven by an increase of $35.6 million in Software revenue, partially offset by a decrease of $3.1 million in Life Sciences Solutions revenue.

Segment operating income for fiscal year 2025 was $458.3 million, as compared to $467.3 million for fiscal year 2024, a decrease of $9.0 million, or 2%.

Segment operating margin decreased 214 basis points in fiscal year 2024, as compared to fiscal year 2023, primarily due to lower volume and continued investments in new product development, digital capabilities and growth initiatives, partially offset by pricing actions and productivity initiatives.

Segment operating margin decreased 139 basis points to 32.0% in fiscal year 2025, as compared to 33.4% in fiscal year 2024, primarily due to unfavorable changes in volume leverage and foreign exchange rates, product mix shifts and investments in new product development and digital capabilities.

Fiscal Year 2024 Compared to Fiscal Year 2023

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Fiscal Year 2025 Compared to Fiscal Year 2024

Revenue for fiscal year 2024 was $1,500.9 million, as compared to $1,458.2 million for fiscal year 2023, an increase of $42.7 million, or 3%, which includes an approximate 1% decrease in revenue attributable to unfavorable changes in foreign exchange rates.

T he increase in our Diagnostics segment revenue during fiscal year 2024 was due to an increase of $43.7 million in immunodiagnostics revenue and an increase of $22.6 million in reproductive health revenue, partially offset by a decrease of $23.7 million in applied genomics revenue.

Segment operating income for fiscal year 2024 was $372.4 million, as compared to $320.1 million for fiscal year 2023, an increase of $52.3 million, or 16%.

Segment operating margin increased 286 basis points in fiscal year 2024, as compared to fiscal year 2023, primarily due to higher v olume, productivity initiatives, and cost containment.

Revenue for fiscal year 2025 was $1,424.9 million, as compared to $1,356.4 million for fiscal year 2024, an increase of $68.5 million, or 5%, which includes an approximate 1% increase in revenue attributable to favorable changes in foreign exchange rates.

The increase in our Diagnostics segment revenue dur ing fiscal year 2025 was due to an increase of $41.3 million in immunodiagnostics revenue and an increase of $27.2 million in reproductive health revenue.

Segment operating income for fiscal year 2025 was $344.2 million, as compared to $353.9 million for fiscal year 2024, a decrease of $9.8 million, or 3%.

Segment operating margin decreased 194 basis points to 24.2% in fiscal year 2025, as compared to 26.1% in fiscal year 2024, primari ly due to increased tariffs, unfavorable changes in foreign exchange rates, and product mix shift due to China diagnostic testing policy changes.

Fiscal Year 2024 Compared to Fiscal Year 2023

For a discussion of our results of operations for fiscal year 2024 as compared to fiscal year 2023, see Item 7, 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 29, 2024 filed with the Securities and Exchange Commission on February 25, 2025.

Discontinued Operations

On March 13, 2023, we completed the sale (the “Closing”) of certain assets and the equity interests of certain entities constituting our Applied, Food and Enterprise Services businesses (the “Business”) to PerkinElmer Topco, L.P.

(formerly known as Polaris Purchaser, L.P.) (the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C.

(the “Sponsor”), for an aggregate purchase price of up to $2.45 billion .

We received approximately $2.27 billion in cash proceeds before transaction costs.

At the Closing, we were entitled to an additional $75.0 million in proceeds payable in installments to commence upon our ceasing the use of the PerkinElmer brand and related trademarks and transferring them to the Purchaser (the “Brand Fee”).

The discounted value of the $75.0 million was measured as $65.2 million and was included in the proceeds at Closing.

During the fiscal year 2024, we received $18.8 million of the Brand Fee.

We expect to receive the remaining balance of the Brand Fee i n installments in 2025.

In addition, we are entitled to additional consideration of up to $150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business.

The fair value of this element of consideration was determined to be $15.9 million and was included in the proceeds at Closing.

During fiscal year 2024, we received approximately $138.5 million of cash from the Purchaser and recognized a loss of $19.8 million primarily related to post-closing adjustments.

The Business is reported for all pe riods as discontinued operations in our consolidated financial statements.

The following table summarizes the results of discontinued operations which are presented as income from discontinued operations in our consolidated statements of operations:

December 29, 2024 December 31, 2023 January 1, 2023

(In thousands)

Revenue $ — $ 176,324 $ 1,298,376

Cost of revenue — 125,219 859,330

Selling, general and administrative expenses — 78,613 306,032

Research and development expenses — 10,434 64,605

Operating (loss) income — (37,942) 68,409

Other (loss) income:

(Loss) gain on sale (25,448) 811,472 —

Other (expense) income, net — (49) 5,195

Total other (loss) income (25,448) 811,423 5,195

(Loss) income from discontinued operations before income taxes (25,448) 773,481 73,604

(Benefit from) provision for income tax (12,762) 259,890 17,101

(Loss) income from discontinued operations $ (12,686) $ 513,591 $ 56,503

The results of discontinued operations during fiscal year 2023 include the results of the Business through March 13, 2023.

During fiscal year 2024, we recognized $25.4 million of other expense primarily due to the adjustment to the receivable related to the post-closing adjustment and divestiture-related costs in gain on sale.

During fiscal year 2023 we recognized $37.1 million of divestiture-related costs incurred after the Closing in gain on sale and $36.0 million of d ivestiture-related costs incurred prior to Closing in selling, general and administrative expenses in discontinued operations.

For a discussion of our discontinued operations for fiscal year 2023 as compared to fiscal year 2022, see Item 7, 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, 2023 filed with the Securities and Exchange Commission on February 27, 2024.

Liquidity and Capital Resources

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We anticipate that our internal operations will generate sufficient cash to fund our operating expenses, capital expenditures, acquisitions, interest payments on our debt and dividends on our common stock, for the foreseeable future, including at least the next 12 mo nths.

The sale of the Business generated approximately $2.27 billion in cash proceeds.

We expect to continue to use these proceeds for a combination of debt retirement, opportunistic share r epurchases and continued strategic and value creating acquisitions.

Fiscal Year 2025 Compared to Fiscal Year 2024

Operating Activities.

Net cash provided by continuing operations was $665.0 million for fiscal year 2024, as compared to $279.4 million for fiscal year 2023, an increase of $385.6 million, primarily due to higher income from continuing operations and less cash used to fund working capital during fiscal year 2024 as compared to fiscal year 2023.

The cash provided by operating activities for fiscal year 2024 was principally a result of income from continuing operations of $283.1 million, adjustments for non-cash charges aggregating to $400.2 million, including depreciation and amortization of $427.8 million, and a net cash decrease in working capital of $18.3 million.

The cash provided by operating activities for fiscal year 2023 was principally a result of income from continuing operations of $179.5 million, adjustments for non-cash charges aggregating to $491.2 million, including depreciation and amortization of $431.8 million, and a net cash decrease in working capital of $391.3 million.

Contingent consideration payments of $6.1 million during fiscal year 2024 as compared to $0.6 million during fiscal year 2023 were included in cash flows from operating activities.

Net cash provided by continuing operations was $589.0 million for fiscal year 2025, as compared to $665.0 million for fiscal year 2024, a decrease of $76.0 million.

The cash provided by operating activities for fiscal year 2025 was principally a result of income from continuing operations of $239.9 million, adjustments for non-cash charges aggregating to $445.9 million, including depreciation and amortization of $405.3 million, and a net cash decrease from changes in working capital of $96.8 million, primarily due to timing of collections in China during fiscal year 2025.

The cash provided by operating activities for fiscal year 2024 was principally a result of income from continuing operations of $283.1 million, adjustments for

non-cash charges aggregating to $400.2 million, including depreciation and amortization of $427.8 million, and a net cash decrease from changes in working capital of $18.3 million.

Investing Activities.

Net cash provided by the investing activities of our continuing operations was $619.3 million for fiscal year 2024, as compared to a $761.2 million net cash usage for fiscal year 2023, an increase of $1,380.5 million.

During fiscal year 2024, proceeds from maturity of U.S.

treasury securities were $710.0 million and proceeds from investments and notes receivables were $2.5 million.

The cash provided by investing activities during fiscal year 2024 was partially offset by net

cash used for capital expenditures of $86.6 million, as compared to $81.4 million for fiscal year 2023.

Net cash used in the investing activities of our continuing operations was $73.6 million for fiscal year 2025, as compared to net cash provided by investing activities of $619.3 million for fiscal year 2024, a decrease of $692.9 million primarily due to the proceeds from the maturity of U.S.

treasury securities of $710.0 million d uring fiscal year 2024.

During the fiscal year 2025, net cash used for capital expenditures was $73.5 million , as compared to $86.6 million for fiscal year 2024 .

During fiscal year 2025 , purchases of investments and notes receivables were $0.4 million , as compared to $6.6 million for fiscal year 2024.

During fiscal year 2023, purchases of investments in U.S.

treasury securities amounted to $1.2 billion, and net cash used for acquisitions was $2.1 million, which were partially offset by proceeds from maturity of U.S.

treasury securities totaling $550.0 million.

Financing Activities.

Net cash used in financing activities was $1,128.2 million for fiscal year 2024, as compared to $947.1 million for fiscal year 2023, an increase of $181.1 million.

During fiscal year 2024, we made net payments of $723.1 million on debts, as compared to $517.5 million during fiscal year 2023.

Net cash used in financing activities was $857.5 million for fiscal year 2025, as compared to $1,128.2 million for fiscal year 2024, a decrease of $270.7 million.

During fiscal year 2025, we repurchased shares of our common stock for a total cost of $820.8 million, as compared to $369.6 million in fiscal year 2024.

We paid $32.8 million in dividends for fiscal year 2025, as compared to $34.5 million in fiscal year 2024.

We paid $8.8 million for acquisition-related contingent consideration during fiscal year 2024, as compared to $10.1 million in the prior year period.

During fiscal year 2025, we made net payments of $3.0 million on debts, as compared to $723.1 million during fiscal year 2024.

We paid $3.8 million for acquisition-related contingent consideration during fiscal year 2025, as compared to $8.8 million in fiscal year 2024.

The cash used in financing activities during fiscal year 2025 was partially offset by proceeds from the issuance of common stock under our stock plans of $2.9 million during fiscal year 2025, as compared to $7.7 million in fiscal year 2024.

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Borrowing Arrangements

During fiscal year 2024, we paid in full $711.5 million of outstanding 0.850% Senior Unsecured Notes that became due in September 2024 (the “ 2024 Notes ” ).

During fiscal year 2024, we received proceeds of $710.0 million upon the maturity of all our outstanding U.S.

Treasury securities and utilized those proceeds to partially repay the outstanding 2024 Notes.

Our outstanding €500,000 Principal 1.875% Senior Unsecured Notes due in 2026 (“2026 Notes”) will mature in July 2026.

We expect to repay the 2026 Notes with our existing cash on hand or borrowings under our senior unsecured revolving credit facility, or a combination thereof.

In addition, o n January 7, 2025, our prior senior unsecured revolving credit facility was cancelled and replaced with a new senior unsecured revolving credit facility with a five-year term and a borrowing capacity of $1.5 billion available through January 7, 2030.

See Note 12, Debt, in the Notes to Consolidated Financial Statements for a detailed discussion of our borrowing arrangements.

Our Board of Directors (our “Board”) declared a regular quarterly cash dividend of $0.07 per share in each quarter of fiscal years 2025, 2024 and 2023, resulting in an annual dividend rate of $0.28 per share.

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On January 26, 2026, we announced that our Board had declared a quarterly dividend of $0.07 per share for the first quarter of fiscal year 2026 that will be payable in May 2026.

In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conser ve capital resources.

In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.

Capital Expenditures

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At December 28, 2025, we had cash and cash equivalents of $919.9 million, of which $463.0 million was held by our non-U.S.

subsidiaries, and we had $1.5 billion of borrowing capacity available under our senior unsecured revolving credit facility.

subsidiaries, and we had $1.5 billion of borrowing capacity available under our senior unsecured revolving credit

We use a variety of cash redeployment and financing strategies to ensure that our worldwide cash is available in the locations in which it is neede d.

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federal level and/or that would be claimed for a dividend received deduction if repatriated.

In connection with the sale of the Business, we expect to receive the remaining balance related to the Brand Fee of $56.3 million as of December 29, 2024, in installments through fiscal year 2025.

On April 27, 2023, our Board authorized us to repurchase shares of common stock for an aggregate amount up to $600.0 million under a stock repurchase program (the “Repurchase Program”).

On October 24, 2024, our Board authorized us to repurchase shares of common stock for an aggregate amount up to $1.0 billion under a stock repurchase program (the “Repurchase Program”).

On October 23, 2025, the Repurchase Program was terminated by our Board and our Board authorized us to repurchase shares of common stock for an aggregate amount up to $1.0 billion under a new stock repurchase program (the “New Repurchase Program”).

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We and our subsidiaries may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.

Principal factors that could affect the availability of our internally generated funds include:

• changes in sales due to weakness in markets in which we sell our products and services, and

• changes in our working capital requirements and capital expenditures.

Principal factors that could affect our ability to obtain cash from external sources include:

• financial covenants contained in the financial instruments controlling our borrowings that limit our total borrowing capacity,

• increases in interest rates applicable to our outstanding variable rate debt,

• a ratings downgrade that could limit the amount we can borrow under our senior unsecured revolving credit facility and our overall access to the corporate debt market,

• increases in interest rates or credit spreads, as well as limitations on the availability of credit, that affect our ability to borrow under future potential facilities on a secured or unsecured basis,

• a decrease in the market price for our common stock, and

• volatility in the public debt and equity markets.

Effects of Recently Issued and Adopted Accounting Pronouncements

See Note 1, Nature of Operations and Accounting Policies, in the Notes to Consolidated Financial Statements for a summary of recently issued accounting pronouncements.

We adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”) during fiscal year 2024 and have included the additional disclosures related to the reportable segments in Note 21, Industry Segment and Geographic Area Information, in the Notes to Consolidated Financial Statements .

We adopted Accounting Standards Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”) during fiscal year 2025 and have applied the guidance on a prospective basis, as disclosed in Note 6, Income Taxes, in the Notes to Consolidated Financial Statements .

The adoption did not have a material impact on the financial statements.

We are in the process of determining the impact of the recently issued accounting pronouncements that have not yet been adopted in our consolidated financial statements.

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We believe the following critical accounting policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements.

Divestitures:

As part of our continuing efforts to focus on higher growth opportunities, we have disposed of or sold certain businesses.

In accounting for such transactions, we apply the applicable accounting guidance under U.S.

GAAP pertaining to discontinued operations and disposals of components of an entity.

When the discontinued operations represented a strategic shift that will have a major effect on our operations and financial statements, we accounted for these businesses as discontinued operations.

We recognize divestiture-related costs that are not part of divestiture consideration as general and administrative expense as they are incurred.

These costs typically include transaction and disposal costs, such as legal, accounting, and other professional fees.

The accounting for divestiture requires estimates and judgment as to the determination of the gain or loss on sale and the fair value of the different elements of consideration received.

We received cash proceeds of $2.27 billion and we are entitled to two elements of additional consideration that become payable upon the resolution of certain events.

First, we are entitled to proceeds of $75.0 million as consideration for our ceasing the use of the PerkinElmer brand and related trademarks and transferring them to the Purchaser (“Brand Sale”).

During the fiscal year 2024, we received $18.8 million of the Brand Fee.

The remaining consideration is expected to be received in installments through fiscal year 2025.

We are also entitled to proceeds of up to $150.0 million that is contingent on the proceeds that the Purchaser and its affiliates receive on a subsequent sale or other capital event related to the Business (“Contingent Gain”).

The recognition of the future payment related to the Brand Sale and Contingent Gain to the gain on sale and the fair value assigned to the Contingent Gain, are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.

In deriving the fair value of the Contingent Gain, we utilized a lattice model, which incorporates one or more of the following key assumptions:

(1) simulated equity value from the valuation date through the expected liquidity event, (2) volatility based on guideline public companies, (3) expected term to a liquidity event, and (4) risk-free rates.

If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements could result in the recognition of additional consideration which would increase the gain on sale or impairment of the receivable from the Purchaser.

The fair value of contingent consideration is remeasured each period based on relevant information and changes to the fair value are included in the operating results from continuing operations for the period.

We periodically review the carrying value of our goodwill, based, in part, upon current estimates of fair values and our projections of anticipated future cash flows.

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If the carrying value of the reporting unit exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of goodwill.

During the fourth quarter of fiscal year 2024, we voluntarily changed our annual goodwill impairment testing date from the later of January 1 or the first day of each fiscal year to the later of November 1 or the first day of our eleventh fiscal month of each fiscal year.

We changed the measurement date to more closely align the annual impairment testing date with the most current information from the budgeting and strategic planning process.

We believe the change in goodwill impairment testing date does not represent a material change to our method of applying the accounting principle in light of our internal controls and requirements to assess goodwill impairment upon certain triggering events.

This change was applied prospectively and therefore, we performed our annual impairment testing for our reporting units for fiscal year 2024 as of January 1, 2024 and November 1, 2024.

O ur annual goodwill impairment testing date is the later of November 1 or the first day of our eleventh fiscal month of each fiscal year.

We have identified six reporting units and consistently emplo y the income approach to estimate the current fair value when testing for impairment of goodwill.

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The income approach is sensitive to changes in revenue growth rates and the discount rates.

As of the November 1, 2024 impairment testing, the fair value of each of our reporting units substantially exceeded the respective carrying value of each reporting unit with the exception of the Life Sciences reporting unit.

The Life Sciences reporting unit, which had a goodwill balance of $4,332.5 million at December 29, 2024, had a fair value that exceeded its carrying value by more than 10% but less than 20% as of the November 1, 2024 impairment testing date.

While we believe that our estimates used in measuring fair value are reasonable, if actual results differ from the estimates and judgments used, including estimates of future revenue growth and volatility in discount rate, impairment charges may be incurred in the future.

Post-retirement benefits:

We sponsor both funded and unfunded U.S.

defined benefit pension plans and other post-retirement benefits.

Retirement and post-retirement benefit plans are a significant cost of doing business, and

represent obligations that will be ultimately settled far in the future, and therefore are subject to estimation.

Retirement and post-retirement benefit plan expenses are allocated to cost of revenue, research and development, and selling, general and administrative expenses, in our consolidated statements of operations.

We immediately recognize actuarial gains and losses in operating results in the year in which the gains and losses occur.

Actuarial gains and losses are measured annually as of the calendar month-end that is closest to our fiscal year end and accordingly will be recorded in the fourth quarter, unless we are required to perform an interim remeasurement.

We recognized total costs of $9.3 million in fiscal year 2024 and $20.2 million in fiscal year 2023, for our retirement and post-retirement benefit plans, which include the charge for the mark-to-market adjustment for the benefit plans.

The loss related to the mark-to-market adjustment on benefit plans was $1.0 million in fiscal year 2024 and $9.9 million in fiscal year 2023.

It is difficult to reliably calculate and predict whether there will be a mark-to-market adjustment in fiscal year 2025.

Mark-to-market adjustments are often driven by events and circumstances beyond our control, but primarily relate to changes in interest rates and actual return on investments on plan assets.

To the extent the discount rates decrease or the value of our plan assets decrease, mark-to market losses will be recognized.

Conversely, to the extent the discount rates increase or the value of our plan assets increase more than expected, mark-to market gains will be recognized.

If the discount rate used to measure the pension obligations were to change as of December 29, 2024, our pension plan expenses would also change as follows:

Increase (Decrease) at

December 29, 2024

Percentage Point Change Non-U.S.

Pension plans discount rate +0.25 $(5,986) $(1,686)

-0.25 6,280 1,747

As of the November 3, 2025 impairment testing, the fair value of each of our reporting units substantially exceeded the respective carrying value of each reporting unit with the exception of the Life Sciences Solutions reporting unit.

The Life Sciences Solutions reporting unit, which had a goodwill balance of $4.5 billion at December 28, 2025, had a fair value that exceeded its carrying value by more than 10% but less than 20% as of the November 3, 2025 impairment testing date.

While we believe that our estimates used in measuring fair value are reasonable, if actual results differ from the estimates and judgments used, including estimates of future revenue growth and selection of discount rate, impairment charges may be incurred in the future.

Income taxes:

Significant judgment is required in determining our worldwide provision for income taxes and recording the related tax assets and liabilities.

In the ordinary course of our business, there are operational decisions, transactions, facts and circumstances, and calculations for which the ultimate tax determination is not certain.

Furthermore, our tax positions are periodically subject to challenge by taxing authorities throughout the world.

We provide reserves for potential payments of tax to various tax authorities related to uncertain tax positions.

These reserves are based on a determination of whether a tax benefit taken by the Company in its tax filings is more likely than not to be sustained upon audit based on its technical merits.

The tax benefit recognized is measured as the largest amount that is more likely than not to be realized upon ultimate settlement.

We regularly review our tax positions in each significant taxing jurisdiction and adjustments are made to our unrecognized tax benefits when:

(i) facts and circumstances regarding a tax position change, causing a change in our judgment regarding that tax position;

(ii) a tax position is effectively settled with a tax authority at a differing amount;

and/or (iii) the statute of limitations expires regarding a tax position.

Any significant impact as a result of changes in underlying facts, law, tax rates, tax audit, or review could lead to adjustments to one or more of our income tax expense, our effective tax rate, or our cash flow, see Note 6, Income Taxes, in the Notes to the Financial Statements.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases.

This method also requires the recognition of future tax benefits such as net operating loss carryforwards and tax credits, to the extent that realization of such benefits is more likely than not.

We have established valuation allowances against a variety of deferred tax assets, including state net operating loss carryforwards, state income tax credit carryforwards, and certain foreign tax attributes.

Valuation allowances take into consideration our ability to utilize these deferred tax assets and reduce the value of such items to the amount that is deemed more likely than not to be recoverable.

In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and results of recent operations.

In projecting future taxable income, we begin with historical results adjusted for non-recurring income and expense and incorporate assumptions and judgments about the future pretax operating income adjusted for items that do not have tax consequences.

These assumptions about future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying business.

Changes in our assumptions regarding the appropriate amount for valuation allowances could result in an increase or decrease in t he valuation allowance, with a corresponding charge or benefit to our tax provision.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis