{"schemaVersion":1,"research":true,"symbol":"tmo","name":"Thermo Fisher Scientific","topic":"moat","path":"/stock/tmo/moat","status":"stale","version":7,"updatedAt":"2026-10-19T15:41:48.440Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"uncertain","summary":"Thermo Fisher demonstrates demand for differentiated instruments, multiyear customer commitments, historical pricing realization and repeated productivity gains. These establish current operating strengths, but the supplied passages do not establish durable switching barriers, protected technological superiority or a cost advantage over rivals. Pricing strength is demonstrated historically; its recent magnitude remains unclear. Insufficient moat evidence does not establish a weak competitive position.","advantages":[{"mechanism":"switching_costs","claim":"Multiyear manufacturing, clinical research and warranty commitments establish continuing customer relationships. Integrated services and procurement standardization could increase switching friction, but actual replacement costs and customer lock-in are not demonstrated.","durability":"Relevant service agreements typically last three to five years. This supports contractual visibility, without establishing renewal durability or barriers beyond the contract.","risks":"Service quality failures, customer substitution and competition could weaken relationships. Cancellation rights and renewal outcomes are not supplied.","invalidation":"The switching-cost hypothesis would be undermined by customers routinely transferring comparable projects or workflows without material disruption, or by sustained deterioration in renewals and customer allegiance.","competitors":[],"evidenceIds":["e1","e2","e3","e4","e5"],"counterEvidenceIds":["e6","e7"]},{"mechanism":"intangible_assets","claim":"Specialized instruments and associated intellectual property support differentiated offerings. Instrument demand and historical pricing realization demonstrate commercial value, but protected superiority over competing technologies is unestablished.","durability":"Demand strength appears in 2023 and the second quarter of 2026. Continued innovation is necessary; patent disclosures do not establish the duration or exclusivity of commercially decisive technologies.","risks":"Changing technologies, competing price/performance improvements and intellectual-property challenges could erode differentiation. First-quarter 2026 instrument weakness demonstrates funding and demand sensitivity rather than proven competitive displacement.","invalidation":"The differentiation hypothesis would be undermined by sustained customer migration to equivalent alternatives, repeated price concessions to maintain instrument demand, or loss of relevant technology rights followed by commercial deterioration.","competitors":[],"evidenceIds":["e8","e9","e10","e11","e12"],"counterEvidenceIds":["e6","e13","e14","e15"]},{"mechanism":"cost_advantage","claim":"Repeated productivity improvements demonstrate an operating capability. Global sourcing, facility consolidation and manufacturing initiatives provide plausible cost mechanisms, but no comparative unit-cost advantage over rivals is established.","durability":"Productivity contributions recur in 2023, 2025 and first-half 2026. Competitor replicability and the remaining opportunity for restructuring savings are unknown.","risks":"Tariffs, unfavorable mix, lower volumes and recurring restructuring costs can absorb efficiency gains. Margin improvement alone does not prove a moat.","invalidation":"The cost-advantage hypothesis would be undermined by evidence of equivalent competitor costs or persistent deterioration in comparable operating costs despite completed efficiency initiatives.","competitors":[],"evidenceIds":["e10","e16","e17","e18","e19"],"counterEvidenceIds":["e15","e20"]}],"evidence":[{"id":"e1","sourceId":"filing-2","location":"Remaining performance obligations at June 27, 2026","excerpt":"Thermo Fisher Scientific Inc. Shareholders’ Equity\nThree months ended June 27, 2026\nThe aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of June 27, 2026, was $29.70 billion."},{"id":"e2","sourceId":"filing-2","location":"Remaining performance obligations; typical service agreement durations","excerpt":"Amounts expected to occur thereafter generally relate to contract manufacturing, clinical research and extended warranty service agreements, which typically have durations of three to five years."},{"id":"e3","sourceId":"filing-1","location":"Business; product standardization and supply-chain-management services","excerpt":"We also provide customers with product standardization and other supply-chain-management services to reduce procurement costs."},{"id":"e4","sourceId":"filing-1","location":"Business; integrated clinical research services","excerpt":"Our clinical research business offers comprehensive, integrated clinical development and analytical services including all phases of development (i.e., Phases I-IV), peri- and post-approval and site and patient access services."},{"id":"e5","sourceId":"filing-3","location":"Executive compensation; reported customer allegiance achievement","excerpt":"CAS improved vs 2024 further strengthening trusted partner status"},{"id":"e6","sourceId":"filing-1","location":"Business; competition","excerpt":"Competition\nThe company encounters aggressive and able competition in virtually all of the markets we serve."},{"id":"e7","sourceId":"filing-1","location":"Risk factors; pharma services complexity and delivery quality","excerpt":"Our pharma services offerings are highly complex, and if we are unable to provide quality and timely offerings to our customers, our business could suffer."},{"id":"e8","sourceId":"filing-2","location":"MD&A; second-quarter 2026 demand for high-end instruments","excerpt":"Revenues in the academic and government market grew, and growth in the industrial and applied market was strong, both driven by customer demand for our innovative high-end instruments."},{"id":"e9","sourceId":"filing-5","location":"MD&A; 2023 Analytical Instruments revenue and demand","excerpt":"Analytical Instruments\nOrganic* (non-GAAP measure)\n(Dollars in millions)\n2023\n2022\nTotal\nChange\nCurrency\nTranslation\nAcquisitions/ Divestitures\nRevenues\n$\n7,263 \n$\n6,624 \n10 \n%\n(1)\n%\n0 \n%\n10 \n%\nSegment income\n1,908 \n1,507 \n27 \n%\nSegment income margin\n26.3 \n%\n22.8 \n%\n3.5 \n pt\nThe increase in organic revenues in 2023 was due to increased demand across all the segment’s businesses, with particular strength in the electron microscopy and chromatography and mass spectrometry businesses."},{"id":"e10","sourceId":"filing-5","location":"MD&A; 2023 Analytical Instruments pricing and productivity","excerpt":"The increase in segment income margin resulted primarily from strong productivity, strong pricing realization to address higher inflation and strong volume pull-through, offset in part by the effects of currency translation and strategic growth investments."},{"id":"e11","sourceId":"filing-1","location":"Business; importance of patents","excerpt":"Patents, Licenses and Trademarks\nPatents are important in many aspects of our business."},{"id":"e12","sourceId":"filing-1","location":"Business; trade secrets and trademarks","excerpt":"We protect some of our technology as trade secrets and, where appropriate, we use trademarks or register trademarks used in connection with products."},{"id":"e13","sourceId":"filing-4","location":"Business; technological change and continuing research requirements","excerpt":"Competitive climates in many of the markets we serve are characterized by changing technology and customer demands that require continuing research and development."},{"id":"e14","sourceId":"filing-6","location":"MD&A; first-quarter 2026 Analytical Instruments demand and margin","excerpt":"Analytical Instruments\nThree months ended\nOrganic (non-GAAP measure)\n(Dollars in millions)\nMarch 28,\n2026\nMarch 29,\n2025\nTotal\nChange\nAcquisitions/ Divestitures\nCurrency\nTranslation\nRevenues\n$\n1,716 \n$\n1,718 \n0 \n%\n0 \n%\n2 \n%\n(2)\n%\nSegment income\n355 \n399 \n(11)\n%\nSegment income margin\n20.7 \n%\n23.2 \n%\n(2.5)\n pt\nThe decrease in organic revenues in the first quarter of 2026 was driven by muted demand for instruments from academic and government customers in the U.S."},{"id":"e15","sourceId":"filing-6","location":"MD&A; tariff, mix and volume effects on instrument margin","excerpt":"The decrease in segment income margin was driven by the impacts of tariffs and related foreign exchange, unfavorable business mix, and lower volume, partially offset by productivity improvements."},{"id":"e16","sourceId":"filing-1","location":"MD&A; 2025 consolidated productivity and margin","excerpt":"GAAP operating income margin and adjusted operating income margin increased in 2025 due primarily to very strong productivity improvements, partially offset by unfavorable business mix and strategic investments."},{"id":"e17","sourceId":"filing-2","location":"MD&A; first-half 2026 consolidated productivity and margin","excerpt":"GAAP operating income margin and adjusted operating income margin increased in the first six months of 2026 due primarily to very strong productivity improvements, offset in part by unfavorable business mix and strategic investments."},{"id":"e18","sourceId":"filing-2","location":"MD&A; PPI pricing and cost mechanisms","excerpt":"The benefits of PPI include optimized price realization, reduced costs resulting from implementing continuous improvement methodologies, global sourcing initiatives, a lower cost structure following restructuring actions including headcount reductions and consolidation of facilities, and low cost region manufacturing."},{"id":"e19","sourceId":"filing-2","location":"Non-GAAP reconciliations; GAAP and adjusted operating margins","excerpt":"Three months ended Six months ended June 27, June 28, June 27, June 28, (Dollars in millions except per share amounts) 2026 2025 2026 2025 Reconciliation of adjusted operating income GAAP operating income $ 2,087 $ 1,834 $ 3,950 $ 3,551 Cost of revenues adjustments (a) 28 10 42 21 Selling, general and administrative expenses adjustments (b) 36 20 79 34 Restructuring and other costs (c) 98 82 147 180 Amortization of acquisition-related intangible assets 485 429 915 859 Adjusted operating income (non-GAAP measure) $ 2,735 $ 2,375 $ 5,133 $ 4,644 Reconciliation of adjusted operating income margin GAAP operating income margin 17.4 % 16.9 % 17.2 % 16.7 % Cost of revenues adjustments (a) 0.2 % 0.1 % 0.2 % 0.1 % Selling, general and administrative expenses adjustments (b) 0.3 % 0.2 % 0.3 % 0.2 % Restructuring and other costs (c) 0.8 % 0.8 % 0.6 % 0.9 % Amortization of acquisition-related intangible assets 4.0 % 4.0 % 4.0 % 4.0 % Adjusted operating income margin (non-GAAP measure) 22.8 % 21.9 % 22.3 % 21.9 % Reconciliation of adjusted other income/(expense) GAAP other income/(expense) $ 31 $ (19) $ 22 $ (16) Adjustments (d) (31) 5 (29) 4 Adjusted other income/(expense) (non-GAAP measure) $ — $ (14) $ (7) $ (12) Reconciliation of adjusted tax rate GAAP tax rate 8.7 % 5.4 % 6.5 % 5.6 % Adjustments (e) 2.9 % 4.6 % 4.6 % 4.4 % Adjusted tax rate (non-GAAP measure) 11.6 % 10.0 % 11.1 % 10.0 % 35 THERMO FISHER SCIENTIFIC INC."},{"id":"e20","sourceId":"filing-2","location":"Supplemental income information; restructuring and impairments","excerpt":"NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Revenues by business are as follows: Three months ended Six months ended (In millions) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenues Biosciences $ 1,060 $ 1,075 $ 2,040 $ 2,068 Genetic sciences 703 679 1,358 1,356 BioProduction 941 745 1,834 1,416 Other 112 — 219 — Life Sciences Solutions 2,815 2,499 5,450 4,840 Chromatography and mass spectrometry 821 784 1,620 1,557 Chemical analysis 318 292 603 578 Electron microscopy 707 652 1,340 1,311 Analytical Instruments 1,847 1,728 3,563 3,446 Clinical diagnostics 290 276 561 539 ImmunoDiagnostics 248 234 478 451 Microbiology 166 159 326 311 Transplant diagnostics 134 124 255 237 Healthcare market channel 442 407 873 880 Elimination of intrasegment revenues (75) (65) (145) (137) Specialty Diagnostics 1,205 1,134 2,346 2,282 Laboratory products 608 601 1,176 1,183 Research and safety market channel 2,036 1,883 3,863 3,610 Pharma services 1,893 1,794 3,634 3,401 Clinical research 2,396 1,955 4,524 3,894 Elimination of intrasegment revenues and other (240) (238) (468) (453) Laboratory Products and Biopharma Services 6,693 5,995 12,729 11,635 Elimination of intersegment revenues (565) (501) (1,089) (983) Consolidated revenues $ 11,994 $ 10,855 $ 22,999 $ 21,219 Restructuring and Other Costs In the first six months of 2026, restructuring and other costs primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, impairment of long-lived assets, and, to a lesser extent, net charges for pre-acquisition litigation and other matters."},{"id":"e21","sourceId":"filing-1","location":"Revenue accounting; service scope and transaction-price modifications","excerpt":"Changes to the scope of services contracts generally also include changes in the transaction price."},{"id":"e22","sourceId":"filing-1","location":"Revenue accounting; discounts and rebates","excerpt":"Some arrangements include variable amounts of consideration that arise from discounts, rebates, and other programs and practices."},{"id":"e23","sourceId":"filing-1","location":"Risk factors; government-contract pricing terms","excerpt":"The laws governing government contracts differ from the laws governing private contracts and government contracts may contain pricing terms and conditions that are not applicable to private contracts."},{"id":"e24","sourceId":"filing-2","location":"Condensed consolidated cash flows; first-half 2026 spending and financing","excerpt":"CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 27, June 28, (In millions) 2026 2025 Operating activities Net income $ 3,397 $ 3,130 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property, plant and equipment 638 532 Amortization of acquisition-related intangible assets 915 859 Change in deferred income taxes (466) (601) Stock-based compensation 165 156 Other net non-cash expenses 205 198 Changes in assets and liabilities, excluding the effects of acquisitions (1,537) (2,151) Net cash provided by operating activities 3,317 2,122 Investing activities Purchases of property, plant and equipment (826) (656) Proceeds from sale of property, plant and equipment 13 13 Proceeds from cross-currency interest rate swap interest settlements 187 134 Acquisitions, net of cash acquired (8,872) — Purchases of investments (35) (311) Proceeds from sales and maturities of investments 253 6 Net proceeds from terminations of cross-currency interest rate swaps 481 — Other investing activities, net 1 — Net cash used in investing activities (8,797) (815) Financing activities Net proceeds from issuance of debt 5,238 2,840 Repayment of debt (1,412) (1,625) Proceeds from issuance of commercial paper 389 — Repayments of commercial paper (389) — Purchases of company common stock (4,000) (2,000) Dividends paid (337) (311) Other financing activities, net 33 3 Net cash used in financing activities (478) (1,093) Exchange rate effect on cash 176 348 Increase/(decrease) in cash, cash equivalents and restricted cash (5,782) 563 Cash, cash equivalents and restricted cash at beginning of period 9,879 4,040 Cash, cash equivalents and restricted cash at end of period $ 4,096 $ 4,603 The accompanying notes are an integral part of these condensed consolidated financial statements."},{"id":"e25","sourceId":"filing-3","location":"Appendix A; adjusted ROIC reconciliation","excerpt":"$ 6,704 Cost of revenues adjustments(a) 64 Selling, general and administrative expenses adjustments(b) 207 Restructuring and other costs(c) 362 Amortization of acquisition-related intangible assets 1,730 Other income/expense adjustments(d) (6 ) Income taxes adjustments(e) (458 ) Equity in earnings/losses of unconsolidated entities 41 Noncontrolling interests adjustments(f) (1 ) Adjusted net income (non-GAAP measure) $ 8,642 Net interest expense 426 Tax benefit on interest expense (105 ) After-tax net interest expense 321 Adjusted net income excluding net interest expense (non-GAAP measure) $ 8,963 Trailing five-quarter average invested capital (non-GAAP measure) $ 79,313 Adjusted ROIC (non-GAAP measure) 11.3 % Reconciliation of adjusted earnings per share GAAP diluted earnings per share (EPS) attributable to Thermo Fisher Scientific Inc."},{"id":"e26","sourceId":"filing-3","location":"Executive compensation; 2025 incentive goals and actual achievement","excerpt":"Table of Contents EXECUTIVE COMPENSATION Summary and discussion of 2025 AIP achievement Performance against each of the financial goals and the strategic and operational priorities was evaluated by the Committee in early 2026, with the results described below: Metric Threshold (0%) Target (100%) Maximum 200% 2025 Results Formulaic Result Metric Weight Final (Weighted) Organic revenue growth* ≤0.05% 2.80% ≥3.97% 2.3% 61.5% 35% 21.5% Adjusted net income* <$8,221M $8,743M ≥$8,891M $8,642M 60.8% 30% 18.2% Free cash flow* <$7,000M $7,000M-$7,400M ≥$7,400M $6,337M 0% 5% 0% Total Financial % 56.8% 70% 39.8% Overall goal: Deliver on our commitments to all stakeholders and advance our position as the world leader in serving science Performance Metric Key Areas of Focus Key Achievements Advancing our strategic position • Continue to focus on the safety of our colleagues • Make progress on our environmental sustainability goals • Build on momentum to support our communities through colleague involvement and STEM education • Deepen culture of involvement and inclusion • Drive personal ownership of ethics, quality, safety and regulatory compliance and cybersecurity • Engaged more than 70K colleagues in the Making Quality Personal program • Finished ahead of renewable energy targets and achieved first waste target • Delivered scaled community impact, reaching 180K+ students through STEM initiatives and contributing 100K+ colleague volunteer hours globally • Strong improvement in cybersecurity awareness and behavior and launched global digital acumen business resource group with 14 chapters across 10 countries Position Company to drive meaningful growth in revenue and adjusted operating income through the strategic plan horizon • Improve Customer Allegiance Score (“CAS”) vs."},{"id":"e27","sourceId":"filing-3","location":"Executive compensation; 2025 equity award conditions and CEO holding requirement","excerpt":"Changes for 2026 All NEOs Thermo Fisher Scientific 2026 Proxy Statement 43 Table of Contents EXECUTIVE COMPENSATION Key features of 2025 annual equity awards Performance-Based Restricted Stock Units • 100% performance-based and subject to forfeiture if actual performance results fall below a minimum performance threshold • Initial calculation of earned units based on financial performance over one year, subject to a 3-year TSR metric (where target payout requires above median performance compared to peer group) • If earned, 3-year ratable vesting (one third per annum, subject to final adjustment based on relative TSR metric) • Dividends accrue (in form of dividend equivalents) and paid only to the extent underlying awards are earned and vest • CEO awards subject to an additional 2-year holding requirement on 50% of shares delivered upon vesting • Align interests of executives with those of our shareholders by motivating and rewarding achievement of financial performance and long-term shareholder value; promote retention Stock Options • 100% performance-based, as award has no value unless stock price appreciates over time • 4-year ratable vesting (one quarter per annum) • Exercise price equal to closing price on date of grant • 10-year term promotes long-term value-creating actions and retention Time-Based Restricted Stock Units • 3.5-year vesting (15%, 25%, 30% and 30% after 6, 18, 30 and 42 months, respectively) • Dividends accrue (in form of dividend equivalents) and paid only on vested awards • Promote long-term retention, stock ownership, and alignment of interests with shareholders To promote retention, awards generally provide that any unvested awards are forfeited upon termination of service, except in limited circumstances as described in the section titled “Treatment of equity.”"},{"id":"e28","sourceId":"filing-3","location":"Executive compensation; May 2025 Board approval of CEO retention grant","excerpt":"Casper’s leadership, with the 2025 CEO retention grant intended to support his continued leadership and reinforce long-term alignment with shareholders • After working with its independent compensation consultant over several months, in May 2025 the Board approved a five-year, performance-based CEO retention grant tied to the Company’s performance relative to the S&P 500."},{"id":"e29","sourceId":"filing-3","location":"Executive compensation; deferred delivery of earned retention shares","excerpt":"Earned shares will be delivered in three equal tranches on the 8th, 9th, and 10th anniversaries of the grant date to reinforce long-term shareholder alignment • Communicated the rationale and design of the grant during shareholder engagement meetings and proxy disclosures to ensure transparency • We have included further details on the rationale and size of the CEO retention grant in this Proxy, which can be found in the “Letter from the Compensation Committee” on page 32 and “CEO retention grant for Mr."},{"id":"e30","sourceId":"filing-3","location":"Shareholder engagement; 2025 say-on-pay support","excerpt":"In 2025, the Company’s say-on-pay proposal received approximately 36% support."},{"id":"e31","sourceId":"filing-3","location":"Corporate governance; independence, shareholder rights and compensation safeguards","excerpt":"INDEPENDENT AND EFFECTIVE BOARD OVERSIGHT BOARD COMPOSITION AND REFRESHMENT • Substantial majority of independent directors • Strong independent Lead Director with robust authority and responsibility • 100% independent exchange-mandated Board committees • Skills and background align with Company strategy • Annual review of Board leadership structure and disclosure of the Board’s reasoning underlying its leadership structure • Regular executive sessions of independent directors • Annual Board and committee self-evaluations • Board-level oversight of AI, cybersecurity, strategic risk, and CSR matters • Regular Board refreshment and balanced mix of director tenure (4 new directors joined since 2020) • Corporate Governance Guidelines emphasize the importance of having a broad mix of skills and experiences • With limited exceptions, directors may not be renominated to the Board after their 72nd birthday • “Overboarding” limits for directors • Formal new director orientation, continuing director education, and in-house trainings on Company products and processes to align the board with business priorities SHAREHOLDER RIGHTS AND ACCOUNTABILITY STRONG GOVERNANCE AND RISK MANAGEMENT PRACTICES • Annual election of all directors by majority voting • Directors not receiving majority support must tender their resignation for consideration by the Board • Proxy access for shareholders • One share, one vote • Shareholder right to call a special meeting (15% ownership threshold) • Proxy access for shareholders • Majority shareholder vote to amend Certificate of Incorporation and By-laws • Proactive year-round shareholder engagement program with independent director involvement • Annual review of Corporate Governance Guidelines and committee charters to ensure alignment with best practices • Clawback policy and clawback provisions in equity award agreements • Prohibition on hedging or pledging shares of the Company’s stock by officers and directors • Strong stock ownership requirements and, for CEO, post-vest stock holding requirement 16 Thermo Fisher Scientific 2026 Proxy Statement Table of Contents CORPORATE GOVERNANCE Board composition and refreshment The Board takes a thoughtful approach to its composition and regularly reviews the skills and experiences needed to align with the Company’s strategic vision, business and operations, as further discussed below."},{"id":"e32","sourceId":"filing-3","location":"Executive compensation; implemented 2026 TSR benchmark change","excerpt":"Beginning in 2026, the Committee revised the PRSU design so that relative TSR performance will be measured against the S&P 500 index."},{"id":"e33","sourceId":"filing-7","location":"Second-quarter 2026 results; organic growth and GAAP EPS","excerpt":"Organic revenue growth was 5%.\nGAAP Earnings Results\nGAAP diluted EPS in the second quarter of 2026 was $4.68, 9% growth versus the second quarter of 2025."},{"id":"e34","sourceId":"filing-2","location":"MD&A; second-quarter 2026 Analytical Instruments organic growth","excerpt":"30 THERMO FISHER SCIENTIFIC INC. Analytical Instruments Three months ended Organic (non-GAAP measure) (Dollars in millions) June 27, 2026 June 28, 2025 Total Change Acquisitions/ Divestitures Currency Translation Revenues $ 1,847 $ 1,728 7 % 0 % 0 % 7 % Segment income 424 325 30 % Segment income margin 23.0 % 18.8 % 4.2 pt The increase in organic revenues in the second quarter of 2026 was driven by growth across all three of the segment’s businesses, led by the electron microscopy business."},{"id":"e35","sourceId":"filing-1","location":"Business; lack of dependence on a particular patent group","excerpt":"No particular patent, or related group of patents, is so important, however, that its loss would significantly affect our operations as a whole."},{"id":"e36","sourceId":"filing-1","location":"Business; limits on exclusively owned patent rights","excerpt":"Patent rights resulting from work sponsored by outside parties do not always accrue exclusively to the company and may be limited by agreements or contracts."},{"id":"e37","sourceId":"filing-3","location":"Appendix A; 2025 free-cash-flow reconciliation","excerpt":"$ 17.74 $ 4.92 Cost of revenues adjustments(a) 0.17 0.02 Selling, general and administrative expenses adjustments(b) 0.55 0.11 Restructuring and other costs(c) 0.96 0.29 Amortization of acquisition-related intangible assets 4.58 3.27 Other income/expense adjustments(d) (0.02 ) 0.05 Income taxes adjustments(e) (1.21 ) (1.28 ) Loss from discontinued operations, net of tax 0.00 0.01 Equity in earnings/losses of unconsolidated entities 0.11 (0.01 ) Noncontrolling interests adjustments(f) 0.00 0.00 Adjusted EPS (non-GAAP measure) $ 22.87 $ 7.38 Reconciliation of free cash flow GAAP net cash provided by operating activities $ 7,818 $ 2,942 Net cash used in discontinued operations — 9 Purchases of property, plant and equipment (1,525 ) (423 ) Proceeds from sale of property, plant and equipment 44 18 Free cash flow (non-GAAP measure) $ 6,337 $ 2,546 (a) Adjusted results exclude charges for the sale of inventories revalued at the date of acquisition, accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations."}],"changes":["Maintained the uncertain moat verdict: current operating strengths still do not establish durable competitive barriers.","Re-examined and retained the prior pricing and management grades using current catalog citations; moat criteria remain null.","Clarified that the CEO retention grant was Board-approved in May 2025, while delivery remains conditional and deferred; it is not treated as vested compensation."],"limitations":["All supplied sources are issuer filings or issuer earnings releases. Reported results and contractual disclosures support assessments, while claims of leadership, share gains and superiority lack comparative substantiation.","Competition passages identify generic manufacturers, distributors and service providers without naming operating competitors. Compensation peers, collaborators, acquisition counterparties and delivery providers are not established competitors; competitor arrays therefore remain empty.","No comparative switching costs, customer migration studies, renewal rates, decisive patent durations or relative unit costs are supplied.","Recent price realization is described within PPI without a quantified price/volume decomposition. Historical pricing success does not establish company-wide or continuing repricing power.","The proxy provides substantive compensation and governance disclosures, but actual management ownership levels and subsequent shareholder acceptance of compensation changes are absent.","Dates supplied for all sources retain dateKind filed. Results are assessed for their stated reporting periods; filing dates are not treated as the dates on which operating outcomes occurred.","Erosion risks are distinguished from realized outcomes. First-quarter instrument weakness and recurring restructuring are observed; hypothetical customer migration and technology displacement are falsifiable conditions, not reported events."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":null,"rationale":"Specialized technologies and multiyear customer commitments are evidenced, but the passages do not establish barriers sufficient to determine a moat. Aggressive competition alone does not establish a weak position.","evidenceIds":["e1","e2","e8","e11","e6"]},{"criterion":"durability","grade":null,"rationale":"Three-to-five-year service arrangements provide visibility, while patent breadth and continuing innovation do not establish durable exclusion of rivals. No supported moat duration can be assigned.","evidenceIds":["e2","e13","e35","e36"]},{"criterion":"customer_dependency","grade":null,"rationale":"Integrated research services, procurement standardization and improved customer allegiance suggest engagement. They do not demonstrate customer dependence or the consequences of switching.","evidenceIds":["e3","e4","e5"]},{"criterion":"erosion_resilience","grade":null,"rationale":"Repeated productivity gains and a second-quarter instrument recovery demonstrate operating resilience, but do not establish resilience of an identified structural moat against substitution or competitive replication.","evidenceIds":["e16","e17","e14","e15","e34"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":3,"rationale":"Analytical Instruments achieved strong pricing realization against inflation in 2023 alongside 10% organic revenue growth. This demonstrates historical pricing strength. Recent PPI disclosures support continued price management but do not quantify its contribution or establish uniform strength across segments.","evidenceIds":["e9","e10","e18"]},{"criterion":"retention","grade":2,"rationale":"The $29.70 billion of remaining customer obligations, typical three-to-five-year service agreements and reported improvement in customer allegiance support continuing engagement. This is indirect contractual and engagement evidence; renewal rates, same-customer purchasing and cancellation terms are absent.","evidenceIds":["e1","e2","e5"]},{"criterion":"margin_resilience","grade":3,"rationale":"Consolidated margins improved in 2025 and first-half 2026 despite unfavorable mix and investment; first-half GAAP margin rose from 16.7% to 17.2%. Productivity is the principal disclosed driver. First-quarter instrument pressure limits uniformity, and margin resilience is not attributed solely to pricing.","evidenceIds":["e16","e17","e19","e14","e15"]},{"criterion":"contractual_freedom","grade":2,"rationale":"Service-scope changes generally include transaction-price changes, demonstrating negotiated flexibility. Discounts, rebates and special government-contract terms constrain the assessment. Unilateral repricing and automatic inflation pass-through rights are not established.","evidenceIds":["e21","e22","e23"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"Reconciled 2025 free cash flow of $6.34 billion and adjusted ROIC of 11.3% support productive deployment. However, first-half 2026 acquisitions of $8.87 billion and repurchases of $4.00 billion exceeded $3.32 billion operating cash flow, accompanied by borrowing and cash depletion. Acquisition returns remain unproven, and 2025 cash flow missed its incentive threshold.","evidenceIds":["e24","e25","e26","e37"]},{"criterion":"incentive_alignment","grade":2,"rationale":"Actual 2025 equity awards carry performance and holding conditions, and the approved retention grant defers earned-share delivery to years eight through ten. The cash-flow incentive component earned zero. These safeguards coexist with only 36% say-on-pay support. Ownership levels are absent, and approved grants are not treated as vested.","evidenceIds":["e26","e27","e28","e29","e30"]},{"criterion":"execution","grade":3,"rationale":"Repeated productivity contributions, second-quarter 2026 organic growth of 5%, instrument organic growth of 7% and improved first-half operating cash flow demonstrate strong execution from operating outcomes. Missed 2025 financial incentive targets and first-quarter instrument weakness temper the assessment; favorable end markets also contributed.","evidenceIds":["e16","e17","e24","e26","e33","e34","e14"]},{"criterion":"governance","grade":2,"rationale":"Independent committees, shareholder voting rights, clawbacks and holding safeguards establish substantive governance infrastructure. The implemented TSR benchmark revision demonstrates responsiveness. 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