AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 31/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Broad instrument demand growth and explicit pricing realization support economically meaningful differentiation. Continued product introductions reinforce technical capability. However, the passages do not establish exclusivity, competitor-relative performance or barriers preventing replication. This supports a mixed structural assessment without establishing a durable moat.
durability · 2/4 · Three-to-five-year manufacturing, clinical research and warranty agreements establish a bounded duration of engagement. Instrument innovation continues, but changing technologies require ongoing investment and some patent rights are nonexclusive. Evidence supports persistence over contracted periods while leaving longer-term renewal and competitive protection unresolved.
customer dependency · 2/4 · Remaining performance obligations of $29.41 billion at March 28, 2026 and longer-term service agreements demonstrate substantial ongoing customer work. Dependency is assessed indirectly: the disclosures do not quantify replacement difficulty, customer switching costs or renewal behavior. Contract visibility supports engagement, with limited evidence of customer captivity.
erosion resilience · 2/4 · Third-quarter 2026 organic growth of 6% and improved GAAP operating margins demonstrate current operating resilience. These outcomes do not isolate competitive erosion from recovering demand, productivity or mix. Aggressive competition and technological change remain relevant risks; the evidence establishes mixed protection against erosion rather than realized structural weakness.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 3/4 · Analytical Instruments explicitly reported strong pricing realization addressing inflation in 2023, alongside 10% organic revenue growth and increased demand across its businesses. This demonstrates strong historical pricing outcomes within that segment. Productivity and volume also contributed; current companywide pricing magnitude and comparable realization across segments remain unestablished.
retention · 2/4 · Open customer contracts and typical three-to-five-year manufacturing, clinical research and warranty agreements provide indirect evidence of continuing engagement. Approximately 52% of March 28, 2026 remaining obligations were expected within twelve months. This supports mixed retention evidence without demonstrating renewals, same-customer expansion or retention after contractual completion.
margin resilience · 3/4 · GAAP operating margin improved to 17.4% from 16.9% in second-quarter 2026 and to 18.6% from 17.4% in the third quarter. First-quarter adjusted margin declined slightly. Together with disclosed productivity mechanisms, these outcomes support strong operational resilience, although pricing's separate contribution and competitor-relative cost advantage remain unproven.
contractual freedom · — · The supplied passages describe contract duration and management's ability to seek higher prices, but disclose no customer repricing rights, escalation clauses, negotiated scope-price provisions or binding price constraints. A warning that price increases may fail to offset costs does not establish contractual authority. This criterion cannot be graded.
Predictability92
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 7.06
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.14
- observedAnnualPeriods
- 5.00
Financial strength45
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 24.88
- netDebtEbitGrade
- 23.75
- interestCoverageGrade
- 40.53
- currentRatioGrade
- 91.20
- Debt / FCF (x)
- 6.26
- Net debt / operating income (x)
- 3.81
- Interest coverage (x)
- 5.46
- Current ratio (x)
- 1.89
Capital allocation85
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 9.67
- 3-year average dilution (%)
- -1.29
- 3-year average SBC / revenue (%)
- 0.68
- cashConversionGrade
- 100.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Nine-month 2026 free cash flow increased to $4.618 billion from $3.319 billion. Nevertheless, $8.877 billion of acquisitions and $4 billion of buybacks exceeded internally generated cash, alongside borrowing and cash depletion. A $244 million held-for-sale loss adds adverse evidence. Acquisition returns remain unestablished, supporting a mixed assessment.
incentive alignment · 2/4 · Disclosed ownership requirements had full NEO compliance at December 31, 2025, although unvested RSUs count. The approved CEO retention grant delays delivery until years eight through ten and caps payouts at target for negative absolute TSR. These safeguards coexist with shareholder rejection of compensation; future vesting and effectiveness remain unproven.
execution · 3/4 · Third-quarter 2026 organic growth of 6%, successive second- and third-quarter GAAP margin improvements and higher nine-month free cash flow support strong demonstrated execution. Management contribution is inferred from operating outcomes rather than isolated causally. The first-quarter adjusted-margin decline and capital-allocation losses temper the assessment.
governance · 2/4 · Independent committees, a lead director, annual elections, shareholder rights and clawback provisions establish substantive governance infrastructure. At the May 20, 2026 meeting, compensation received 99,928,178 votes for and 214,525,673 against. This adverse outcome tempers accountability evidence; subsequent corrective action is not supplied.
Evidence
Analytical Instruments
Organic* (non-GAAP measure)
(Dollars in millions)
2023
2022
Total
Change
Currency
Translation
Acquisitions/ Divestitures
Revenues
$
7,263
$
6,624
10
%
(1)
%
0
%
10
%
Segment income
1,908
1,507
27
%
Segment income margin
26.3
%
22.8
%
3.5
pt
The 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.
2023 Form 10-K, filed 2024-02-22; MD&A, Analytical Instruments, 2023 versus 2022 · Filed 22/02/2024
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.
2023 Form 10-K, filed 2024-02-22; MD&A, Analytical Instruments margin drivers · Filed 22/02/2024
At the American Society for Mass Spectrometry conference, we introduced next-generation Orbitrap platforms with AI-driven analytics.
Second-quarter 2026 earnings release, filed 2026-07-23; product introductions · Filed 23/07/2026
Highlights include the Thermo Scientific™ Orbitrap™ Tribrid™ Apex Mass Spectrometer, which enables researchers to study complex biology across multiomics, structural biology, biopharma characterization and small-molecule analysis on a single system, and the Thermo Scientific™ Orbitrap™ Excedion™ Mass Spectrometer, which enables scientists to identify hard-to-detect molecules in drug development, reducing risk and accelerating time to market.
Second-quarter 2026 earnings release, filed 2026-07-23; Orbitrap product capabilities · Filed 23/07/2026
Competitive climates in many of the markets we serve are characterized by changing technology and customer demands that require continuing research and development.
2024 Form 10-K, filed 2025-02-20; competition and technological change · Filed 20/02/2025
Competition
The company encounters aggressive and able competition in virtually all of the markets we serve.
2025 Form 10-K, filed 2026-02-26; competition · Filed 26/02/2026
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.
2025 Form 10-K, filed 2026-02-26; limitations on sponsored patent rights · Filed 26/02/2026
Remaining Performance Obligations
The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of March 28, 2026, was $29.41 billion.
First-quarter 2026 Form 10-Q, filed 2026-05-01; remaining performance obligations at March 28, 2026 · Filed 01/05/2026
The company will recognize revenues for these performance obligations as they are satisfied, approximately 52% of which is expected to occur within the next twelve months.
First-quarter 2026 Form 10-Q, filed 2026-05-01; expected recognition timing of remaining performance obligations · Filed 01/05/2026
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.
First-quarter 2026 Form 10-Q, filed 2026-05-01; scope and duration of longer-term customer agreements · Filed 01/05/2026
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.
Second-quarter 2026 Form 10-Q, filed 2026-07-31; management description of PPI benefits · Filed 31/07/2026
Organic revenue growth was 6%.
GAAP Earnings Results
GAAP diluted EPS in the third quarter of 2026 was $4.64, 9% growth versus the third quarter of 2025.
Third-quarter 2026 earnings release, filed 2026-10-21; organic revenue growth and GAAP EPS · Filed 21/10/2026
GAAP operating margin was 18.6%, compared with 17.4% in the third quarter of 2025.
Third-quarter 2026 earnings release, filed 2026-10-21; GAAP operating margin comparison · Filed 21/10/2026
GAAP operating margin was 17.4%, compared with 16.9% in the second quarter of 2025.
Second-quarter 2026 earnings release, filed 2026-07-23; GAAP operating margin comparison · Filed 23/07/2026
Adjusted operating margin was 21.8%, compared with 21.9% in the first quarter of 2025.
First-quarter 2026 earnings release, filed 2026-04-23; adjusted operating margin comparison · Filed 23/04/2026
$
13.75
$
12.53
Cost of revenues adjustments (a)
0.14
0.08
Selling, general and administrative expenses adjustments (b)
0.16
0.26
Restructuring and other costs (c)
0.93
0.83
Amortization of acquisition-related intangible assets
3.86
3.42
Other income/expense adjustments (d)
(0.04)
0.00
Income taxes adjustments (e)
(0.72)
(0.85)
Equity in earnings/losses of unconsolidated entities
0.09
0.02
Noncontrolling interests adjustments (f)
—
0.00
Adjusted EPS (non-GAAP measure)
$
18.15
$
16.30
Reconciliation of free cash flow
GAAP net cash provided by operating activities
$
5,867
$
4,361
Purchases of property, plant and equipment
(1,263)
(1,060)
Proceeds from sale of property, plant and equipment
14
17
Free cash flow (non-GAAP measure)
$
4,618
$
3,319
Business Segment Information
Nine months ended
September 26,
% of
September 27,
% of
(Dollars in millions)
2026
Revenues
2025
Revenues
Revenues
Life Sciences Solutions
$
8,170
23.3
%
$
7,428
23.0
%
Analytical Instruments
5,564
15.8
%
5,339
16.5
%
Specialty Diagnostics
3,445
9.8
%
3,456
10.7
%
Laboratory Products and Biopharma Services
19,592
55.8
%
17,605
54.4
%
Eliminations
(1,635)
-4.7
%
(1,487)
-4.6
%
Consolidated revenues
$
35,136
100.0
%
$
32,341
100.0
%
Segment income and segment income margin
Life Sciences Solutions
$
3,017
36.9
%
$
2,722
36.6
%
Analytical Instruments
1,317
23.7
%
Third-quarter 2026 earnings release, filed 2026-10-21; nine-month free-cash-flow reconciliation and segment information, dollars in millions · Filed 21/10/2026
Depreciation and amortization
2,378
2,053
Change in deferred income taxes
(676)
(728)
Other net non-cash expenses
621
540
Changes in assets and liabilities, excluding the effects of acquisitions
(1,580)
(2,255)
Net cash provided by operating activities
5,867
4,361
Investing activities
Purchases of property, plant and equipment
(1,263)
(1,060)
Proceeds from sale of property, plant and equipment
14
17
Proceeds from cross-currency interest rate swap interest settlements
284
218
Acquisitions, net of cash acquired
(8,877)
(4,037)
Purchases of investments
(668)
(351)
Proceeds from sales and maturities of investments
253
254
Proceeds from sale of business, net of cash divested
1,021
—
Net proceeds from terminations of cross-currency interest rate swaps
388
—
Other investing activities, net
(26)
20
Net cash used in investing activities
(8,874)
(4,938)
Financing activities
Net proceeds from issuance of debt
5,238
2,840
Repayment of debt
(2,519)
(1,625)
Proceeds from issuance of commercial paper
389
1,095
Repayment of commercial paper
(389)
(597)
Purchases of company common stock
(4,000)
(2,963)
Dividends paid
(511)
(474)
Other financing activities, net
251
(1)
Net cash used in financing activities
(1,541)
(1,725)
Exchange rate effect on cash
164
273
Increase/(decrease) in cash, cash equivalents and restricted cash
(4,384)
(2,029)
Cash, cash equivalents and restricted cash at beginning of period
9,879
4,040
Cash, cash equivalents and restricted cash at end of period
$
5,494
$
2,011
Free cash flow (non-GAAP measure)
$
4,618
$
3,319
Note:
For more information related to non-GAAP financial measures, refer to the section titled “Supplemental Information Regarding Non-GAAP Financial Measures” of this release.
Third-quarter 2026 earnings release, filed 2026-10-21; nine-month cash-flow statement, 2026 versus 2025, amounts in millions · Filed 21/10/2026
Adjusted results in 2026 exclude $72 of gain on the sale of a business and $244 for a held-for-sale loss.
Third-quarter 2026 earnings release, filed 2026-10-21; 2026 adjusted-results exclusions · Filed 21/10/2026
Stock ownership requirement
Compliance Period
Stock Ownership Included in Valuation
NEO Compliance
as of December 31, 2025
CEO
Other NEOs
6x
base salary
●
●
●
●
●
●
3x
base salary
●
●
●
5 years
from the date of appointment
•
stock owned by the executive outright
•
value of unvested restricted stock units
100%
Stock holding requirement for CEO
In addition to stock ownership guidelines, the CEO has additional stock holding requirements to increase the accountability of his particular role.
2026 proxy, filed 2026-04-07; executive ownership requirements and compliance at December 31, 2025 · Filed 07/04/2026
The award cliff vests on the five-year anniversary of the grant date, and to reinforce sustained value creation, any shares earned under the award will be delivered in three equal tranches on the eighth, ninth, and tenth anniversaries of the grant date.
2026 proxy, filed 2026-04-07; approved CEO retention grant vesting and deferred delivery · Filed 07/04/2026
If the Company’s absolute TSR is negative during the performance period, payouts will be capped at target regardless of relative performance.
2026 proxy, filed 2026-04-07; CEO retention grant payout cap for negative absolute TSR · Filed 07/04/2026
Following the Board’s approval of the CEO retention grant, members of this Committee engaged with several shareholders.
2026 proxy, filed 2026-04-07; confirmation of Board approval of CEO retention grant · Filed 07/04/2026
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
•
2026 proxy, filed 2026-04-07; independent oversight and shareholder rights · Filed 07/04/2026
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.
2026 proxy, filed 2026-04-07; engagement, clawbacks and hedging restrictions · Filed 07/04/2026
At the Annual Meeting held on May 20, 2026, the shareholders of the Company voted on the following proposals:
Annual-meeting Form 8-K, filed 2026-05-26; May 20, 2026 meeting date · Filed 26/05/2026
A non-binding, advisory proposal on the compensation of the Company’s named executive officers was not approved.
Annual-meeting Form 8-K, filed 2026-05-26; executive-compensation advisory proposal rejected · Filed 26/05/2026
For
Against
Abstain
99,928,178
214,525,673
1,265,524
3.
Annual-meeting Form 8-K, filed 2026-05-26; executive-compensation votes for, against and abstaining · Filed 26/05/2026
While we may seek to minimize the impact of price increases through higher prices to customers and various cost-saving measures, our earnings and cash flows could be adversely affected in the event these measures are insufficient to cover our costs.
2025 Form 10-K, filed 2026-02-26; limits to potential price and cost offsets · Filed 26/02/2026
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures such as organic revenue growth, which is reported revenue growth, excluding the impacts of acquisitions/divestitures and the effects of currency translation.
Third-quarter 2026 earnings release, filed 2026-10-21; definition of organic revenue growth · Filed 21/10/2026
